OKLAHOMA CITY, Jan 19, 2010 (BUSINESS WIRE) -- Chesapeake Energy Corporation's (NYSE:CHK) multi-counterparty secured
natural gas and oil hedging facility was named as a Deal of the Year by
Energy Risk, an Incisive Media publication. Energy Risk's annual Deals
of the Year feature highlights 10 key deals which it believes have
helped to advance and shape the energy markets.
Completed in June 2009, this unique facility enables Chesapeake to enter
into financially settled natural gas and oil hedge contracts with 13
counterparties that share the same non-cash collateral pool and trade
under similar terms. The facility provides Chesapeake more than $10
billion of mark-to-market-based hedging capacity, or approximately
400,000 contracts, representing nearly four years of the company's
anticipated production. The facility replaced Chesapeake's six previous
bilateral secured natural gas and oil hedging agreements and
approximately doubled the company's hedging capacity. Chesapeake's
contracts are secured primarily by its proved reserves while the hedging
counterparties' obligations are secured by cash or short-term Treasury
instruments.
Energy Risk stated, "The facility structure sets a new precedent for
optimizing the collateral and credit framework of commodity hedging by
allowing clients to implement hedging decisions faster while minimizing
administrative costs. Uniformity of terms makes it much easier to trade
with a larger number of counterparties, thus ensuring competitive
pricing and execution, and the flexibility to quickly allocate reserve
collateral, which reduces the waste of underused collateral."
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented,
"We are honored to be awarded Deal of the Year and appreciate the
commitments of Barclays Capital and our 12 other trading partners. The
new facility is groundbreaking and provides CHK with an exceptionally
valuable tool for mitigating price-related risk in our business and
managing counterparty credit risk. I am very proud of the innovative
facility and the hard work that Marc Rowland, our CFO, Jennifer Grigsby,
our Treasurer, and their staffs contributed to the success of the
facility. I also appreciate the participation of our 13 partners in the
facility."
Barclays Capital led the development and structuring of the facility and
Chesapeake was advised by Dean Street Capital Advisors.
Chesapeake Energy Corporation is the second-largest producer of
natural gas in the U.S.Headquartered in Oklahoma City, the
company's operations are focused on the development of onshore
unconventional and conventional natural gas in the U.S. in the Barnett
Shale, Haynesville Shale, Fayetteville Shale, Marcellus Shale, Anadarko
Basin, Arkoma Basin, Appalachian Basin, Permian Basin, Delaware Basin,
South Texas, Texas Gulf Coast and East Texas regions of the United
States.Further information is available at www.chk.com.
SOURCE: Chesapeake Energy Corporation
Chesapeake Energy Corporation
Investor Contact:
Jeffrey L. Mobley, CFA, 405-767-4763
Senior Vice President -
Investor Relations and Research
jeff.mobley@chk.com
or
Media Contact:
Jim Gipson, 405-935-1310
Director - Media Relations
jim.gipson@chk.com