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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 16, 2000 (MARCH 15, 2000)
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CHESAPEAKE ENERGY CORPORATION
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(Exact name of Registrant as specified in its Charter)
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<S> <C> <C>
OKLAHOMA 1-13726 73-1395733
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(State or other jurisdiction (Commission File No.) (IRS Employer Identification No.)
of incorporation)
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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 March 15, 2000, Chesapeake Energy Corporation ("Chesapeake") issued
a press release announcing a restructed joint venture agreement with Gothic
Energy Corporation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits. The following exhibit is filed herewith:
99. Press Release issued by the Registrant on March 15, 2000.
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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 16, 2000
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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99 Press Release issued by the Registrant on March 15, 2000.
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CONTACT: MARC ROWLAND,
CHIEF FINANCIAL OFFICER
(405) 879-9232
FOR IMMEDIATE RELEASE TOM PRICE, JR.,VICE PRESIDENT-
MARCH 15, 2000 CORPORATE DEVELOPMENT
(405) 879-9257
CHESAPEAKE ENERGY CORPORATION ANNOUNCES
RESTRUCTURED JOINT VENTURE AGREEMENT
WITH GOTHIC ENERGY CORPORATION
OKLAHOMA CITY, OKLAHOMA, MARCH 15, 2000 - Chesapeake Energy Corporation (NYSE:
CHK) today announced that in connection with a potential restructuring of
Gothic Energy Corporation (OTC Bulletin Board: GOTH), Chesapeake and Gothic
have agreed to substantially revise the Joint Venture (JV) originally entered
into on March 31, 1998, and for Gothic to redeem the Gothic preferred and
common stock (Gothic Securities) held by Chesapeake. The exchange of the Gothic
Securities and various revisions to the JV are subject to certain material
conditions, including approval by certain of Gothic's lenders. The revised JV
agreement excludes any current or future activities of Gothic in Texas outside
of the Panhandle.
Under the revised agreement, the JV is immediately extended for three
additional years and Chesapeake is granted a right of first refusal on any
Gothic property dispositions. In addition, Chesapeake will immediately resume
operations of 28 wells which were drilled and completed by Chesapeake under the
JV, but which were operated post-completion by Gothic. In the future,
Chesapeake will have the first right to drill, complete and operate wells in
all JV areas except for Watonga-Chickasha.
Other significant terms that are subject to the aforementioned conditions
include the exchange of Chesapeake's ownership in $61 million of Gothic Series
B preferred stock and 2.4 million shares of Gothic common stock for:
o a permanent assignment to Chesapeake of the 50% undeveloped leasehold
interest originally acquired on March 31, 1998 that was subject to a
reassignment obligation by Chesapeake to Gothic;
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o a permanent assignment to Chesapeake of Gothic's remaining 50% of JV
undeveloped leasehold in 16 counties located in the Anadarko and Arkoma
basins in Oklahoma and Kansas. Gothic's remaining 50% interest in
undeveloped acreage outside the 16 county area will not be conveyed to
Chesapeake. Also not included in the conveyance to Chesapeake is Gothic's
50% of JV undeveloped acreage in the Cement Field and in the
Watonga-Chickasha Trend; and
o the right by Chesapeake to acquire all of Gothic's interest in wells in
the 16 county area that are drilled between February 1, 2000 and the
closing of the restructuring transaction. Chesapeake's cost to acquire
these wells will be the reimbursement of Gothic's unrecovered cost of
drilling, completing and operating the wells.
Chesapeake has estimated that the acreage to be conveyed by Gothic contains
approximately 15 bcfe of proved reserves and an additional 15 bcfe of probable
reserves. The investment in Gothic is currently carried on Chesapeake's books
for $10 million, which will be transferred to Chesapeake's full cost pool upon
conclusion of the transaction.
Aubrey K. McClendon, Chesapeake's Chairman and Chief Executive Officer,
commented, "We view this transaction as very positive for Chesapeake and
Gothic. The extension of the JV and the spirit of cooperation between the two
companies should enable the full potential value of these first class
Mid-Continent gas assets to be realized."
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 reserves, the substantial
capital expenditures required to fund 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 year ended
December 31, 1998 and the report filed on Form 10-Q for the quarter ended
September 30, 1999.
Chesapeake Energy Corporation is one of the 15 largest independent natural gas
producers in the U.S. Headquartered in Oklahoma City, the company's operations
are focused on developmental drilling and property acquisitions in the
Mid-Continent region of the United States. The company's Internet address is
www.chkenergy.com.
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