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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) MARCH 10, 1998
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CHESAPEAKE ENERGY CORPORATION
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(Exact name of Registrant as specified in its Charter)
OKLAHOMA 1-13726 73-1395733
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6100 NORTH WESTERN AVENUE, OKLAHOMA CITY, OKLAHOMA 73118
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(Address of principal executive offices) (Zip Code)
(405) 848-8000
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(Registrant's telephone number, including area code)
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
MERGER WITH HUGOTON ENERGY CORPORATION
On March 10, 1998 (the "Effective Time"), after obtaining the required
approval by the affirmative vote of the majority of the outstanding shares of
common stock of Hugoton Energy Corporation ("Hugoton") and Chesapeake Energy
Corporation (the "Registrant"), Chesapeake Acquisition Corp. ("Merger Sub"), a
Kansas corporation and an indirect wholly owned subsidiary of Registrant,
merged with and into Hugoton pursuant to an Agreement and Plan of Merger dated
as of November 22, 1997, as amended (the "Merger Agreement"), among the
Registrant, Merger Sub and Hugoton (the "Merger"). Pursuant to the Merger
Agreement, each share of common stock, no par value per share, of Hugoton
("Hugoton Common Stock"), was converted into the right to receive 1.3 shares of
common stock, par value $.01 per share, of the Registrant ("Common Stock") for
each share of Hugoton Common Stock outstanding at the Effective Time. Up to
27,193,664 shares of Common Stock (which amount includes shares issuable upon
the exercise of outstanding replacement options which were issued to former
Hugoton option holders pursuant to the Merger Agreement) have been reserved
for issuance to former shareholders of Hugoton.
Pursuant to the Merger Agreement, each unexpired and unexercised
outstanding option (each a "Hugoton Option") to purchase Hugoton Common Stock
became immediately vested and exercisable and was automatically converted into
an option ("Replacement Option") to purchase 1.3 shares of Common Stock at the
exercise price per share of Hugoton Common Stock effective as of the Effective
Time divided by 1.3. Each Replacement Option is otherwise subject to all of the
other terms of the Hugoton Options to which it relates.
To fund the assumption of approximately $120 million of Hugoton debt in
connection with the Merger, certain of the Registrant's wholly owned
subsidiaries, Chesapeake Acquisition Corporation and Chesapeake Mid-Continent
Corp. as borrower, and Chesapeake Merger Corp., Chesapeake Acquisition Corp.,
Chesapeake Columbia Corp., Chesapeake Mid-Continent Gas Pipeline Company and
AnSon Gas Marketing, as initial guarantors, on March 10, 1998 entered into a
credit agreement with Union Bank of California, N.A., as agent, and certain
financial institutions named therein as lenders, providing for a $500 million
facility (the "Credit Facility") with a current borrowing base of $168 million.
The Credit Facility matures on March 9, 2002. Borrowings under the Credit
Facility are secured by Chesapeake Acquisition Corporation's pledge of its
subsidiaries' capital stock and bear interest currently at a rate equal to the
Eurodollar Rate (as defined therein) plus 1.5%. Amounts currently outstanding
under the Credit Facility were incurred to fund the assumption of debt in
connection with the Merger.
Hugoton's assets include approximately 250 Bcfe of proved oil and gas
reserves located in the U.S. Mid-Continent Region, undeveloped mineral
interests, gas gathering systems, probable and possible oil and gas reserves and
other corporate assets.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
The required financial statements of Hugoton will be filed by amendment to
this report on or before May 25, 1998.
(b) Pro Forma Financial Information
The unaudited pro forma financial statements required pursuant to Article
11 of Regulation S-X will be filed by amendment to this report on or before May
25, 1998.
(c) Exhibits
The following exhibit is filed as a part of this report:
Exhibit No. Description
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2.1 Agreement and Plan of Merger dated November 12, 1997 among
Chesapeake Energy Corporation, Chesapeake Acquisition Corp.
and Hugoton Energy Corporation, as amended by Amendment No.
1 thereto dated as of February 9, 1998. Incorporated herein
by reference to Exhibits 2.1 and 2.2 to the Company's
Registration Statement on Form S-4 (No. 333-46129)
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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
BY: /S/ AUBREY K. MCCLENDON
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AUBREY K. MCCLENDON,
Chairman of the Board and
Chief Executive Officer
Dated: March 25, 1998
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