Summary
Chesapeake Energy Corporation (CHK) announced the successful closing of a significant public offering of common stock and a senior notes exchange offer on January 15, 2004. The company raised approximately $298 million in net proceeds from the sale of 23 million shares of common stock at $13.51 per share. These funds are earmarked for the payment of a portion of the $510 million aggregate purchase price for three recently announced acquisitions, including the pending $420 million acquisition of Concho Resources Inc., expected to close by January 31, 2004. Concurrently, Chesapeake completed an exchange offer for its 8.125% Senior Notes due 2011. The company issued new senior notes with lower interest rates and maturities in exchange for the older notes. This move refinanced a substantial portion of its existing debt, resulting in approximately $269.7 million of the original 2011 notes remaining outstanding. Chesapeake anticipates a pre-tax charge of approximately $6.0 million related to this exchange offer in the first quarter of 2004.
Key Highlights
- 1Chesapeake Energy Corporation closed a public offering of 23 million common shares, raising approximately $298 million in net proceeds.
- 2The offering price for the common stock was $13.51 per share.
- 3Proceeds from the stock offering will be used to fund a portion of three pending acquisitions totaling $510 million.
- 4A key acquisition, Concho Resources Inc. for $420 million, is expected to close by January 31, 2004.
- 5Chesapeake completed an exchange offer for its 8.125% Senior Notes due 2011.
- 6The company issued new senior notes (7.75% due 2015 and 6.875% due 2016) in exchange for the 2011 notes, effectively refinancing debt.
- 7An estimated pre-tax charge of $6.0 million is expected in Q1 2004 due to the notes exchange.