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 3, 2003
(February 3, 2003)
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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 File No.) (IRS Employer
of incorporation) 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)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. Other Events
On February 3, 2003, Chesapeake Energy Corporation ("Chesapeake")
issued a press release announcing completion of the acquisition of $300 million
of Mid-Continent Gas Reserves from ONEOK, Inc. The following was included in the
press release:
OKLAHOMA CITY, OKLAHOMA, FEBRUARY 3, 2003 - Chesapeake Energy Corporation
(NYSE:CHK) today announced that it has completed its previously announced
acquisition of Mid-Continent gas assets from a wholly-owned subsidiary of
Tulsa-based ONEOK, Inc. (NYSE:OKE) for $300 million.
The acquisition was funded with proceeds generated from the company's successful
December 2002 offerings of 23 million common shares at $7.50 per share and $150
million of 7.75% senior notes.
This document contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Forward-looking statements include estimates and give our current
expectations or forecasts of future events. They are based on our historical
operating trends, our existing commodity hedging position and our current
estimate of proved reserves. Although we believe our forward-looking statements
are reasonable, they can be affected by inaccurate assumptions or by known or
unknown risks and uncertainties. For example, statements concerning the fair
values of derivative contracts and their estimated contribution to our future
results of operations are based upon market information as of a specific date.
These market prices are subject to significant volatility. Factors that could
cause actual operating and financial results to differ materially from expected
results include the volatility of oil and gas prices, our substantial
indebtedness, our commodity price risk management activities, the cost and
availability of drilling and production services, our ability to replace
reserves, the availability of capital, uncertainties inherent in evaluating our
own reserves and the reserves we acquire, drilling and operating risks and other
risk factors described in the company's 2001 annual report on Form 10-K and
subsequent filings with the Securities and Exchange Commission.
Chesapeake Energy Corporation is one of the 10 largest independent natural gas
producers in the U.S. Headquartered in Oklahoma City, the company's operations
are focused on 3-D seismic delineated exploratory drilling combined with
developmental drilling and producing property acquisitions in the Mid-Continent
region of the United States. The company's Internet address is
www.chkenergy.com.
ITEM 9. REGULATION FD DISCLOSURE
Chesapeake also released the following additional statements in connection
with the announcements described in Item 5:
Based on internal reservoir engineering estimates, Chesapeake believes that it
has acquired approximately 200 billion cubic feet of gas equivalent (bcfe) of
proved gas reserves and approximately 60 bcfe of probable and possible gas
reserves. The acquired properties are expected to contribute approximately
47,000 thousand cubic feet of gas equivalent (mcfe) per day to Chesapeake's
continued production growth.
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented, "We are
pleased to announce the completion of another successful acquisition of
Mid-Continent gas assets. The ONEOK acquisition fits perfectly with our existing
Mid-Continent assets and with Chesapeake's business strategy of creating value
by acquiring and developing low-cost, long-lived natural gas assets in the
Mid-Continent region of the U.S. This transaction increases our company's proved
reserves to 2.4 trillion cubic feet of gas equivalent and our current production
to over 565,000 mcfe per day. Based on the results achieved from our previous
acquisitions in the Mid-Continent, we expect to substantially increase the value
of ONEOK's reserves through additional drilling, lower administrative costs and
reduced operating costs. Today's announcement provides further evidence of our
ongoing commitment to creating industry-leading value through further
consolidation of high-quality gas assets in the Mid-Continent."
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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 3, 2003
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