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OKLAHOMA CITY, Sept 08, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Chesapeake Energy
Corporation (NYSE: CHK) today announced that it has priced a public offering
of $300 million of its 4.50% cumulative convertible preferred stock at its
liquidation preference of $100 per share. Chesapeake expects the issuance and
delivery of the shares to occur on September 14, 2005. Chesapeake has also
granted the underwriters a 30-day option to purchase up to $45.0 million in
additional shares of the preferred stock solely to cover over-allotments, if
any. The offering is being made under the company's existing shelf
registration statement.
The annual dividend on each share of preferred stock will be $4.50 and
will be payable quarterly in cash, common stock or a combination thereof,
when, as and if declared by the company's board of directors, on the fifteenth
day of each March, June, September and December, to holders of record as of
the first day of the payment month, commencing on December 15, 2005. The
preferred stock will not be redeemable.
Each share of preferred stock will be convertible at any time at the
option of the holder into 2.2639 shares of Chesapeake common stock, which is
based on an initial conversion price of $44.17 per common share. The
conversion price is subject to customary adjustments in certain circumstances.
The preferred shares will be subject to mandatory conversion on or after
September 15, 2010 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.
Chesapeake intends to use the net proceeds of the offering, together with
the proceeds from a concurrent offering of common stock, to repay debt under
its bank credit facility and for general corporate purposes.
Lehman Brothers, Banc of America Securities LLC, Credit Suisse First
Boston, Morgan Stanley and Wachovia Securities acted as joint book-running
managers for the offering. Copies of the prospectus supplement and
accompanying base prospectus relating to the offering may be obtained from the
offices of Lehman Brothers Inc., c/o ADP Financial Services, Integrated
Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717; Banc of
America Securities LLC, Attn: Prospectus Department, 100 West 33rd Street,
New York, NY 10001, 646-733-4166; Credit Suisse First Boston, One Madison
Avenue, Level 1B, New York, NY 10010, 212-325-2580; Morgan Stanley, Prospectus
Department, 1585 Broadway, LLB, New York, NY 10036; Wachovia Securities
Capital Markets, LLC, Equity Capital Markets, 7 St. Paul Street, 1st Floor,
Baltimore, MD 21202. An electronic copy of the prospectus supplement and
accompanying base prospectus will be available on the website of the
Securities and Exchange Commission at http://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 state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any state.
This document 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. 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.
Chesapeake Energy Corporation is the third largest independent producer of
natural gas in the U.S. Headquartered in Oklahoma City, the company's
operations are focused on exploratory and developmental drilling and producing
property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas
Gulf Coast, Barnett Shale and Ark-La-Tex regions of the United States.
SOURCE Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, Vice President - Investor Relations and Research,
+1-405-767-4763, or jmobley@chkenergy.com , or Marc Rowland, Executive Vice President
and Chief Financial Officer, +1-405-879-9232, or mrowland@chkenergy.com , both of
Chesapeake Energy Corporation