OKLAHOMA CITY--(BUSINESS WIRE)--May. 11, 2012--
Chesapeake Energy Corporation (NYSE:CHK) today announced it has entered
into a $3.0 billion unsecured loan from Goldman Sachs Bank USA and
affiliates of Jefferies Group, Inc. The net proceeds of the loan, after
payment of customary fees and original issue discount (if any), will be
utilized to repay borrowings under the company’s existing corporate
revolving credit facility.
The new facility, which ranks pari passu to Chesapeake’s outstanding
senior notes, matures on December 2, 2017 and may be repaid at any time
this year without penalty at par value and carries an initial variable
annual interest rate through December 31, 2012 of LIBOR plus 7.0%, which
is currently 8.5%, given the 1.5% LIBOR floor in the loan agreement.
During the remainder of the year, Chesapeake plans to complete asset
sales totaling $9.0-$11.5 billion and intends to use a portion of the
proceeds from these asset sales to repay the loan. Chesapeake has
received strong interest from prospective buyers of its Permian Basin
asset sales process and its Mississippi Lime joint venture process, and
the company expects to complete these two transactions in the 2012 third
Aubrey K. McClendon, Chairman and Chief Executive Officer, said, “This
short-term loan from Goldman and Jefferies provides us with significant
additional financial flexibility as we execute our asset sales during
the remainder of 2012.
As previously announced, Chesapeake’s business strategy is evolving in
2012 from the unconventional resource play identification and leasehold
capture strategy of the past seven years to a strategy now focused
exclusively on developing the 10 core plays in which we have built a #1
or #2 position and on continuing our transition from natural gas to
liquids, reducing capital expenditures and paying down long-term debt.
We believe Chesapeake has built the nation’s best collection of E&P
assets, and we are 100% committed to delivering on the very substantial
growth and value embedded in these assets for our shareholders through a
relentless focus on developing our 10 core plays.”
Conference Call Information
A conference call to discuss this release and our quarterly filing on
Form 10-Q has been scheduled for Monday, May 14, 2012 at 8:30 am EDT.
The telephone number to access the conference call is 913-312-0956
or toll-free 888-263-2744. The passcode for the call is 3455479.
We encourage those who would like to participate in the call to place
calls between 8:15 and 8:30 am EDT. For those unable to participate in
the conference call, a replay will be available for audio playback at
1:00 pm EDT on Monday, May 14, 2012 and will run through midnight
Monday, May 28, 2012. The number to access the conference call replay is 719-457-0820
or toll-free 888-203-1112. The passcode for the replay is 3455479.
The conference call will also be webcast live on Chesapeake’s website at www.chk.com
in the “Events” subsection of the “Investors” section of the website.
The webcast of the conference call will be available on Chesapeake’s
website for one year.
Chesapeake Energy Corporation (NYSE:CHK) is the second-largest
producer of natural gas, a Top 15 producer of oil and natural gas
liquids 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 Marcellus,
Haynesville, Bossier, and Barnett natural gas shale plays and in the
Eagle Ford, Utica, Mississippi Lime, Granite Wash, Cleveland, Tonkawa,
Niobrara, Bone Spring, Avalon, Wolfcamp and Wolfberry unconventional
liquids plays. The company has also vertically integrated
its operations and owns substantial marketing, midstream and oilfield
services businesses directly and indirectly through its subsidiaries
Chesapeake Energy Marketing Inc., Chesapeake Midstream Development, L.P.
and Chesapeake Oilfield Services, L.L.C. and its affiliate Chesapeake
Midstream Partners, L.P. (NYSE:CHKM). Further information
is available at www.chk.com
where Chesapeake routinely posts announcements, updates, events,
investor information, presentations and news releases.
This news release includes "forward-looking statements" that give
Chesapeake's current expectations. Although we believe the
expectations reflected in our forward-looking statements are reasonable,
we can give no assurance they will prove to have been correct. They
can be affected by inaccurate assumptions or by known or unknown risks
and uncertainties, and actual results may differ from the expectation
expressed. We may be unable to complete our planned asset
monetizations as scheduled or at all, and they may not generate the
proceeds we are anticipating. In such events, we would be
required to seek funds to repay the loan announced today from other
sources, including alternative asset monetizations. Our ability to
consummate asset monetizations is dependent upon market conditions and
other factors beyond our control. We caution you not to place
undue reliance on our forward-looking statements, which speak only as of
the date of this news release, and we undertake no obligation to update
Source: Chesapeake Energy Corporation
Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, 405-767-4763
J. Kilgallon, 405-935-4441
Michael Kehs, 405-935-2560