SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 4, 1996
CHESAPEAKE ENERGY CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 1-13726 73-1395733
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
6100 North Western Avenue, Oklahoma City, Oklahoma 73118
(Address of principal executive offices) (Zip Code)
(405) 848-8000
(Registrant s telephone number, including area code)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. Other Events
On September 4, 1996, Chesapeake Energy Corporation ("Chesapeake") issued
a press release announcing an agreement with Mitchell Energy & Development
to construct an associated gathering system in south-central Louisiana. In a
separate action, Chesapeake and Enron Louisiana Energy Company reached an
agreement whereby Enron will expand its Eunice facility to process Chesapeake's
gas. The September 4, 1996 press release is filed herewith as Exhibit 99
and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits. The following exhibit is filed herewith:
99 Press Release issued by the Registrant on September 4, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
CHESAPEAKE ENERGY CORPORATION
MARCUS C. ROWLAND
Marcus C. Rowland,
Vice President - Chief Financial Officer
Dated: September 5, 1996
EXHIBIT INDEX
Exhibit Description Method of Filing
- ------- ----------- ----------------
99 Press Release issued by the Filed herewith
Registrant on September 5, 1996. electronically
FOR IMMEDIATE RELEASE
SEPTEMBER 4, 1996
CONTACT: MARC ROWLAND, CHIEF FINANCIAL OFFICER
(405)848-8000, EXT. 232
TOM PRICE, JR.,VICE PRESIDENT-
CORPORATE DEVELOPMENT
(405)848-8000, EXT. 257
CHESAPEAKE ENERGY CORPORATION, MITCHELL ENERGY & DEVELOPMENT,
AND ENRON CORPORATION ANNOUNCE NEW LOUISIANA GATHERING
SYSTEM AND PROCESSING AGREEMENT
OKLAHOMA CITY, OKLAHOMA, September 4, 1996 -- Chesapeake Energy
Corporation and Mitchell Energy & Development Corp. today reached agreement in
principle to construct a 40-mile, 20-inch pipeline and a 40-mile associated
gathering system in south-central Louisiana to move natural gas from
Chesapeake's wells in the Louisiana Austin Chalk Trend to Enron Louisiana
Energy Company's Eunice Plant in Acadia Parish. In a separate action,
Chesapeake and Enron have reached an agreement whereby Enron will expand
its Eunice facility to process Chesapeake's gas.
The pipeline and gathering system, capable of handling volumes of up to
250 million cubic feet of gas per day, will be constructed by a 50/50 joint
venture between Chesapeake and Mitchell, with Mitchell as operating partner.
Construction of the pipeline is expected to be completed in the spring of
1997, with the first operational section completed by the end of this
year. The completed pipeline will have sufficient capacity to move gas
from wells drilled by Chesapeake and other third-party producers in Rapides,
Allen, Evangeline, Avoyelles and St. Landry parishes to the Eunice area. The
expected cost of the first phase pipeline and gathering facilities is $25
million and has been named the Louisiana Chalk Gathering System.
Based upon our agreement with Chesapeake, we will immediately proceed
to debottleneck Enron's Eunice Gas Processing Plant and Fractionator to
accommodate the large increase in NGL volumes to be recovered from
Chesapeake s gas, said William V. Allison, president of Enron Liquid
Services Corp. "In combination with the new pipeline, Eunice is ideally
positioned to provide the highest upgrade in value for producers developing
reserves in the rapidly-expanding Louisiana Trend."
Aubrey K. McClendon, Chesapeake's CEO added, "The Louisiana Chalk
Gathering System will serve a major portion of Chesapeake s 400,000-acre
interest in the Masters Creek and St. Landry areas of the company s one
million net acres in the Louisiana Austin Chalk Trend. Chesapeake now has
six rigs active in the Louisiana Trend and we plan to significantly
increase our drilling activity later this year and in 1997. The completion
of this project will add significant downstream value to our gas production
in Louisiana and should reduce the delays we have experienced in commencing
production from new wells we drill in the area."
Last year Mitchell built, and now operates, a similar gathering and
large-diameter pipeline system in the Austin Chalk area of central Texas.
"The Chesapeake-Mitchell pipeline in south-central Louisiana will provide
the needed infrastructure to move raw natural gas produced from the Austin
Chalk and other formations to the multitude of premium natural gas and
natural gas liquids outlets in the Eunice area. Further, we will have
additional pipeline capacity to move significant volumes of gas developed by
other producers who are actively drilling in the area," said Allen Tarbutton,
president of Mitchell's Gas Services Division.
####
Chesapeake Energy Corporation is a large independent energy producer
headquartered in Oklahoma City. The company focuses on utilizing advanced
drilling and completion technologies to develop significant new oil and natural
gas discoveries in major onshore producing areas of the United States.
Chesapeake is traded on the New York Stock Exchange under the ticker symbol
CHK.
The information in this release includes certain forward-looking statements
that are based on assumptions that in the future may prove not to have been
accurate. Those statements, and Chesapeake Energy Corporation s business and
prospects, are subject to a number of risks, including production variances
from expectations, volatility of oil and gas prices, the need to develop and
replace its reserves, the substantial capital expenditures required to fund
its operations, environmental risks, drilling and operating risks, risks
related to exploration and development drilling, uncertainties about
estimates of reserves, competition, government regulation, and the ability of
the company to implement its business strategy. These and other risks are
described in the company's reports that are available from the United States
Securities and Exchange Commission.