OKLAHOMA CITY, May 13, 2010 (BUSINESS WIRE) --Chesapeake Energy Corporation (NYSE:CHK) today announced it has
privately placed with qualified institutional buyers in North America an
additional 500,000 shares of Chesapeake 5.75% cumulative non-voting
convertible preferred stock (Series A). The preferred stock, which has a
liquidation preference of $1,000 per share, was sold for $1,005.00 per
share. The closing of the placement is scheduled for May 17, 2010 and is
subject to customary conditions. The preferred stock issued in this
private placement is the same series as the Series A preferred stock
offered in the private placement that was announced yesterday, May 12,
2010, but is not the same series as the 5.75% cumulative non-voting
convertible preferred stock that is the subject of the purchase
agreements and option to purchase with investors in Asia announced on
May 10, 2010. That option was amended to: (i) cover a total of 900,000
shares of our 5.75% cumulative non-voting convertible preferred stock
(an increase of 400,000 shares); (ii) provide for the conversion price
of the additional 400,000 shares to be determined based on prevailing
market prices at the time the option is exercised but not less than
$27.00 per share; and (iii) extend the expiration date of the option to
June 16, 2010. Chesapeake will use the net proceeds from each of 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 preferred stock 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 being sold by Chesapeake and the underlying common
stock issuable upon conversion will not be registered under the
Securities Act of 1933, as amended (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.
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 anticipated closing
and the expected use of proceeds. Forward-looking statements give our
current expectations 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 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
Investor Contacts
Jeffrey L. Mobley, CFA, 405-767-4763
jeff.mobley@chk.com
or
John J. Kilgallon, 405-935-4441
john.kilgallon@chk.com
or
Media Contact
Jim Gipson, 405-935-1310
jim.gipson@chk.com