OKLAHOMA CITY, May 18, 2010 (BUSINESS WIRE) --Chesapeake Energy Corporation (NYSE:CHK) today announced it has closed
the private issuance of $1.7 billion of convertible preferred stock. The
company sold $600 million of its 5.75% cumulative non-voting convertible
preferred stock to investors in Asia. Additionally, Chesapeake sold $1.1
billion of its 5.75% cumulative non-voting convertible preferred stock
(Series A) to investors in North America. Both series of preferred stock
have a liquidation preference of $1,000 per share. Chesapeake will use
the net proceeds from the placements to repay senior indebtedness.
The annual dividend on each share of preferred stock is $57.50 and is
payable quarterly when, as and if declared by the company, in cash, in
arrears on each February 15, May 15, August 15 and November 15,
commencing August 15, 2010. The preferred stock is not redeemable. Each
share of the 5.75% preferred stock sold to investors in Asia will be
convertible at any time at the option of the holder into approximately
37.0370 shares of Chesapeake common stock, which is based on an initial
conversion price of $27.00 per common share and each share of the 5.75%
preferred stock (Series A) sold to investors in North America will be
convertible at any time at the option of the holder into approximately
35.7961 shares of Chesapeake common stock, which is based on an initial
conversion price of $27.94 per common share. The conversion price is
subject to customary adjustments in certain circumstances. The preferred
stock will be subject to mandatory conversion on or after May 17, 2015
into Chesapeake common stock, at the option of the company, if the
closing price of Chesapeake's common stock exceeds 130% of the
conversion price for 20 trading days during any consecutive 30 trading
day period.
The preferred stock of both series was issued pursuant to an exemption
from the registration requirements of the Securities Act of 1933 (the
"Securities Act") and the preferred stock (Series A) was reoffered by an
initial purchaser pursuant to Rule 144A and Regulation S. The preferred
stock sold by Chesapeake and the underlying common stock issuable upon
conversion has not been and will not be registered under the Securities
Act or any state securities laws and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements of the Securities Act and applicable state
laws.
This press release is being issued pursuant to Rule 135c under the
Securities Act, and is neither an offer to sell nor a solicitation of an
offer to buy the preferred stock, the underlying common stock, or any
other securities and shall not constitute an offer to sell or a
solicitation of an offer to buy, or a sale of, the preferred stock, the
underlying common stock or any other securities in any jurisdiction in
which such offer, solicitation or sale is unlawful.
Chesapeake Energy Corporation is one of the largest producers of
natural gas and the most active driller of new wells in the U.S.Headquartered
in Oklahoma City, the company's operations are focused on discovering
and developing unconventional natural gas and oil fields onshore in the
U.S. Chesapeake owns leading positions in the Barnett, Fayetteville,
Haynesville, Marcellus and Bossier natural gas shale plays and in the
Eagle Ford, Granite Wash and various other unconventional oil plays. The
company has also vertically integrated its operations and owns
substantial midstream, compression, drilling and oilfield service
assets. Further information is available at www.chk.com.
SOURCE: Chesapeake Energy Corporation
Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, 405-767-4763
jeff.mobley@chk.com
or
John J. Kilgallon, 405-935-4441
john.kilgallon@chk.com
or
Jim Gipson, 405-935-1310
jim.gipson@chk.com