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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) FEBRUARY 11, 1998
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 5. OTHER EVENTS
On February 11, 1998, Chesapeake Energy Corporation ("Chesapeake") and
DLB Oil & Gas, Inc. ("DLB") announced the renegotiation of the terms of their
October 22, 1997 merger agreement. The February 11, 1998 press release is filed
herewith as Exhibit 99, and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit 99.1 Press Release dated February 11, 1998.
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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: February 13, 1998
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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99.1 Press Release dated February 11, 1998
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EXHIBIT 99.1
CONTACT: MARC ROWLAND, CHIEF FINANCIAL OFFICER
(405)848-8000, EXT. 232
FOR IMMEDIATE RELEASE TOM PRICE, JR.,VICE PRESIDENT-
FEBRUARY 11, 1998 CORPORATE DEVELOPMENT
(405)848-8000, EXT. 257
CHESAPEAKE AND DLB RENEGOTIATE TERMS
OF MERGER AGREEMENT
OKLAHOMA CITY, OKLAHOMA, FEBRUARY 11, 1998 -- Chesapeake Energy Corporation
(NYSE:CHK) and DLB Oil & Gas, Inc. (NASDAQ:DLBI) today announced the
renegotiation of the terms of their October 22, 1997 merger agreement. Under the
original agreement, Chesapeake agreed to acquire all of DLB's Mid-Continent oil
and gas properties (approximately 120 billion cubic feet of gas equivalent
reserves) and DLB's 27% interest in an oil concession in Barbados for $150
million. The original form of consideration was Chesapeake's assumption of DLB's
debt of $85 million and Chesapeake's issuance of $65 million in Chesapeake
common stock. The stock portion of the consideration would have amounted to
approximately 5.2 million shares using Chesapeake's stock price in early
October, 8.7 million shares using the $7.50 Chesapeake "walkaway" price included
in the original agreement, and 10.8 million shares at Chesapeake's recent stock
price of $6.00.
Under the renegotiated terms of the agreement, Chesapeake will assume DLB's debt
of $85 million, pay $17.5 million in cash, and issue 5.0 million shares of
common stock, giving the transaction an indicated value of $132.5 million at
Chesapeake's recent price of $6.00. Additionally, DLB will retain its Barbados
asset through WRT Energy Corporation and the parties eliminated the right to
terminate the agreement based upon Chesapeake's stock price.
Aubrey K. McClendon, Chesapeake's Chairman and Chief Executive Officer
commented, "We are pleased to have restructured the DLB transaction to reflect
today's lower oil and gas prices and to achieve deal certainty. With the
elimination of the $7.50 walkaway price, both DLB and Chesapeake's shareholders
can know with precision the terms of the transaction. We recently closed the
acquisitions of AnSon Production Company, the Anadarko Basin properties of
Enervest Management Company, L.C., 40% of the Helmet properties of Ranger Oil
Limited and are now moving forward to close both the DLB and Hugoton Energy
Corporation transactions in early to mid-March."
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Mike Liddell, Chief Executive Officer of DLB stated, "Our Board concluded this
merger represented the best alternative for DLB shareholders. The distribution
of WRT, Bayard and Chesapeake stock in addition to the cash component will give
the maximum flexibility and value to our shareholders."
Simultaneously with the merger of DLB's Mid-Continent assets into Chesapeake,
DLB will spin off to their shareholders 2,955,000 shares (16.25% of outstanding
shares) of Bayard Drilling Technologies, Inc. (AMEX:BDI) and a minimum of
approximately 10,354,198 shares (48% of outstanding shares) in WRT Energy
Corporation, which will now include the Barbados assets. DLB is the largest
shareholder in both WRT and Bayard Drilling Technologies, Inc., which currently
has a fleet of 58 drilling rigs. WRT is a publicly held exploration and
production company with primarily Gulf Coast assets.
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Chesapeake Energy Corporation is an independent oil and natural gas producer
headquartered in Oklahoma City. The company's operations are focused on
exploratory and developmental drilling and producing property and corporate
acquisitions in major onshore producing areas of the United States and Canada.
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, uncertainties about estimates of reserves, 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 exploratory and developmental
drilling, competition, government regulation, and the ability of the company to
implement its business strategy. These and other risks are described in the
company's documents and reports that are available from the United States
Securities and Exchange Commission, including the report filed on Form 10-K for
the fiscal year ended June 30, 1997.
