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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 4)
Under the Securities Exchange Act of 1934
GOTHIC ENERGY CORPORATION
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(Name of Issuer)
Common Stock, par value $.01
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(Title of Class of Securities)
383482106
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(CUSIP Number)
Shannon Self, Esquire
Self, Giddens & Lees, Inc.
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, Oklahoma 73102
(405) 232-3001
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 27, 2000
---------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
NOTE: Six (6) copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 383482106
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(1) Names of Reporting Persons, S.S. or I.R.S. Chesapeake Energy
Identification Nos. of Above Persons Corporation
73-1395733
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(See Instructions) (b) [x]
(3) SEC Use Only
(4) Source of Funds (See Instructions) AF
(5) Check if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization Oklahoma
Number of Shares (7) Sole Voting Power -
Beneficially Owned (8) Shared Voting Power 4,047,486
By Each Reporting (9) Sole Disposition -
Person With: (10) Shared Dispositive Power 4,047,486
(11) Aggregate Amount Beneficially Owned by Each 4,047,486
Reporting Person
(12) Check if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares (See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 19.9%
(14) Type of Reporting Person (See Instructions) CO
</TABLE>
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CUSIP NO. 383482106
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(1) Names of Reporting Persons, S.S. or I.R.S. Chesapeake Exploration
Identification Nos. of Above Persons Limited Partnership, an
Oklahoma limited partnership,
successor by merger to
Chesapeake Mid-Continent
Corp., an Oklahoma
corporation
73-1384282
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(See Instructions) (b) [x]
(3) SEC Use Only
(4) Source of Funds (See Instructions) AF,WC
(5) Check if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization Oklahoma
Number of Shares (7) Sole Voting Power 4,047,486
Beneficially Owned (8) Shared Voting Power 4,047,486
By Each Reporting (9) Sole Disposition 4,047,486
Person With: (10) Shared Dispositive Power 4,047,486
(11) Aggregate Amount Beneficially Owned by Each 4,047,486
Reporting Person
(12) Check if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares (See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 19.9%
(14) Type of Reporting Person (See Instructions) PN
</TABLE>
Page 3 of 10 Pages
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CUSIP NO. 383482106
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(1) Names of Reporting Persons, S.S. or I.R.S. Chesapeake Energy
Identification Nos. of Above Persons Marketing, Inc.
73-1439175
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(See Instructions) (b) [x]
(3) SEC Use Only
(4) Source of Funds (See Instructions) AF
(5) Check if Disclosure of Legal Proceedings is Required [ ]
Pursuant to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization Oklahoma
Number of Shares (7) Sole Voting Power -
Beneficially Owned (8) Shared Voting Power 4,047,486
By Each Reporting (9) Sole Disposition -
Person With: (10) Shared Dispositive Power 4,047,486
(11) Aggregate Amount Beneficially Owned by Each 4,047,486
Reporting Person
(12) Check if the Aggregate Amount in Row (11) Excludes [ ]
Certain Shares (See Instructions)
(13) Percent of Class Represented by Amount in Row (11) 19.9%
(14) Type of Reporting Person (See Instructions) CO
</TABLE>
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CUSIP NO. 383482106
Preliminary Statement
This Amendment No. 4 to Schedule 13D amends and restates: (a) the Schedule 13D
dated September 15, 1999, and filed by Chesapeake Mid-Continent Corp., an
Oklahoma corporation ("Chesapeake Mid-Continent"), as successor by merger to
Chesapeake Gothic Corp., an Oklahoma Corporation ("Chesapeake Gothic"); (b)
Amendment No. 1 to Schedule 13D filed on September 23, 1999, by Chesapeake
Mid-Continent; (c) Amendment No. 2 to Schedule 13D filed on October 8, 1999 by
Chesapeake Mid-Continent; and (d) Amendment No. 3 to Schedule 13D filed on April
10, 2000, by Chesapeake Exploration Limited Partnership, an Oklahoma limited
partnership, as successor by merger to Chesapeake Mid-Continent ("CELP"). This
amendment and restatement adds Chesapeake Energy Corporation, an Oklahoma
corporation ("Chesapeake Energy"), and Chesapeake Energy Marketing, Inc., an
Oklahoma corporation ("CEMI"), as reporting persons.
Item 1. Security and Issuer.
The common stock par value $.01 per share (the "Common Stock"), of Gothic
Energy Corporation, an Oklahoma corporation ("Gothic"). Gothic's
principal executive offices are located at 5727 South Lewis Avenue, Suite
700, Tulsa, Oklahoma 74105.
Item 2. Identity and Background.
CELP's sole general partner is Chesapeake Operating, Inc., an Oklahoma
corporation ("COI"), and its sole limited partner is Chesapeake Energy.
CELP and Chesapeake Mid- Continent were merged with CELP as the surviving
entity. CELP and COI are wholly owned subsidiaries of Chesapeake Energy,
are located at 6100 North Western Avenue, Oklahoma City, Oklahoma 73118,
and are engaged in the ownership, development and operation of oil and
gas assets in North America. CEMI is a wholly owned subsidiary of
Chesapeake Energy engaged in the marketing of oil and gas production and
is located at 6100 North Western Avenue, Oklahoma City, Oklahoma 73118.
The executive officers and directors of COI, Chesapeake Energy and CEMI
are set forth below. Each individual designated by an asterisk is a
director or officer of COI, CEMI and Chesapeake Energy.
Aubrey K. McClendon *
Director and Chief Executive Officer
6100 North Western
Oklahoma City, Oklahoma 73118
Tom L. Ward *
Director and Chief Operating Officer
6200 North Western
Oklahoma City, Oklahoma 73118
Marcus C. Rowland *
Chief Financial Officer
6100 North Western
Oklahoma City, Oklahoma 73118
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CUSIP NO. 383482106
Edgar F. Heizer, Jr.
Director
261 Bluff's Edge Drive
Lake Forest, Illinois 60045
Breene M. Kerr
Director
115 Bay Street
Easton, Maryland 21601-2703
Shannon Self
Director
2725 Oklahoma Tower
210 Park Avenue
Oklahoma City, Oklahoma 73102
Frederick B. Whittemore
Director
1221 Avenue of the Americas
New York, New York 10020
CELP, COI, Chesapeake Energy, CEMI and each of the listed individuals
(collectively, the "Chesapeake Parties") have not, during the last five
years, been convicted in a criminal proceeding and have not been or
become subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such
laws. Each individual is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration
On April 27, 1998, Chesapeake Gothic and certain affiliated entities made
a strategic investment in Gothic (the "Initial Transaction"). As part of
the Initial Transaction Chesapeake Gothic and certain affiliates acquired
Gothic's Series B Senior Preferred Stock par value .05 (the "Preferred
Stock"), certain oil and gas interests, the right to participate in
certain oil and gas development activities of Gothic under that certain
Sale and Participation Agreement dated March 31, 1998 (the "Participation
Agreement"), and a warrant (the "Warrant") for 2,439,246 shares of Common
Stock at an exercise price of $.01 per share. The Preferred Stock and any
Preferred Stock received as in-kind dividends on such Preferred Stock is
convertible into Common Stock at the option of CELP on ninety (90) days
prior written notice after April 30, 2000, to the extent that the
conversion does not cause the Chesapeake Parties to own more than 19.9%
of the outstanding Common Stock . Each share of Preferred Stock is
convertible into shares of Common Stock equal to the liquidation
preference of $1.000.00 for each share of the Preferred Stock divided by
the greater of fair market value or $2.04167. The consideration for the
Initial Transaction was provided by Chesapeake Energy and its affiliated
entities from working capital and the proceeds from one or more bond
financing transactions.
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CUSIP NO. 383482106
Subsequent to the Initial Transaction, Chesapeake Gothic merged into
Chesapeake Mid- Continent with Chesapeake Mid-Continent as the surviving
entity. On August 18, 1999, Chesapeake Mid-Continent exercised the
Warrant on a net basis by surrendering 45,121 warrants and receiving
2,394,125 shares of Common Stock, which represented approximately 14.7%
of the then outstanding Common Stock. Effective December 31, 1999,
Chesapeake Mid-Continent merged into CELP, with CELP being the surviving
entity and the continuing holder of the Common Stock and the Preferred
Stock.
On September 13, 1999, Gothic announced that it was exploring
alternatives to restructure Gothic's debt and equity, including the
possible sale of assets, the issuance of new debt or the issuance of new
equity securities. In connection with a potential restructure of Gothic,
CELP and Gothic entered into an agreement (the "OP Agreement") on
February 28, 2000, pursuant to which CELP agreed to grant to Gothic an
option (the "Option") to redeem the Preferred Stock and Common Stock held
by CELP in exchange for the assignment to CELP of certain undeveloped
leasehold interests covered by the Participation Agreement. The grant of
the Option under the terms of the OP Agreement and the subsequent
exercise of the Option are subject to a number of material conditions.
The conditions under the OP Agreement were satisfied or waived by the
parties and the Option was granted by CELP to Gothic on April 4, 2000,
effective March 28, 2000. As part of the consideration to be received by
CELP for the grant of the Option under the OP Agreement: (a) the joint
venture was extended for three years to April 30, 2006; (b) CELP was
granted a right of first refusal on property dispositions by Gothic or it
affiliates; (c) COI was permitted to become operator of 28 wells operated
by Gothic; and (d) Chesapeake Energy was granted the first right to
drill, complete and operate oil and gas wells located in certain areas
covered by the Participation Agreement.
In connection with Gothic's proposed restructure, Gothic entered into an
Agreement in Respect of Restructuring Gothic Energy Corporation 14 1/8%
Series B Senior Secured Discount Notes (the "Restructure Agreement") on
or about June 5, 2000, with holders of over 90% of the Gothic Energy
Corporation 14 1/8% Series B Senior Secured Discount Notes (the "Discount
Notes"). Under the terms of the Restructure Agreement Gothic agreed to
file a prepackaged bankruptcy plan. The holders of the Discount Notes
agreed to support Gothic's prepackaged plan and as part of a confirmed
bankruptcy plan to exchange the Discount Notes for: (a) approximately 94%
of the reorganized Gothic's Common Stock and (b) the right to purchase
additional Common Stock pursuant to a rights offering by the reorganized
Gothic. On or about June 27, 2000, CEMI purchased 96% of the outstanding
Discount Notes subject to the terms of the Restructure Agreement (which
CEMI agreed to perform with respect to the Discount Notes) for a
combination of cash and Chesapeake Energy common stock equal to the
accreted value of the Discount Bonds. The cash consideration paid by CEMI
for the Discount Bonds was funded from CEMI's working capital.
Item 4. Purpose of Transaction
The Preferred Stock, the Warrant, the underlying Common Stock to be
acquired from the exercise of the Warrant or the conversion of the
Preferred Stock and the other interests described in Item 3 of this
Schedule 13D, were acquired in the Initial Transaction as
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CUSIP NO. 383482106
investments by CELP's predecessors in interest. Under the terms of the
Initial Transaction, CELP has the right to appoint one director to
Gothic's board of directors, but to date has declined to exercise that
right.
Subject to the terms of the various agreements among Gothic and the
Chesapeake Parties (including, without implied limitation, the documents
evidencing the Initial Transaction, the OP Agreement, the Option, the
Restructure Agreement and any related agreements), the Chesapeake Parties
may in the future: (i) purchase additional shares of Common Stock,
additional shares of Preferred Stock, additional Discount Notes, debt
securities or other equity securities of Gothic, (ii) sell all or part of
the Common Stock, the Preferred Stock or the Discount Notes; (iii)
communicate with management of Gothic regarding Gothic's business plans
and the evaluation of Gothic's strategic alternatives as indicated above;
or (iv) enter into additional transactions in connection with Gothic or
Gothic's assets. The Chesapeake Parties are currently evaluating the
acquisition of Gothic or all or part of Gothic's assets and as part of
that process plan to explore the possible renegotiation of all or part of
the agreements among Gothic and the Chesapeake Parties including, without
implied limitation, the documents evidencing the Initial Transaction, the
OP Agreement, the Option, the Restructure Agreement and any related
agreements. Except as set forth above, the Chesapeake Parties have no
present plans or intentions relating to the transactions described in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) CELP owns 2,394,125 shares of Common Stock resulting from the
exercise of the Warrant and 62,828 shares of Preferred Stock which,
subject to the restrictions described below, are currently convertible
into approximately 30,772,701 shares of Common Stock after 90 days
written notice. Based on the 18,685,765 shares of Common Stock reflected
as issued and outstanding in Gothic's Form 10K filed on March 30, 2000,
the 2,394,125 shares of Common Stock held by CELP represent 12.65% of the
outstanding Common Stock. If the restrictions described below were not
applicable and the Preferred Stock could be converted on the date of this
Schedule 13D, the Common Stock held by CELP immediately after the
conversion would represent 67.1% of the outstanding Common Stock after
giving effect to the issuance of the Common Stock as a result of the
conversion of the Preferred Stock. However, as indicated above, CELP can
only convert that portion of the Preferred Stock that would not cause the
Chesapeake Parties to own more than 19.9% of the outstanding Common Stock
immediately prior to such conversion and then only after 90 days notice.
Based on the Chesapeake Parties' current ownership and the number of
shares of Common Stock outstanding, CELP can only convert a maximum
number of shares of Preferred Stock equivalent to 1,653,361 shares of
Common Stock on a fully diluted basis after 90 days notice. Based on the
foregoing restrictions on conversion of the Preferred Stock and the 90
day election period, the Chesapeake Parties disclaim beneficial ownership
of the Common Stock underlying the Preferred Stock and the inclusion of
such Common Stock in this Schedule 13D shall not be construed as
admission of beneficial ownership of such Common Stock.
(b) CELP has the power to vote or dispose of the shares of Common Stock
currently owned by CELP and acquired from the exercise of the Warrant.
CELP has the power to dispose of the Preferred Stock, but will not have
the right to vote or dispose of the Common Stock to be received from the
conversion of the Preferred Stock until such Preferred Stock
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CUSIP NO. 383482106
is converted after 90 days notice. Because of the ownership of CELP and
CEMI by Chesapeake Energy, the foregoing powers may be shared with
Chesapeake Energy and CEMI.
(c) CELP has the right to receive dividends which have accrued on the
Preferred Stock, which dividends can be paid by Gothic in-kind. On or
about April 10, 2000, CELP received 1,820.22 shares of Preferred Stock
as an in-kind dividend. In addition to the foregoing, CELP and Gothic
entered into the OP Agreement on February 28, 2000, and consummated the
OP Agreement by issuing the Option effective March 28, 2000. CEMI
acquired approximately 96% of the Discount Notes in private transactions
on or about June 27, 2000, for approximately $77,509,173 payable in a
combination of cash and Chesapeake Energy common stock. The purchase
price of the Discount Notes represented 77.74474% of the face amount of
the Discount Notes and represented the accreted value based on the
original issuance price plus interest at the contract rate. The Discount
Notes were purchased by CEMI subject to the Restructure Agreement.
(d) Inapplicable.
(e) Inapplicable.
Item 6. Contracts, Agreements, Underwritings or Relationships With Respect to
Securities of the Is suer.
Under the terms of the Initial Transaction, the Preferred Stock was
convertible into Common Stock within 90 days after receipt by Gothic of
written notice of exercise delivered by CELP after April 30, 2000. The
holders of at least 50% of Common Stock underlying the Warrant, the
Preferred Stock and related shares described in the Registration Rights
Agreement can request the registration of such Common Stock under the
Securities Act at any time after September 30, 1998. On or about February
28, 2000, Gothic and CELP entered into the OP Agreement and thereafter on
April 4, 2000, the Option was issued by CELP in favor of Gothic. The
exercise of the Option by Gothic is subject to a number of conditions
which may or may not be satisfied and may be outside the control of
Gothic or the Chesapeake Parties. The Discount Bonds acquired by CEMI are
subject to the terms of the Restructure Agreement. The remaining
agreements entered into as part of or subsequent to the Transaction were
entered into and performed in the ordinary course of the oil and gas
exploration and development business.
Item 7. Materials to be filed as Exhibits.
1. The Warrant dated April 27, 1998, to purchase Common Stock of Gothic
issued to Chesapeake Gothic was attached as Exhibit 99.1 to the Schedule
13D dated September 15, 1999, filed by Chesapeake Mid-Continent.
2. The Option Purchase Agreement dated February 28, 2000, between Gothic
Energy Corporation, an Oklahoma corporation, Gothic Production Company,
an Oklahoma corporation, and Chesapeake Exploration Limited Partnership,
an Oklahoma limited
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CUSIP NO. 383482106
partnership, successor in interest by merger to Chesapeake Gothic Corp.
was attached as Exhibit 99.2 to the Schedule 13D dated April 6, 2000,
filed by CELP.
3. The Option dated March 28, 2000, between Gothic Energy Corporation, an
Oklahoma corporation, Gothic Production Company, an Oklahoma corporation,
and Chesapeake Exploration Limited Partnership, an Oklahoma limited
partnership, successor in interest by merger to Chesapeake Gothic Corp.
was attached as Exhibit 99.3 to the Schedule 13D dated April 6, 2000,
filed by CELP.
4. The Joint Filing Agreement is attached hereto as Exhibit "99.4."
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DATED: June 27, 2000
Chesapeake Energy Corporation, an Oklahoma
corporation
By /s/ Aubrey K. McClendon
---------------------------------------------
Aubrey K. McClendon, Chief Executive Officer
Chesapeake Exploration Limited Partnership, an
Oklahoma limited partnership
By Chesapeake Operating, Inc., an Oklahoma
corporation, as general partner
By /s/ Aubrey K. McClendon
------------------------------------
Aubrey K. McClendon
Chief Executive Officer
Chesapeake Energy Marketing, Inc., an Oklahoma
corporation
By /s/ Aubrey K. McClendon
---------------------------------------------
Aubrey K. McClendon, Chief Executive Officer
Page 10 of 10 Pages
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INDEX TO EXHIBITS
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EXHIBIT NO. DESCRIPTION
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99.4 Joint Filing Agreement
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