Management Team of Greystone Petroleum LLC Forms New Company After May 2004
Sale to Chesapeake; New Company Will Continue Focus in the Ark-La-Tex Region
OKLAHOMA CITY, Oct. 26 /PRNewswire-FirstCall/ -- Chesapeake Energy
Corporation (NYSE: CHK) announced today the signing of a three-year joint
development agreement with Greystone Oil & Gas LLP (Greystone), a privately-
held partnership of Joe M. Bridges and Michael A. Geffert, formerly the senior
executives of Greystone Petroleum LLC, a company purchased by Chesapeake in
May 2004 for $425 million.
The agreement affords Chesapeake the exclusive right to acquire a fifty
percent (50%) interest in any of Greystone's future oil and gas projects.
During the term of the agreement, Greystone's management will devote all of
its efforts to the evaluation and development of oil and gas projects in North
Louisiana, East Texas, Southern Arkansas and Mississippi (Ark-La-Tex), a
region in which Mr. Bridges and Mr. Geffert have devoted much of their
professional careers and where they have a long history of successful
development, including the Sligo Field in Bossier Parish, Louisiana, the
principal asset in Chesapeake's May 2004 acquisition. Chesapeake will provide
financial support for Greystone's project efforts and staffing needs in
exchange for the right to acquire a 50% interest in Greystone's projects.
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented, "We
are very pleased to announce this participation agreement with Greystone.
Through the course of discussing and completing the Sligo acquisition earlier
this year, we realized that Joe and Mike were highly talented oil and gas
finders in the Ark-La-Tex region, an area that Chesapeake has targeted for
further expansion. We knew that after the sale of Greystone Petroleum, Joe
and Mike would be a very attractive management team for private equity
providers to invest with for a second time. We therefore decided to pitch
them on the idea of forming a new Greystone with Chesapeake as their partner,
rather than have private equity backing again.
"We believe the deal structure is mutually beneficial -- Joe and Mike are
able to keep 100% of the equity in their company while Chesapeake obtains
ground floor 50% participation in new projects in exchange for a G&A
contribution that we consider to be reasonable. This is definitely a win-win
for both companies and we look forward to a mutually beneficial relationship
with Greystone in the years ahead."
Michael A. Geffert, one of Greystone's two managing partners, commented,
"Joe and I are quite pleased with the opportunity to find new oil and gas
reserves afforded by this joint development agreement with Chesapeake. We
admire the manner in which Chesapeake is managed and directed. Chesapeake is
a technically driven, seasoned developer of oil and gas reserves. They are
versatile in all aspects of exploration and production and should be the
perfect match for Greystone. This agreement allows us to hit the ground
running and aggressively pursue our business plan across the Ark-La-Tex
region, an area where Joe, our staff and I have explored and developed for
many years. We are quite excited about our new relationship with Chesapeake."
Joe M. Bridges, also a managing partner of Greystone, added, "Mike and I
regard this agreement with Chesapeake as an extraordinary opportunity.
Chesapeake is the country's most active driller of new wells, is one of the
industry's most active acquirers of natural gas properties and pursues a
business strategy that fits very nicely with the types of projects we like to
develop."
Chesapeake Energy Corporation is the fourth 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,
onshore Gulf Coast and Ark-La-Tex regions of the United States. The company's
Internet address is http://www.chkenergy.com .
SOURCE Chesapeake Energy Corporation
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Related links:
http://www.chkenergy.com
Company News On-Call:
http://www.prnewswire.com/comp/138877.html
CONTACT:
Marc Rowland, Executive Vice President and
Chief Financial Officer, +1-405-879-9232, or Tom Price, Jr.,
Senior Vice President, Investor Relations, +1-405-879-9257, both
of Chesapeake Energy Corporation
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