these wells do not go to zero though, and costs are going to drop a lot. I think there is a difference between business going down and complete destruction. The stock is trading like EBITDA will be $500mm a quarter.
Let's be real here. Every time this has happened in the oil industry banks do everything they can to accommodate on terms. Banks are better off trying to structure a deal than no deal. CHK clearly has enough cash flow to pay interest. Yeah the stock has tanked, but with all the hedges in place, cash flow is pretty much set for the rest of the year, and dividend payments relief helps even more.
So all the wells they drill this year will help next year as there is a baseline EUR after the initial 90 days. So go ahead keep beating it down at this price.
Also before they have to borrow they have to burn through over $2bn in cash. Shorts will see that burn is not going to happen as much as they like. EBITDA around $900mm and no dividend payments equal much slower burn going forward.