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OKLAHOMA CITY--(BUSINESS WIRE)--May 19, 2008--Chesapeake Energy
Corporation (NYSE:CHK) today announced that it is commencing a public
offering of $500 million of contingent convertible senior notes due
2038. The notes will be convertible, under certain circumstances,
using a net share settlement process, into a combination of cash and
Chesapeake common stock. In general, upon conversion of a note, the
holder of such note will receive cash equal to the principal amount of
the note and common stock for the note's conversion value in excess of
the principal amount of the note. Chesapeake intends to use the net
proceeds from the offering, together with proceeds from the concurrent
public offering of senior notes, to fund the redemption of its 7.75%
Senior Notes due 2015, to repay outstanding indebtedness under its
revolving credit facility and for general corporate purposes. The
company intends to grant the underwriters of the proposed offering an
option to purchase up to an additional $75 million aggregate principal
amount of notes to cover over-allotments.
The contingent convertible senior notes are being offered pursuant
to a registration statement filed today with the U.S. Securities and
Exchange Commission. Chesapeake intends to list the notes on the New
York Stock Exchange after issuance.
Banc of America Securities, Barclays Capital, Credit Suisse,
Goldman, Sachs & Co., and UBS Investment Bank will act as joint
book-running managers for the Senior Notes offering. Copies of the
preliminary prospectus supplement relating to the offering may be
obtained from Banc of America Securities LLC, Capital Markets
(Prospectus Fulfillment) by email at
dg.prospectus_distribution@bofasecurities.com or by mail at Banc of
America Securities LLC, Capital Markets Operations, 100 West 33rd
Street, 3rd Floor, New York, New York 10001. An electronic copy of the
preliminary prospectus supplement will be available on the website of
the Securities and Exchange Commission at www.sec.gov.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of such jurisdiction.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, including the expected
consummation of the offering described and the use of proceeds.
Forward-looking statements include estimates and give our current
expectations or forecasts of future events. Although we believe our
forward-looking statements are reasonable, they can be affected by
inaccurate assumptions or by known or unknown risks and uncertainties,
and actual results may differ from the expectations expressed.
Chesapeake Energy Corporation is the third-largest producer of
natural gas in the U.S. Headquartered in Oklahoma City, the company's
operations are focused on exploratory and developmental drilling and
corporate and property acquisitions in the Fort Worth Barnett Shale,
Fayetteville Shale, Haynesville Shale, Mid-Continent, Appalachian
Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast
and Ark-La-Tex regions of the United States.
CONTACT: Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, 405-767-4763
Senior Vice President - Investor Relations and Research
jeff.mobley@chk.com
or
Marc Rowland, 405-879-9232
Executive Vice President and Chief Financial Officer
marc.rowland@chk.com
SOURCE: Chesapeake Energy Corporation