OKLAHOMA CITY, June 27 /PRNewswire-FirstCall/ -- Chesapeake Energy
Corporation (NYSE: CHK) today announced that it has priced its previously
announced public offering of $500 million of a series of 6.25% mandatory
convertible preferred stock with a liquidation preference of $250 per
share. Chesapeake has also granted the underwriters a 30-day option to
purchase a maximum of $75 million in additional shares of mandatory
convertible preferred stock. Chesapeake expects the issuance and delivery
of the shares to occur on June 30, 2006, subject to customary closing
conditions.
The annual dividend on each share of preferred stock is $15.625 and is
payable quarterly when, as and if declared by the company, in cash, common
stock or a combination thereof, in arrears to holders of record as of the
first day of the payment month, each March 15, June 15, September 15 and
December 15 commencing September 15, 2006. The preferred stock is not
redeemable.
The mandatory convertible preferred stock has a threshold appreciation
price of $34.86 which is 20% above the closing price of the common stock on
June 27, 2006. Each share will automatically convert on June 15, 2009,
subject to certain adjustments, into no fewer than 7.1715 shares of
Chesapeake's common stock and no more than 8.6059 shares of Chesapeake's
common stock, depending on the then-prevailing market price of Chesapeake's
common stock. At any time prior to June 15, 2009, the preferred stock may
be converted at the option of the holders or, under certain circumstances,
by Chesapeake.
Chesapeake intends to use the net proceeds from the offering, together
with proceeds from concurrent public offerings of senior notes and common
stock, to fund its recently announced Barnett Shale acquisitions for $932
million, to repay outstanding indebtedness under its revolving credit
facility and for general corporate purposes.
The offering is being made under a shelf registration statement that
became effective on December 8, 2005.
Goldman, Sachs & Co., Banc of America Securities LLC, Credit Suisse,
Lehman Brothers Inc. and UBS Securities LLC are acting as joint
book-running managers for the offering. The offering is being made only by
means of a prospectus and related prospectus supplement, copies of which
may be obtained from Goldman, Sachs & Co., Attn: Prospectus Dept., 85 Broad
Street, New York, NY 10004, Fax: 212-902-9316 or email at
prospectus-ny@ny.email.gs.com; Banc of America Securities LLC, Attn:
Prospectus Department, 100 West 33rd Street, New York, NY 10001,
646-733-4166; Credit Suisse, One Madison Avenue, Level 1B, New York, NY
10010, 212-325-2580; Lehman Brothers Inc., c/o ADP Financial Services,
Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY
11717; UBS Securities LLC, Prospectus Department, 299 Park Avenue, 29th
Floor, New York, NY 10171, 212-821-3000. An electronic copy of the
prospectus and prospectus supplement is available from the Securities and
Exchange Commission's website 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 second 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 corporate and property acquisitions in the Mid-Continent, Permian
Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex and
Appalachian Basin regions of the United States. The company's Internet
address is http://www.chkenergy.com.
SOURCE Chesapeake Energy Corporation
 back to top
Related links:
http://www.chkenergy.com
CONTACT:
Jeffrey L. Mobley, CFA, Senior Vice President
- Investor Relations and Research, +1-405-767-4763,
jmobley@chkenergy.com, or Marc Rowland, Executive Vice President
and Chief Financial Officer, +1-405-879-9232,
mrowland@chkenergy.com, both of Chesapeake Energy Corporation
|
