Chesapeake Energy 2015 Annual Report Download - page 28

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We have significant capital needs, and our ability to access the capital and credit markets to raise capital
on favorable terms is limited by our debt level and industry conditions.
Disruptions in the capital and credit markets, in particular with respect to companies in the energy sector, could
limit our ability to access these markets or may significantly increase our cost to borrow. Recent decreases in commodity
prices, among other factors, are causing and may continue to cause lenders to increase interest rates, enact tighter
lending standards which we may not satisfy as a result of our debt level or otherwise, refuse to refinance existing debt
around maturity on favorable terms or at all and may reduce or cease to provide funding to borrowers. In addition, the
filing of this annual report will render us unable to use our currently effective universal shelf Form S-3 registration
statement. Because we failed to pay dividends on our convertible preferred stock during the 2016 first quarter, we will
no longer meet the criteria of a "well-known seasoned issuer" on the date of filing of this report, which previously
enabled us to, among other things, file automatically effective shelf registration statements. Accordingly, even if we
were able to access the capital markets, any attempt to do so could be more expensive or subject to significant delays.
If we are unable to access the capital and credit markets on favorable terms or at all, it could materially adversely affect
our business, financial condition, results of operations, cash flows and liquidity and our ability to repay or refinance
our debt.
We may not be able to generate enough cash flow to meet our debt obligations.
We expect our earnings and cash flow to vary significantly from year to year due to the cyclical nature of our
industry. As a result, the amount of debt that we can manage in some periods may not be appropriate for us in other
periods. Additionally, our future cash flow may be insufficient to meet our debt obligations and commitments. Any cash
flow insufficiency would materially adversely impact our business, financial condition, results of operations, cash flows
and liquidity and our ability to repay or refinance our debt. A range of economic, competitive, business and industry
factors will affect our future financial performance, and, as a result, our ability to generate cash flow from operations
and service our debt. Many of these factors, such as oil and natural gas prices, economic and financial conditions in
our industry and the global economy, the impact of legislative or regulatory actions on how we conduct our business
or competitive initiatives of our competitors, are beyond our control. Factors that may cause us to generate cash flow
that is insufficient to meet our debt obligations include the events and risks related to our business, many of which are
beyond our control.
Our liquidity is dependent on many factors, including availability under our credit facility and cost and access to
capital and credit markets, which are affected by the price and performance of our equity and debt securities. If the
borrowing base under our credit facility is reduced and we are otherwise unable to maintain an adequate liquidity
position, we may not have the financial flexibility to meet our debt obligations or manage our business, including
activities that we do not currently fund with our credit facility but may in the future, such as our planned capital
expenditures.
If we are unable to generate enough cash flow from operations to service our indebtedness or are unable
to use future borrowings to refinance our indebtedness or fund other capital needs, we may have to undertake
alternative financing plans, which may have onerous terms or may be unavailable.
We cannot assure you that our business will generate sufficient cash flow from operations to service our outstanding
indebtedness, or that future borrowings will be available to us in an amount sufficient to enable us to pay or refinance
our indebtedness, manage our working capital or fund our other capital needs. We do not expect to generate sufficient
cash flow from operations to satisfy our 2017 and 2018 debt maturities. Accordingly, we are undertaking and will
continue to undertake various alternative financing plans, which may include:
• refinancing or restructuring all or a portion of our debt;
• obtaining alternative financing;
• selling assets;
• reducing or delaying capital investments;
• seeking to raise additional capital; or
• revising or delaying our strategic plans.