Chesapeake Energy Corporation
Each share of preferred stock will be subject to an annual cumulative cash dividend of $5.00 payable quarterly when, as and if declared by the company, on the 15th day of each February, May, August, and November to holders of record as of the first day of the payment month, commencing on February 15, 2004. The preferred stock will not be redeemable.
Each preferred share will be convertible at any time at the option of the holder into 6.0962 shares of Chesapeake common stock, which is based on an initial conversion price of $16.40 per common share. The conversion price is subject to customary adjustments in certain circumstances. The preferred shares will be subject to mandatory conversion after November 18, 2006 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.
Closing of the preferred stock offering is expected to occur on November 18, 2003, and is subject to satisfaction of customary closing conditions. Chesapeake intends to use the net proceeds of the offering to repay debt under its bank credit facility incurred primarily to finance its recent acquisition of south Texas natural gas properties from Laredo Energy, L.P. and its partners.
Copies of the prospectus relating to the offering may be obtained from the company at 6100 North Western, Oklahoma City, Oklahoma 73118, attention Martha A. Burger.
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 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 region of the United States.
SOURCE: Chesapeake Energy Corporation
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
Web site: http://www.chkenergy.com/
Company News On-Call: http://www.prnewswire.com/comp/138877.html