XML 54 R34.htm IDEA: XBRL DOCUMENT
v3.22.4

Fresh Start Accounting (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2022
Reorganizations [Abstract] |
Schedule of Fresh Start Accounting Adjustments | The following table reconciles the enterprise value to the implied fair value of the Successor’s equity as of the Effective Date:
|  | February 9, 2021
Enterprise Value |  | $ | 4,851 |
Plus: Cash and cash equivalents(a) |  | 48 |
Less: Fair value of debt |  | (1,313) |
Successor equity value |  | $ | 3,586 |
____________________________________________ (a)Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. The following table reconciles the enterprise value to the reorganization value as of the Effective Date:
|  | February 9, 2021
Enterprise value |  | $ | 4,851 |
Plus: Cash and cash equivalents(a) |  | 48 |
Plus: Current liabilities |  | 1,582 |
Plus: Asset retirement obligations (non-current portion) |  | 236 |
Plus: Other non-current liabilities |  | 97 |
Reorganization value of Successor assets |  | $ | 6,814 |
____________________________________________ (a)Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. The following consolidated balance sheet is as of February 9, 2021. This consolidated balance sheet includes adjustments that reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”) as of the Effective Date. The explanatory notes following the table below provide further details on the adjustments, including the assumptions and methods used to determine fair value for its assets, liabilities and warrants.
| Predecessor |  | Reorganization Adjustments |  | Fresh Start Adjustments |  | Successor
Assets |
Current assets: |  |  |  |  |  |  |
Cash and cash equivalents | $ | 243 |  |  | $ | (203) |  | (a) | $ | — |  |  | $ | 40 |
Restricted cash | — |  |  | 86 |  | (b) | — |  |  | 86 |
Accounts receivable, net | 861 |  |  | (18) |  | (c) | — |  |  | 843 |
Short-term derivative assets | — |  |  | — |  |  | — |  |  | — |
Other current assets | 66 |  |  | (5) |  | (d) | — |  |  | 61 |
Total current assets | 1,170 |  |  | (140) |  |  | — |  |  | 1,030 |
Property and equipment: |  |  |  |  |  |  |
Natural gas and oil properties, successful efforts method |  |  |  |  |  |  |
Proved natural gas and oil properties | 25,794 |  |  | — |  |  | (21,108) |  | (o) | 4,686 |
Unproved properties | 1,546 |  |  | — |  |  | (1,063) |  | (o) | 483 |
Other property and equipment | 1,755 |  |  | — |  |  | (1,256) |  | (o) | 499 |
Total property and equipment | 29,095 |  |  | — |  |  | (23,427) |  | (o) | 5,668 |
Less: accumulated depreciation, depletion and amortization | (23,877) |  |  | — |  |  | 23,877 |  | (o) | — |
Property and equipment held for sale, net | 9 |  |  | — |  |  | (7) |  | (o) | 2 |
Total property and equipment, net | 5,227 |  |  | — |  |  | 443 |  | (o) | 5,670 |
Other long-term assets | 198 |  |  | — |  |  | (84) |  | (p) | 114 |
Total assets | $ | 6,595 |  |  | $ | (140) |  |  | $ | 359 |  |  | $ | 6,814 |
| Predecessor |  | Reorganization Adjustments |  | Fresh Start Adjustments |  | Successor
Liabilities and stockholders’ equity (deficit) |
Current liabilities: |  |  |  |  |  |  |
Accounts payable | $ | 391 |  |  | $ | 24 |  | (e) | $ | — |  |  | $ | 415 |
Current maturities of long-term debt, net | 1,929 |  |  | (1,929) |  | (f) | — |  |  | — |
Accrued interest | 4 |  |  | (4) |  | (g) | — |  |  | — |
Short-term derivative liabilities | 398 |  |  | — |  |  | — |  |  | 398 |
Other current liabilities | 645 |  |  | 124 |  | (h) | — |  |  | 769 |
Total current liabilities | 3,367 |  |  | (1,785) |  |  | — |  |  | 1,582 |
Long-term debt, net | — |  |  | 1,261 |  | (i) | 52 |  | (q) | 1,313 |
Long-term derivative liabilities | 90 |  |  | — |  |  | — |  |  | 90 |
Asset retirement obligations, net of current portion | 139 |  |  | — |  |  | 97 |  | (r) | 236 |
Other long-term liabilities | 5 |  |  | 2 |  | (j) | — |  |  | 7 |
Liabilities subject to compromise | 9,574 |  |  | (9,574) |  | (k) | — |  |  | — |
Total liabilities | 13,175 |  |  | (10,096) |  |  | 149 |  |  | 3,228 |
Contingencies and commitments (Note 7) |  |  |  |  |  |  |
Stockholders’ equity (deficit): |  |  |  |  |  |  |
Predecessor preferred stock | 1,631 |  |  | (1,631) |  | (l) | — |  |  | — |
Predecessor common stock | — |  |  | — |  |  | — |  |  | — |
Predecessor additional paid-in capital | 16,940 |  |  | (16,940) |  | (l) | — |  |  | — |
Successor common stock | — |  |  | 1 |  | (m) | — |  |  | 1 |
Successor additional paid-in-capital | — |  |  | 3,585 |  | (m) | — |  |  | 3,585 |
Accumulated other comprehensive income | 48 |  |  | — |  |  | (48) |  | (s) | — |
Accumulated deficit | (25,199) |  |  | 24,941 |  | (n) | 258 |  | (t) | — |
Total stockholders’ equity (deficit) | (6,580) |  |  | 9,956 |  |  | 210 |  |  | 3,586 |
Total liabilities and stockholders’ equity (deficit) | $ | 6,595 |  |  | $ | (140) |  |  | $ | 359 |  |  | $ | 6,814 |
Reorganization Adjustments (a)The table below reflects the sources and uses of cash on the Effective Date from implementation of the Plan:
Sources: |
Proceeds from issuance of the Notes | $ | 1,000 |
Proceeds from Rights Offering | 600 |
Proceeds from refunds of interest deposit for the Notes | 5 |
Total sources of cash | $ | 1,605 |
Uses: |
Payment of roll-up of DIP Facility balance | $ | (1,179) |
Payment of Exit Credit Facility - Tranche A Loan | (479) |
Transfers to restricted cash for professional fee reserve | (76) |
Transfers to restricted cash for convenience claim distribution reserve | (10) |
Payment of professional fees | (31) |
Payment of DIP Facility interest and fees | (12) |
Payment of FLLO alternative transaction fee | (12) |
Payment of the Notes fees funded out of escrow | (8) |
Payment of RBL interest and fees | (1) |
Total uses of cash | $ | (1,808) |
Net cash used | $ | (203) |
(b)Represents the transfer of funds to a restricted cash account for purposes of funding the professional fee reserve and the convenience claim distribution reserve. (c)Reflects the removal of an insurance receivable associated with a discharged legal liability. (d)Reflects the collection of an interest deposit for the senior unsecured notes. (e)Changes in accounts payable include the following:
Accrual of professional service provider success fees | $ | 38 |
Accrual of convenience claim distribution reserve | 10 |
Accrual of professional service provider fees | 5 |
Reinstatement of accounts payable from liabilities subject to compromise | 2 |
Payment of professional fees | (31) |
Net impact to accounts payable | $ | 24 |
(f)Reflects payment of the pre-petition credit facility for $1.179 billion and transfer of the Tranche A and Tranche B Loans to long-term debt for $750 million. (g)Reflects payments of accrued interest and fees on the DIP Facility. (h)Changes in other current liabilities include the following:
Reinstatement of other current liabilities from liabilities subject to compromise | $ | 191 |
Accrual of the Notes fees | 2 |
Settlement of Put Option Premium through issuance of Successor Common Stock | (60) |
Payment of DIP Facility fees | (9) |
Net impact to other current liabilities | $ | 124 |
(i)Changes in long-term debt include the following:
Issuance of the Notes | $ | 1,000 |
Issuance of Tranche A and Tranche B Loans | 750 |
Payments on Tranche A Loans | (479) |
Debt issuance costs for the Notes | (10) |
Net impact to long-term debt, net | $ | 1,261 |
(j) Reflects reinstatement of a long-term lease liability. (k) On the Effective Date, liabilities subject to compromise were settled in accordance with the Plan as follows:
Liabilities subject to compromise pre-emergence | $ | 9,574 |
To be reinstated on the Effective Date: |
Accounts payable | $ | (2) |
Other current liabilities | (191) |
Other long-term liabilities | (2) |
Total liabilities reinstated | $ | (195) |
Consideration provided to settle amounts per the Plan or Reorganization: |
Issuance of Successor common stock associated with the Rights Offering and Backstop Commitment and settlement of the Put Option Premium | $ | (2,311) |
Proceeds from issuance of Successor common stock associated with the Rights Offering and Backstop Commitment | 600 |
Issuance of Successor common stock to FLLO Term Loan holders, incremental to the Rights Offering and Backstop Commitment | (783) |
Issuance of Successor common stock to Second Lien Note holders, incremental to the Rights Offering and Backstop Commitment | (124) |
Issuance of Successor common stock to unsecured note holders | (45) |
Issuance of Successor common stock to General Unsecured Claims | (8) |
Fair value of Class A Warrants | (93) |
Fair value of Class B Warrants | (94) |
Fair value of Class C Warrants | (68) |
Proceeds to holders of general unsecured claims | (10) |
Total consideration provided to settle amounts per the Plan | $ | (2,936) |
Gain on settlement of liabilities subject to compromise | $ | 6,443 |
(l)Pursuant to the Plan, as of the Effective Date, all equity interests in Predecessor, including Predecessor’s common and preferred stock, were canceled without any distribution. (m)Reflects the Successor equity including the issuance of 97,907,081 shares of New Common Stock, 11,111,111 shares of Class A Warrants, 12,345,679 shares of Class B Warrants and 9,768,527 shares of Class C Warrants pursuant to the Plan.
Issuance of Successor equity associated with the Rights Offering and Backstop Commitment | $ | 2,371 |
Issuance of Successor equity to holders of the FLLO Term Loan, incremental to the Rights Offering and Backstop Commitment | 783 |
Issuance of Successor equity to holders of the Second Lien Notes, incremental to the Rights Offering and Backstop Commitment | 124 |
Issuance of Successor equity to holders of the unsecured senior notes | 45 |
Issuance of Successor equity to holders of allowed general unsecured claims | 8 |
Fair value of Class A warrants | 93 |
Fair value of Class B warrants | 94 |
Fair value of Class C warrants | 68 |
Total change in Successor common stock and additional paid-in capital | 3,586 |
Less: par value of Successor common stock | (1) |
Change in Successor additional paid-in capital | $ | 3,585 |
(n)Reflects the cumulative net impact of the effects on accumulated deficit as follows:
Gain on settlement of liabilities subject to compromise | $ | 6,443 |
Accrual of professional service provider success fees | (38) |
Accrual of professional service provider fees | (5) |
Surrender of other receivable | (18) |
Payment of FLLO alternative transaction fee | (12) |
Total reorganization items, net | 6,370 |
Cancellation of predecessor equity | 18,571 |
Net impact on accumulated deficit | $ | 24,941 |
Fresh Start Adjustments (o)Reflects fair value adjustments to our (i) proved natural gas and oil properties, (ii) unproved properties, (iii) other property and equipment and, (iv) property and equipment held for sale, and the elimination of accumulated depletion, depreciation and amortization. (p)Reflects the fair value adjustment to record historical contracts at their fair values. (q)Reflects the fair value adjustments to the 2026 Notes and 2029 Notes for $22 million and $30 million, respectively. (r)Reflects the adjustment to our asset retirement obligations using assumptions as of the Effective Date, including an inflation factor of 2% and an average credit-adjusted risk-free rate of 5.18%. (s)Reflects the fair value adjustment to eliminate the accumulated other comprehensive income of $9 million related to hedging settlements offset by the elimination of $57 million of income tax effects which has resulted in the recording of an income tax benefit of $57 million. See Note 11 for a discussion of income taxes. (t)Reflects the net cumulative impact of the fresh start adjustments on accumulated deficit as follows:
Fresh start adjustments to property and equipment | $ | 443 |
Fresh start adjustments to other long-term assets | (84) |
Fresh start adjustments to long-term debt | (52) |
Fresh start adjustments to long-term asset retirement obligations | (97) |
Fresh start adjustments to accumulated other comprehensive income | (9) |
Total fresh start adjustments impacting reorganizations items, net | 201 |
Income tax effects on accumulated other comprehensive income | 57 |
Net impact to accumulated deficit | $ | 258 |
Schedule of Reorganization Items | The following table summarizes the components in reorganization items, net included in our consolidated statements of operations:
|  | Predecessor
|  | Period from January 1, 2021 through February 9, 2021 |  | Year Ended December 31, 2020
Gains on the settlement of liabilities subject to compromise |  | $ | 6,443 |  |  | $ | 12 |
Accrual for allowed claims |  | (1,002) |  |  | (879) |
Write off of unamortized debt premiums (discounts) on Predecessor debt |  | — |  |  | 518 |
Write off of unamortized debt issuance costs on Predecessor debt |  | — |  |  | (61) |
Gain on fresh start adjustments |  | 201 |  |  | — |
Gain from release of commitment liabilities |  | 55 |  |  | — |
Debt and equity financing fees |  | — |  |  | (145) |
Loss on divested assets |  | — |  |  | (128) |
Professional service provider fees and other |  | (60) |  |  | (113) |
Success fees for professional service providers |  | (38) |  |  | — |
Surrender of other receivable |  | (18) |  |  | — |
FLLO alternative transaction fee |  | (12) |  |  | — |
Total reorganization items, net |  | $ | 5,569 |  |  | $ | (796) |

X
- Definition Schedule of Reorganization Items + References No definition available. + Details
Name: | chk_ScheduleOfReorganizationItemsTableTextBlock
Namespace Prefix: | chk_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_ReorganizationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of reorganization under Chapter 11 of Bankruptcy Code. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -Section 55 -Paragraph 10 -URI https://asc.fasb.org/extlink&oid=84165509&loc=d3e56426-112766 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -Section 50 -Paragraph 7 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=124433192&loc=SL2890621-112765 Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 852 -SubTopic 10 -Section 50 -Paragraph 7 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=124433192&loc=SL2890621-112765 + Details
Name: | us-gaap_ScheduleOfFreshStartAdjustmentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration