UNITED STATES
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): January 7, 2004
CHESAPEAKE ENERGY CORPORATION
(Exact name of registrants as specified in its charter)
| Oklahoma | 1-13726 | 73-1395733 | ||
| (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer Identification | ||
| incorporation or organization) | Number) |
| 6100 North Western Avenue | ||
| Oklahoma City, Oklahoma | 73118 | |
| (Address of principal executive offices) | (Zip Code) |
(405) 848-8000
(Registrants’ telephone number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
| 99.1 |
Press Release dated January 7, 2004 (Furnished solely for purposes of Item 9 of this report.) | |
| 99.2 |
Preliminary prospectus supplement dated January 7, 2004 and related prospectus dated October 23, 2003 (Furnished solely for purposes of Item 9 and Item 12 of this report.) Incorporated herein by reference to the preliminary prospectus supplement filed January 7, 2004 pursuant to Rule 424(b)(2). | |
ITEM 9 AND ITEM 12. REGULATION FD DISCLOSURE AND DISCLOSURE OF RESULTS OF OPERATION AND FINANCIAL CONDITION.
We issued a press release dated January 7, 2004 announcing a public offering of 20,000,000 shares of our common stock. The press release is attached to this report as exhibit 99.1 and is incorporated by reference herein
In connection with the proposed public offering, we issued a preliminary prospectus supplement dated January 7, 2004 and related prospectus dated October 23, 2003, which includes information regarding our consolidated results of operations and financial condition as of and for the quarterly period ended December 31, 2003. The preliminary prospectus supplement and related prospectus are attached to this report as exhibit 99.2 and are incorporated by reference herein. Specifically, the preliminary prospectus supplement contains information on page S-5 concerning pre-tax and after-tax charges the company expects to take in the fourth quarter of 2003. These include the following financial items that will be recorded in the fourth quarter of 2004:
| • | Charge Related to Repurchase of Senior Notes. On December 11, 2003, we completed a cash tender offer for approximately $106 million principal amount of the approximately $111 million outstanding principal amount of our 8.5% Senior Notes due 2012 for total consideration of approximately $113 million. The tender offer will result in a pre-tax charge in the fourth quarter of 2003 of approximately $20 million ($13 million net of income taxes), including a pre-tax non-cash charge of $12 million ($7 million net of income taxes) to write off the value of the call option on our 8.5% Senior Notes due 2012 reflected as a senior notes discount. |
| • | Litigation Charge related to Pending Settlement. We have reached an agreement in principle to settle a class action lawsuit filed on behalf of Oklahoma royalty owners against us and one of our subsidiaries relating to post-production deductions from royalties. The settlement will be subject to finalization of a settlement agreement and court approval, which is expected to be obtained in the first quarter of 2004. In contemplation of this settlement, we expect to incur a pre-tax charge of $5.5 million ($3.4 million net of income taxes) in the fourth quarter of 2003 for litigation and settlement costs in excess of our reserves. |
This information, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
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SIGNATURES
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 hereunto duly authorized.
| CHESAPEAKE ENERGY CORPORATION | ||||
| Date: January 7, 2004 |
By: | /s/ Marcus C. Rowland | ||
| Name: | Marcus C. Rowland | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
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EXHIBIT INDEX
| Exhibit Number |
Exhibit Description | |
| 99.1 |
Press Release dated January 7, 2004 (Furnished solely for purposes of Item 9 of this Report.) | |
| 99.2 |
Preliminary prospectus supplement dated January 7, 2004 and related prospectus dated October 23, 2003 (Furnished solely for purposes of Item 9 and Item 12 of this Report.) Incorporated herein by reference to the preliminary prospectus supplement filed January 7, 2004 pursuant to Rule 424(b)(2). | |
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EXHIBIT 99.1
News Release
| [CHESAPEAKE LOGO] | Chesapeake Energy Corporation | |
| P. O. Box 18496 Oklahoma City, OK 73154 |
FOR IMMEDIATE RELEASE
JANUARY 7, 2004
CONTACTS:
| MARC ROWLAND EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (405) 879-9232 |
TOM PRICE, JR. SENIOR VICE PRESIDENT INVESTOR RELATIONS (405) 879-9257 |
CHESAPEAKE ENERGY CORPORATION ANNOUNCES
COMMON STOCK OFFERING
OKLAHOMA CITY, JANUARY 7, 2004—Chesapeake Energy Corporation (NYSE:CHK) announced today that it intends to commence a public offering of 20.0 million shares of its common stock. Chesapeake intends to use the net proceeds of the offering to pay a portion of the aggregate $510 million purchase price of three recently announced acquisitions. The largest of these, a pending acquisition for $420 million of Concho Resources Inc., is expected to close by January 31, 2004, subject to satisfaction of customary closing conditions. If this acquisition does not close, excess net proceeds of the offering will be used for general corporate purposes, including repayment of debt or possible future acquisitions.
The offering will be made under the company’s existing shelf registration statement. The company has also granted the underwriters an option to purchase a maximum of 3.0 million additional shares of its common stock to cover over-allotments.
Lehman Brothers, Banc of America Securities LLC, Citigroup and Morgan Stanley will be joint book-running managers for the offering. Copies of the preliminary prospectus relating to the offering may be obtained from the offices of Lehman Brothers Inc., c/o ADP Financial Services, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY 11717, 631-254-7106; Banc of America Securities LLC, 100 West 33rd Street, New York, NY 10001, 646-733-4166; Citigroup Global Markets Inc., Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220, Attn: Prospectus Department, 718-765-6732;or Morgan Stanley, Prospectus Department, 1585 Broadway, New York, NY 10036, 212-761-4000.
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 one of the six largest independent natural gas producers in the United States. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent, South Texas, Gulf Coast, and Permian Basin regions onshore in the United States.