Washington, D.C. 20549
SECURITIES ACT OF 1933
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)its charter)
Oklahoma | ||
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6100 North Western Avenue
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| | | (Address, including zip code, and
principal executive offices) | |
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Copy to:
VinsonExecutive Vice President — General Counsel
and Corporate Secretary
6100 North Western Avenue
Oklahoma City, Oklahoma 73118
(405) 848-8000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
2300 First City Tower609 Main Street, Suite 4700
1001 Fannin Street
Houston, Texas 77002-676077002
713-758-3710(713) 836-3600
Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statementregistration statement becomes effective.
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| Large accelerated filer ☐ | | | Accelerated filer ☐ | |
| Non-accelerated filer ☒ | | | Smaller reporting company ☒ | |
| | | | Emerging growth company ☐ | |
Title of Each Class of Securities to be Registered | Proposed Maximum Aggregate Offering Price (1) (2) | Amount of Registration Fee | |||||
Debt Securities (3) (4) | |||||||
Guarantees of Debt Securities (3) (5) | |||||||
Preferred Stock (3) | |||||||
Depositary Shares (6) | |||||||
Common Stock (including attached preferred share purchase rights) (3) | |||||||
Total | $ | 500,000,000 | $ | 29,027 | (7) | ||
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Title of each Class of Securities to be Registered | | | | Amount to be Registered | | | | Proposed Maximum Offering Price per Share(6) | | | | Proposed Maximum Aggregate Offering Price(1)(6) | | | | Amount of Registration Fee | | ||||||||||||
Primary Offering: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Debt Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Guarantees of Debt Securities(2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common Stock, par value $0.01 per share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Preferred Stock | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
New Warrants(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Depositary Shares(4) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Share Purchase Contracts | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Units | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Primary Offering | | | | | | (5) | | | | | | | (5) | | | | | | $ | 1,500,000,000(5)(7) | | | | | | $ | 163,650.00 | | |
Secondary Offering: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common Stock, par value $0.01 per share | | | | | | 36,809,310(8) | | | | | | | (9) | | | | | | $ | 1,829,422,707.00(10) | | | | | | $ | 199,590.02(11) | | |
Class A Warrants | | | | | | 1,188,341 | | | | | | | | | | | | | $ | 31,193,951.25 (10) | | | | | | $ | 3,403.26 (11) | | |
Class B Warrants | | | | | | 1,236,148 | | | | | | | | | | | | | $ | 27,566,100.40 (10) | | | | | | $ | 3,007.46 (11) | | |
Class C Warrants | | | | | | 1,485,091 | | | | | | | | | | | | | $ | 28,231,579.91(10) | | | | | | $ | 3,080.07 (11) | | |
Common Stock underlying Class A Warrants | | | | | | 372,820 | | | | | | | | | | | | | $ | 18,529,154.00(10) | | | | | | $ | 2,021.53 (11) | | |
Common Stock underlying Class B Warrants | | | | | | 414,245 | | | | | | | | | | | | | $ | 20,587,976.50(10) | | | | | | $ | 2,246.15 (11) | | |
Common Stock underlying Class C Warrants | | | | | | 230,136 | | | | | | | | | | | | | $ | 11,437,759.20(10) | | | | | | $ | 1,247.86 (11) | | |
Total | | | | | | | | | | | | | | | | | | | $ | 3,466,969,228.26 | | | | | | $ | 378,246.34 | | |
| State or Other Jurisdiction of Incorporation or Organization | | | I.R.S. Employer Identification Number | |
| Delaware | | | | | 83-3311465 | | |
| Delaware | | | | | 83-3294278 | | |
| Delaware | | | | | — | | |
| Texas | | | | | — | | | ||
Chesapeake AEZ Exploration, L.L.C. | | | Oklahoma | | | | | 27-2151081 | | |
Chesapeake Appalachia, L.L.C. | | | Oklahoma | | | | | 20-3774650 | | |
Chesapeake-Clements Acquisition, L.L.C. | | | Oklahoma | | | | | 20-8716794 | | |
Chesapeake | | | Oklahoma | | | | | 27-4485832 | | |
Chesapeake Energy Louisiana, | | | Oklahoma | | | | | 73-1524569 | | |
Chesapeake | | | Oklahoma | | | | | 73-1439175 | | |
Chesapeake Exploration, | | | Oklahoma | | | | | 71-0934234 | | |
Chesapeake Land Development Company, L.L.C. | | | Oklahoma | | | | | 20-2099392 | | |
Chesapeake Louisiana, L.P. | | | Oklahoma | | | | | 73-1519126 | | |
Chesapeake Midstream Development, L.L.C. | | | Oklahoma | | | | | 46-1179116 | | |
Chesapeake NG Ventures Corporation | | | Oklahoma | | | | | 45-2354177 | | |
Chesapeake Operating, | | | Oklahoma | | | | | 73-1343196 | | |
Chesapeake | | | Oklahoma | | | | | 81-3212038 | | |
Chesapeake Royalty, L.L.C. | | | Oklahoma | | | | | 73-1549744 | | |
Chesapeake VRT, L.L.C. | | | Oklahoma | | | | | 20-8380083 | | |
CHK Energy Holdings, Inc. | | | Texas | | | | | 46-1772347 | | |
CHK NGV Leasing Company, L.L.C. | | | Oklahoma | | | | | 27-0206525 | | |
CHK Utica, L.L.C. | | | Delaware | | | | | 36-4711997 | | |
Compass Manufacturing, L.L.C. | | | Oklahoma | | | | | 26-1455378 | | |
EMLP, L.L.C. | | | Oklahoma | | | | | 27-0581428 | | |
Empress, L.L.C. | | | Oklahoma | | | | | 26-2809898 | | |
Empress Louisiana Properties, L.P. | | | Texas | | | | | 20-1993109 | | |
Esquisto Resources II, LLC | | | Texas | | | | | 47-4429762 | | |
GSF, L.L.C. | | | Oklahoma | | | | | 26-2762867 | | |
MC Louisiana Minerals, L.L.C. | | | Oklahoma | | | | | 26-3057487 | | |
MC Mineral Company, L.L.C. | | | Oklahoma | | | | | 61-1448831 | | |
MidCon Compression, L.L.C. | | | Oklahoma | | | | | 20-0299525 | | |
Nomac Services, L.L.C. | | | Oklahoma | | | | | 45-1157545 | | |
Northern Michigan Exploration Company, L.L.C. | | | Michigan | | | | | 27-2462483 | | |
Petromax E&P Burleson, LLC | | | Texas | | | | | — | | |
Sparks Drive SWD, Inc. | | | Delaware | | | | | 76-0722336 | | |
WHE AcqCo., | | | Delaware | | | | | — | | |
WHR Eagle Ford LLC | | | Delaware | | | | | — | | |
WildHorse Resources II, LLC | | | Delaware | | | | | 81-5318155 | | |
WildHorse Resources Management Company, LLC | | | Delaware | | | | | 61-1695582 | | |
Winter Moon Energy Corporation | | | Oklahoma | | | | | 26-1939483 | | |
The Ames Company, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Carmen Acquisition, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Acquisition, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Energy Louisiana Corporation
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake EP Corporation
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Exploration Limited Partnership
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Louisiana, L.P.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Operating, Inc.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Panhandle Limited Partnership
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Royalty, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Gothic Energy, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Gothic Production, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Nomac Drilling Corporation
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Mountain Front, L.L.C.
(Exact Namhe of Registrant As Specified In Its Charter)
Chesapeake ORC, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Sap Acquisition, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake-Staghorn Acquisition L.P.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake KNAN Acquisition, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake ENO Acquisition, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake South Texas Corp.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Focus, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Chesapeake Sigma, L.P.
(Exact Name of Registrant As Specified In Its Charter)
MC Mineral Company, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Oxley Petroleum Co.
(Exact Name of Registrant As Specified In Its Charter)
John C. Oxley, L.L.C.
(Exact Name of Registrant As Specified In Its Charter)
Registration Statementregistration statement on such date or dates as may be necessary to delay its effective date until the Registrantssuch Registrant shall file a further amendment which specifically states that this Registration Statementregistration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 as amended, or until the Registration Statementthis registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
Preferred Stock
Debt Securities
Preferred Stock
Depositary Shares
Common Stock
Guarantees of Debt Securities
New Warrants
Depository Shares
Share Purchase Contracts
Units
The Ames Company, L.L.C.
Carmen Acquisition, L.L.C.
Chesapeake Acquisition, L.L.C.
Chesapeake Energy Louisiana Corporation
Chesapeake EP Corporation
Chesapeake Exploration Limited Partnership
Chesapeake Louisiana, L.P.
Chesapeake Operating, Inc.
Chesapeake Panhandle Limited Partnership
Chesapeake Royalty, L.L.C.
Gothic Energy, L.L.C.
Gothic Production, L.L.C.
Nomac Drilling Corporation
Chesapeake Mountain Front, L.L.C.
Chesapeake ORC, L.L.C.
Sap Acquisition, L.L.C.
Chesapeake-Staghorn Acquisition L.P.
Chesapeake KNAN Acquisition, L.L.C.
Chesapeake ENO Acquisition, L.L.C.
Chesapeake South Texas Corp.
Chesapeake Focus, L.L.C.
Chesapeake Sigma, L.P.
MC Mineral Company, L.L.C.
Oxley Petroleum Co.
John C. Oxley, L.L.C.
We(“Chesapeake”, “we”, “us” or the “Company”) or the certain selling stockholders who may offer and sell Common Stock and/or Class A Warrants to purchase Common Stock (“Class A Warrants”), Class B Warrants to purchase Common Stock (“Class B Warrants”) and Class C Warrants to purchase Common Stock (“Class C Warrants” and, collectively with the Class A Warrants and the Class B Warrants, the “Warrants”) from time to time, together or separately, in amounts, at prices and on terms that will be determined at the time of any such offering and who may be named in this prospectus or a supplement hereto. We may offer and sell common stock, preferred stock, depositary shares and debt securities that will be fully, irrevocably and unconditionally guaranteed by certain of our subsidiaries, The Ames Company, L.L.C., Carmen Acquisition, L.L.C., Chesapeake Acquisition, L.L.C., Chesapeake Energy Louisiana Corporation, Chesapeake EP Corporation, Chesapeake Exploration Limited Partnership, Chesapeake Louisiana, L.P., Chesapeake Operating, Inc., Chesapeake Panhandle Limited Partnership, Chesapeake Royalty, L.L.C., Gothic Energy, L.L.C., Gothic Production, L.L.C., Nomac Drilling Corporation, Chesapeake Mountain Front, L.L.C., Chesapeake ORC, L.L.C., Sap Acquisition, L.L.C., Chesapeake-Staghorn Acquisition L.P., Chesapeake KNAN Acquisition, L.L.C., Chesapeake ENO Acquisition, L.L.C., Chesapeake South Texas Corp., Chesapeake Focus, L.L.C., Chesapeake Sigma, L.P., MC Mineral Company, L.L.C., Oxley Petroleum Co. and John C. Oxley, L.L.C.
This prospectus provides you with a general descriptionup to $1,500,000,000 in the aggregate of the securitiesSecurities and the selling stockholders may offer and sell up to 37,826,511 shares in the aggregate of Common Stock, (including 1,017,201 shares of Common Stock underlying the Warrants), 1,188,341 Class A Warrants, 1,236,148 Class B Warrants and 1,485,091 Class C Warrants.
financial statements.
NEITHERTHE SECURITIESAND EXCHANGE COMMISSIONNORANYSTATESECURITIESCOMMISSIONHASAPPROVEDORDISAPPROVEDOFTHESESECURITIESORDETERMINEDIFTHISPROSPECTUSISTRUTHFULORCOMPLETE. ANYREPRESENTATIONTOTHECONTRARYISACRIMINALOFFENSE.
May 17, 2021
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You should rely only on the information included or incorporated by reference in this prospectus and any accompanying prospectus supplement. We have not authorized any dealer, salesman or other person to provide you with additional or different information.
Securities are sold or otherwise disposed of on a later date. It is important for you to read and consider all information contained in this prospectus, including the documents incorporated by reference therein, in making your investment decision. You should also read and consider the information in the documents to which we have referred you under the caption “
Where You Can Find More Information” in this prospectus.ABOUT CHESAPEAKE ENERGY CORPORATION
We are among the ten largest independent natural gas producers in the United States in terms of natural gas produced. Headquartered in Oklahoma City, our 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 which includes Oklahoma, western Arkansas, southwestern Kansas and the Texas Panhandle. We have smaller operations in the Deep Giddings field in Texas, the Tuscaloosa Trend in Louisiana, the Permian Basin region of southeastern New Mexico and the Williston Basin of North Dakota and Montana.
Unless the context requires otherwise or unless otherwise noted, all referencescontained in this prospectus, or anyincluding information incorporated by reference in this prospectus and the accompanying prospectus supplement. Neither we nor the selling stockholders have authorized anyone to provide you with different or additional information. Neither we nor the selling stockholders take any responsibility for, and can provide no assurance as to the reliability of any other information that others may give you. Neither we nor the selling stockholders are making an offer to sell securities in any jurisdiction where the offer or sale of securities is not permitted. You should not assume that the information included in this prospectus, any applicable prospectus supplement, to “Chesapeake,”or the documents incorporated by reference herein is accurate as of any date other than their respective dates. Our business, financial condition, results of operations and prospects may have changed since those dates.
The Ames Company, L.L.C., Carmen Acquisition, L.L.C., Chesapeake Acquisition, L.L.C., Chesapeake Energy Louisiana Corporation, Chesapeake EP Corporation, Chesapeake Exploration Limited Partnership, Chesapeake Louisiana, L.P., Chesapeake Operating, Inc., Chesapeake Panhandle Limited Partnership, Chesapeake Royalty, L.L.C., Gothic Energy, L.L.C., Gothic Production, L.L.C., Nomac Drilling Corporation, Chesapeake Mountain Front, L.L.C., Chesapeake ORC, L.L.C., Sap Acquisition, L.L.C., Chesapeake-Staghorn Acquisition L.P., Chesapeake KNAN Acquisition, L.L.C., Chesapeake ENO Acquisition, L.L.C., Chesapeake South Texas Corp., Chesapeake Focus, L.L.C., Chesapeake Sigma, L.P., MC Mineral Company, L.L.C., Oxley Petroleum Co.
Your investment in our securities will involve risks. You should carefully consider, in addition to the other information contained in, or incorporated by reference into, this prospectus and any accompanying prospectus supplement, the risks described below before deciding whether an investment in our securities is appropriate for you.
Risks Related to Our Business
Oil and gas prices are volatile. A decline in prices could adversely affect our financial results, cash flows, access to capital and ability to grow.
Our revenues, operating results, profitability, future rate of growth and the carrying value of our oil and gas properties depend primarily upon the prices we receive for the oil and gas we sell. Prices also affect the amount of cash flow available for capital expenditures and our ability to borrow money or raise additional capital. The amount we can borrow from banks is subject to periodic redeterminations based on prices specified by our bank group at the time of redetermination. In addition, we may have ceiling test writedowns in the future if prices fall significantly.
Historically, the markets for oil and gas have been volatile and they are likely to continue to be volatile. Wide fluctuations in oil and gas prices may result from relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and other factors that are beyond our control, including:
These factors and the volatility of the energy markets make it extremely difficult to predict future oil and gas price movements with any certainty. Declines in oil and gas prices would not only reduce revenue, but could reduce the amount of oil and gas that we can produce economically and, as a result, could have a material adverse effect on our financial condition, results of operations and reserves. Further, oil and gas prices do not necessarily move in tandem. Because approximately 91% of our proved reserves are currently natural gas reserves, we are more affected by movements in natural gas prices.
Our level of indebtedness and preferred stock may adversely affect operations and limit our growth, and we may have difficulty making debt service and preferred stock dividend payments on our indebtedness and preferred stock as such payments become due.
As of June 30, 2003, we had $2.01 billion in aggregate principal amount of long-term indebtedness outstanding, $26 million of which was secured indebtedness, plus preferred stock outstanding having an aggregate liquidation preference of $379.9 million. Our long-term indebtedness represented 57% of our total book capitalization at June 30, 2003.
Our level of indebtedness and preferred stock affects our operations in several ways, including the following:
We may incur additional debt, including significant secured indebtedness, or issue additional series of preferred stock, in order to make future acquisitions or to develop our properties. A higher level of indebtedness increases the risk that we may default on our debt obligations, including debt securities issued pursuant to this prospectus. Our ability to meet our debt obligations and to reduce our level of indebtedness depends on our future performance. General economic conditions, oil and gas prices and financial, business and other factors affect our operations and our future performance. Many of these factors are beyond our control. We may not be able to generate sufficient cash flow to pay the interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our capital stock or a refinancing of our debt include financial market conditions, the value of our assets and our performance at the time we need capital.
In addition, our bank borrowing base is subject toaccordance therewith, file periodic redeterminations. We could be forced to repay a portion of our bank borrowings due to redeterminations of our borrowing base. If we are forced to do so, we may not have sufficient funds to make such repayments. If we do not have sufficient funds and are otherwise unable to negotiate renewals of our borrowings or arrange new financing, we may have to sell significant assets. Any such sale could have a material adverse effect on our business and financial results.
Competition in the oil and natural gas industry is intense, and many of our competitors have greater financial and other resources than we do.
We operate in the highly competitive areas of oil and natural gas acquisition, development, exploitation, exploration and production. We face intense competition from both major and other independent oil and natural gas companies in each of the following areas:
Many of our competitors have financial and other resources substantially greater than ours, and some of them are fully integrated oil companies. These companies may be able to pay more for development prospects and productive oil and natural gas properties and may be able to define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. Our ability to develop and exploit our oil and natural gas properties and to acquire additional properties in the future will depend upon our ability to successfully conduct operations, evaluate and select suitable properties and consummate transactions in this highly competitive environment.
Our commodity price risk management transactions may expose us to the risk of financial loss.
In order to manage our exposure to price volatility in marketing our oil and gas, we enter into oil and gas price risk management arrangements for a portion of our expected production. Commodity price risk management transactions may limit the prices we actually realize and we may experience reductions in oil and gas revenues from our commodity price risk management activities in the future. In addition, our commodity price risk management transactions may expose us to the risk of financial loss in certain circumstances, including instances in which:
Some of our commodity price and interest rate risk management arrangements require us to deliver cash collateral or other assurances of performance to the counterparties in the event that our payment obligations with respect to our risk management transactions exceed certain levels. As of June 30, 2003, we were required to post $23.0 million of collateral through letters of credit issued under our bank credit facility. Future collateral requirements are uncertain and will depend on arrangements with our counterparties and highly volatile natural gas and oil prices.
The actual quantities and present value of our proved reserves may prove to be lower than we have estimated.
This prospectus and the documents incorporated by reference in this prospectus contain estimates of our proved reserves and the estimated future net revenues from our proved reserves as well as estimates relating to our recent acquisitions. These estimates are based upon various assumptions, including assumptions required by the SEC relating to oil and gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. The process of estimating oil and gas reserves is complex. The process involves significant decisions and assumptions in the evaluation of available geological, geophysical, engineering and economic data for each reservoir. Therefore, these estimates are inherently imprecise.
Actual future production, oil and gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and gas reserves most likely will vary from these estimates. Such variations may be significant and could materially affect the estimated quantities and present value of our proved reserves. In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development drilling, prevailing oil and gas prices and other factors, many of which are beyond our control. Our properties may also be susceptible to hydrocarbon drainage from production by operators on adjacent properties.
At December 31, 2002 approximately 26% by volume of our estimated proved reserves were undeveloped. Recovery of undeveloped reserves requires significant capital expenditures and successful drilling operations. The estimates of these reserves include the assumption that we will make significant capital expenditures to develop the reserves, including $248 million in 2003. You should be aware that the estimated costs may not be accurate, development may not occur as scheduled and the results may not be as estimated.
You should not assume that the present values referred to in the documents incorporated by reference in this prospectus represent the current market value of our estimated oil and gas reserves. In accordance with SEC requirements, the estimates of our present values are based on prices and costs as of the date of the estimates. The December 31, 2002 present value is based on weighted average oil and gas prices of $30.18 per barrel of oil and $4.28 per mcf of natural gas. Actual future prices and costs may be materially higher or lower than the prices and costs as of the date of an estimate.
Any changes in consumption by oil and gas purchasers or in governmental regulations or taxation will also affect actual future net cash flows.
The timing of both the production and the expenses from the development and production of oil and gas properties will affect both the timing of actual future net cash flows from our proved reserves and their present value. In addition, the 10% discount factor, which is required by the SEC to be used in calculating discounted future net cash flows for reporting purposes, is not necessarily the most accurate discount factor. The effective interest rate at various times and the risks associated with our business or the oil and gas industry in general will affect the accuracy of the 10% discount factor.
We may not have funds sufficient to make the significant capital expenditures required to replace our reserves.
Our exploration, development and acquisition activities require substantial capital expenditures. Historically, we have funded our capital expenditures through a combination of cash flows from operations, our bank credit facility and debt and equity issuances. Future cash flows are subject to a number of variables, such as the level of production from existing wells, prices of oil and gas, and our success in developing and producing new reserves. If revenue were to decrease as a result of lower oil and gas prices or decreased production, and our access to capital were limited, we would have a reduced ability to replace our reserves. If our cash flow from operations is not sufficient to fund our capital expenditure budget, we may not be able to access additional bank debt, debt or equity or other methods of financing to meet these requirements.
Reserve estimates of properties acquired in 2003 have not been prepared by independent petroleum engineers. Our internal estimates may not be as reliable as estimates of those reserves by independent engineers.
Our estimates of proved reserves attributed to our 2003 acquisitions incorporated by reference in this prospectus have not been reviewed or reported on by independent petroleum engineers. These estimates were prepared by our own engineers and professionals using criteria otherwise in compliance with SEC rules. Furthermore, our internal reserve estimates for these acquisitions are based upon data available to us which may not be as complete as data available on our other properties. Oil and gas pricing can affect estimates of quantities of proved reserves due to the impact of pricing on ultimate economic recovery. Estimates prepared by independent engineers might be different than our internal estimates.
If we are not able to replace reserves, we may not be able to sustain production.
Our future success depends largely upon our ability to find, develop or acquire additional oil and gas reserves that are economically recoverable. Unless we replace the reserves we produce through successful development, exploration or acquisition, our proved reserves will decline over time. In addition, approximately 26% by volume of our total estimated proved reserves at December 31, 2002 were undeveloped. By their nature, estimates of undeveloped reserves are less certain. Recovery of such reserves will require significant capital expenditures and successful drilling operations. We may not be able to successfully find and produce reserves economically in the future. In addition, we may not be able to acquire proved reserves at acceptable costs.
Acquisitions may prove to be worth less than we paid because of uncertainties in evaluating recoverable reserves and potential liabilities.
Our recent growth is due in part to acquisitions of exploration and production companies and producing properties. We expect acquisitions will also contribute to our future growth. Successful acquisitions require an assessment of a number of factors, many of which are beyond our control. These factors include recoverable
reserves, exploration potential, future oil and gas prices, operating costs and potential environmental and other liabilities. Such assessments are inexact and their accuracy is inherently uncertain. In connection with our assessments, we perform a review of the acquired properties. However, such a review will not reveal all existing or potential problems. In addition, our review may not permit us to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities. We do not inspect every well. Even when we inspect a well, we do not always discover structural, subsurface and environmental problems that may exist or arise. Our review prior to signing a definitive purchase agreement may be even more limited. For example, based on our knowledge of the properties and in exchange for concessions in the negotiations for the El Paso acquisition, we elected to forego most due diligence review including environmental site inspections prior to signing a definitive agreement which contains limited remedies against the seller.
We are generally not entitled to contractual indemnification for preclosing liabilities, including environmental liabilities, on acquisitions, including our recent El Paso and Vintage acquisitions. Normally, we acquire interests in properties on an “as is” basis with limited remedies for breaches of representations and warranties. We could incur significant unknown liabilities, including environmental liabilities, or experience losses due to title defects, in our recent acquisitions for which we have limited or no contractual remedies or insurance coverage.
In addition, competition for producing oil and gas properties is intense and many of our competitors have financial and other resources that are substantially greater than those available to us. Therefore, we may not be able to acquire oil and gas properties that contain economically recoverable reserves or be able to complete such acquisitions on acceptable terms.
Additionally, significant acquisitions can change the nature of our operations and business depending upon the character of the acquired properties, which may have substantially different operating and geological characteristics or be in different geographic locations than our existing properties. For example, we might decide to pursue acquisitions or properties located in geographic regions other than the Mid-Continent region. To the extent that such acquired properties are substantially different than our existing properties, our ability to efficiently realize the economic benefits of such transactions may be limited.
Future price declines may result in a write-down of our asset carrying values.
We utilize the full cost method of accounting for costs related to our oil and gas properties. Under this method, all such costs (productive and nonproductive) are capitalized and amortized on an aggregate basis over the estimated lives of the properties using the units-of-production method. These capitalized costs are subject to a ceiling test, however, which limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved oil and gas reserves discounted at 10% plus the lower of cost or market value of unproved properties. The full cost ceiling is evaluated at the end of each quarter utilizing the prices for oil and gas at that date. A significant decline in oil and gas prices from current levels, or other factors, without other mitigating circumstances, could cause a future write-down of capitalized costs and a non-cash charge against future earnings.
Oil and gas drilling and producing operations are hazardous and expose us to environmental liabilities.
Oil and gas operations are subject to many risks, including well blowouts, cratering and explosions, pipe failure, fires, formations with abnormal pressures, uncontrollable flows of oil, natural gas, brine or well fluids, and other environmental hazards and risks. Our drilling operations involve risks from high pressures and from mechanical difficulties such as stuck pipes, collapsed casings and separated cables. If any of these risks occurs, we could sustain substantial losses as a result of:
Our liability for environmental hazards includes those created either by the previous owners of properties that we purchase or lease or by acquired companies prior to the date we acquire them. We maintain insurance against some, but not all, of the risks described above. Our insurance may not be adequate to cover casualty losses or liabilities. Also, in the future we may not be able to obtain insurance at premium levels that justify its purchase.
Exploration and development drilling may not result in commercially productive reserves.
We do not always encounter commercially productive reservoirs through our drilling operations. The new wells we drill or participate in may not be productive and we may not recover all or any portion of our investment in wells we drill or participate in. The seismic data and other technologies we use do not allow us to know conclusively prior to drilling a well that oil or gas is present or may be produced economically. The cost of drilling, completing and operating a well is often uncertain, and cost factors can adversely affect the economics of a project. Our efforts will be unprofitable if we drill dry wells or wells that are productive but do not produce enough reserves to return a profit after drilling, operating and other costs. Further, our drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:
The loss of key personnel could adversely affect our ability to operate.
We depend, and will continue to depend in the foreseeable future, on the services of our officers and key employees with extensive experience and expertise in evaluating and analyzing producing oil and gas properties and drilling prospects, maximizing production from oil and gas properties, marketing oil and gas production, and developing and executing financing and hedging strategies. Our ability to retain our officers and key employees is important to our continued success and growth. The unexpected loss of the services of one or more of these individuals could have a detrimental effect on our business. We do not maintain key person life insurance on any of our personnel.
Lower oil and gas prices could negatively impact our ability to borrow.
Our current bank credit facility limits our borrowings to a borrowing base of $350 million as of the date of this prospectus. The borrowing base is determined periodically at the discretion of a majority of the banks and is based in part on oil and gas prices. Additionally, some of our indentures contain covenants limiting our ability to incur indebtedness in addition to that incurred under our bank credit facility. These indentures limit our ability to incur additional indebtedness unless we meet one of two alternative tests. The first alternative is based on a percentage of our adjusted consolidated net tangible assets, which is determined using discounted future net
revenues from proved oil and gas reserves as of the end of each year. As of the date of this prospectus, we cannot incur additional indebtedness under this first alternative of the debt incurrence test. The second alternative is based on the ratio of our adjusted consolidated EBITDA (as defined in the agreement) to our adjusted consolidated interest expense over a trailing twelve-month period. As of the date of this prospectus, we are permitted to incur significant additional indebtedness under this second alternative of the debt incurrence test. Lower oil and gas prices in the future could reduce our adjusted consolidated EBITDA (as defined in the agreement), as well as our adjusted consolidated net tangible assets, and thus could reduce our ability to incur additional indebtedness.
Our oil and gas marketing activities may expose us to claims from royalty owners.
In addition to marketing our own oil and gas production, our marketing activities include marketing oil and gas production for working interest owners and royalty owners in the wells that we operate. These activities include the operation of gathering systems and the sale of oil and natural gas under various arrangements. Royalty owners have commenced litigation against a number of companies in the oil and gas production business claiming that amounts paid for production attributable to the royalty owners’ interest violated the terms of the applicable leases and state law, that deductions from the proceeds of oil and gas production were unauthorized under the applicable leases and that amounts received by upstream sellers should be used to compute the amounts paid to the royalty owners. Chesapeake presently is a defendant in four such cases commenced as class action suits. As new cases are decided and the law in this area continues to develop, our liability relating to the marketing of oil and gas may increase.
Risks Related to Our Capital Stock
We may not be able to pay cash dividends on our capital stock.
We are required to pay all declared dividends on our preferred stock in cash. Our existing indentures limit, and any indentures and other financing agreements that we enter into in the future will likely limit, our ability to pay cash dividends on our capital stock. Specifically, under our existing indentures, we may pay cash dividends and make other distributions on or in respect of our capital stock, including our preferred and common stock, only if certain financial tests are met.
Under Oklahoma law, cash dividends on capital stock may only be paid from “surplus” or, if there is no “surplus,” from the corporation’s net profits for the then current or the preceding fiscal year. Unless we continue to operate profitably, our ability to pay cash dividends on our capital stock would require the availability of adequate “surplus,” which is defined as the excess, if any, of our net assets (total assets less total liabilities) over our capital. Further, even if adequate surplus is available to pay cash dividends on the preferred stock and common stock (if declared), we may not have sufficient cash to pay dividends on our preferred stock or common stock, as the case maybe.
Our certificate of incorporation, bylaws, the Oklahoma General Corporation Act and our shareholder rights agreement contain provisions that could discourage an acquisition or change of control of our company.
Our shareholder rights agreement and the Oklahoma Business Combination Statute, together with certain provisions of our certificate of incorporation and bylaws, may make it more difficult to effect a change in control of our company, to acquire us or to replace incumbent management. These provisions could potentially deprive our stockholders of opportunities to sell shares of our stock at above-market prices. Please read “Description of Capital Stock—Anti-Takeover Provisions.”
Risks Related to Debt Securities
If an active trading market does not develop for a series of debt securities sold pursuant to this prospectus, you may be unable to sell any such debt securities or to sell any such debt securities at a price that you deem sufficient.
Unless otherwise specified in an accompanying prospectus supplement, any debt securities sold pursuant to this prospectus will be new securities for which there currently is no established trading market. We may not list
any debt securities sold pursuant to this prospectus on a national securities exchange. While the underwriters of a particular offering of debt securities may advise us that they intend to make a market in those debt securities, the underwriters will not be obligated to do so and may stop their market making at any time. No assurance can be given:
A guarantee of debt securities could be voided if the guarantors fraudulently transferred their guarantees at the time they incurred the indebtedness, which could result in the holders of debt securities being able to rely on only Chesapeake Energy Corporation to satisfy claims.
Any series of debt securities issued pursuant to this prospectus will be fully, irrevocably and unconditionally guaranteed by the Subsidiary Guarantors. However, under U.S. bankruptcy law and comparable provisions of state fraudulent transfer laws, such a guarantee can be voided, or claims under a guarantee may be subordinated to all other debts of that guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee:
In addition, any payment by that guarantor under a guarantee could be voided and required to be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor.
The measures of insolvency for purposes of fraudulent transfer laws vary depending upon the governing law. Generally, a guarantor would be considered insolvent if:
Holders of any debt securities sold pursuant to this prospectus will be effectively subordinated to all of our and the Subsidiary Guarantors’ secured indebtedness and to all liabilities of our non-guarantor subsidiaries.
Holders of our secured indebtedness, including the indebtedness under our credit facilities, have claims with respect to our assets constituting collateral for their indebtedness that are prior to the claims of any debt securities sold pursuant to this prospectus. In the event of a default on such debt securities or our bankruptcy, liquidation or reorganization, those assets would be available to satisfy obligations with respect to the indebtedness secured thereby before any payment could be made on debt securities sold pursuant to this prospectus. Accordingly, the secured indebtedness would effectively be senior to such series of debt securities to the extent of the value of the
collateral securing the indebtedness. To the extent the value of the collateral is not sufficient to satisfy the secured indebtedness, the holders of that indebtedness would be entitled to share with the holders of the debt securities issued pursuant to this prospectus and the holders of other claims against us with respect to our other assets.
In addition, the Subsidiary Guarantors do not constitute all of our subsidiaries and any series of debt securities issued and sold pursuant to this prospectus will not be guaranteed by all of our subsidiaries, and our non-guarantor subsidiaries will be permitted to incur additional indebtedness under the indenture. As a result, holders of such debt securities will be effectively subordinated to claims of third party creditors, including holders of indebtedness, and preferred shareholders of these non-guarantor subsidiaries. Claims of those other creditors, including trade creditors, secured creditors, governmental taxing authorities, holders of indebtedness or guarantees issued by the non-guarantor subsidiaries and preferred shareholders of the non-guarantor subsidiaries, will generally have priority as to the assets of the non-guarantor subsidiaries over our claims and equity interests. As a result, holders of our indebtedness, including the holders of the debt securities sold pursuant to this prospectus, will be effectively subordinated to all those claims.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may inspectSuch periodic reports, proxy statements and copy such materialother information are available at the public reference facilities maintained bywebsite of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call
1-800-SEC-0330 our website as soon as reasonably practicable after this material is electronically filed with, or furnished to, the SEC. The reference to our website or web address does not constitute incorporation by reference of the information contained at that site.
In addition,the prospectus, and you should review that information in order to understand the nature of any investment by you in our reportsshares of common stock. Information that we later provide to the SEC, and otherwhich is deemed to be “filed” with the SEC, will automatically update information concerning us can be inspected at the New York Stock Exchange, 20 Broad Street, New York, New York 10005, where our common stock is listed.
The following documents wepreviously filed with the SEC, pursuantand may update or replace information in this prospectus and information previously filed with the SEC. We are incorporating by reference the documents listed below; provided, however, that we are not incorporating any documents or information deemed to the Exchange Act are incorporated herein by reference:
All documents subsequently filed by us pursuant to SectionsSection 13(a), 13(c), 14 or 15(d) of the Exchange Act, (excluding any information furnished pursuant to Item 9 or Item 12 on any current report on Form 8-K) subsequent toincluding all such documents we may file with the SEC after the date of this filingthe initial registration and prior to the terminationeffectiveness of this offeringthe Registration Statement (excluding, in each case, any information deemed furnished rather than filed), shall be deemed to be incorporated by reference in this prospectus anduntil the termination of each offering under this prospectus.
We will provide without charge to each person to whom this prospectus is delivered, upon written or oral request of such person, a copy of any or all documents incorporated by reference in this prospectus. Requests for such copies should be directedprospectus is automatically updated and superseded if information contained in the prospectus modifies or replaces this information.
We maintain a website at
This prospectus includes and incorporates. Information contained on, or accessible through, our website is not incorporated by reference “forward-looking statements”in this prospectus.
Althoughrisks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this prospectus and any accompanying prospectus supplement. Moreover, we believeoperate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the expectationsforward-looking statements contained in this prospectus and forecastsany accompanying prospectus supplement. The results, events and circumstances reflected in these and otherthe forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They canmay not be affected by inaccurate assumptionsachieved or by known or unknown risksoccur, and uncertainties. Factors that could cause actual results, toevents or circumstances could differ materially from expected results arethose described underin the forward-looking statements. Please refer to the “Risk Factors” section in this prospectus, any accompanying prospectus supplement, and include:
We caution you not to place undue reliance on these forward-looking statements, which speak onlyus as of the date of this prospectus and any accompanying prospectus supplement. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
the accompanying prospectus supplement.
Except as may
supplement or free writing prospectus.
For
| | | Shares of Common Stock Beneficially Owned Prior to the Offering(1) | | | Shares of Common Stock Offered Hereby | | | Amount of Class A Warrants Offered Hereby | | | Amount of Class B Warrants Offered Hereby | | | Amount of Class C Warrants Offered Hereby | | | Shares of Common Stock Beneficially Owned After Completion of the Offering(2) | | ||||||||||||||||||||||||||||||
| | | Number | | | Percentage | | | Number | | | Percentage | | ||||||||||||||||||||||||||||||||||||
Selling stockholders: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alta Fundamental Funds(3) | | | | | 663,944 | | | | | | * | | | | | | 5,004 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
ALP Funds(4) | | | | | 4,094,054 | | | | | | 4.18% | | | | | | 25,903 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
BlackRock, Inc.(5) | | | | | 26,026 | | | | | | * | | | | | | 26,026 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
CRMC Funds(6) | | | | | 6,856,895 | | | | | | 7.00% | | | | | | 5,361,075 | | | | | | 528,988 | | | | | | 587,765 | | | | | | 379,067 | | | | | | — | | | | | | — | | |
CarVal Funds(7) | | | | | 2,072,987 | | | | | | 2.12% | | | | | | 18,615 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Cyrus Funds(8) | | | | | 3,822 | | | | | | * | | | | | | 3,822 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
DE Shaw Funds(9) | | | | | 7,242,597 | | | | | | 7.40% | | | | | | 1,042,362(17) | | | | | | 372,820 | | | | | | 414,245 | | | | | | 230,136 | | | | | | — | | | | | | — | | |
Fidelity Funds(10) | | | | | 7,220,832 | | | | | | 7.37% | | | | | | 6,591,014 | | | | | | 210,723 | | | | | | 234,138 | | | | | | 184,957 | | | | | | — | | | | | | — | | |
Franklin(11) | | | | | 10,861,202 | | | | | | 11.09% | | | | | | 101,888 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | Shares of Common Stock Beneficially Owned Prior to the Offering(1) | | | Shares of Common Stock Offered Hereby | | | Amount of Class A Warrants Offered Hereby | | | Amount of Class B Warrants Offered Hereby | | | Amount of Class C Warrants Offered Hereby | | | Shares of Common Stock Beneficially Owned After Completion of the Offering(2) | | ||||||||||||||||||||||||||||||
| | | Number | | | Percentage | | | Number | | | Percentage | | ||||||||||||||||||||||||||||||||||||
Glendon Funds (12) | | | | | 3,720,878 | | | | | | 3.80% | | | | | | 19,953 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Keyframe Funds(13) | | | | | 4,804 | | | | | | * | | | | | | 4,804 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Oaktree Funds(14) | | | | | 12,705,854 | | | | | | 12.97% | | | | | | 11,939,113 | | | | | | 75,810 | | | | | | — | | | | | | 690,931 | | | | | | — | | | | | | — | | |
Paloma(15) | | | | | 192,638 | | | | | | * | | | | | | 4,268 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
PGIM, Inc., acting through its PGIM Fixed Income division, on behalf of various managed or advised funds and/or accounts | | | | | 12,663,840 | | | | | | 12.93% | | | | | | 12,663,840 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Redwood Capital Management, LLC(16) | | | | | 18,824 | | | | | | * | | | | | | 18,824 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Securities may from time to time be traded, in the over-the-counter market, or in independently negotiated transactions or otherwise. The methods by which the Securities may be sold by us or the selling stockholders include: • privately negotiated transactions; • underwritten transactions; • exchange distributions and/or secondary distributions; • sales in the over-the-counter market; • ordinary brokerage transactions and transactions in which the broker solicits purchasers; • broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; • a block trade (which may involve crosses) in which the broker or dealer so engaged will attempt to sell the Securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; • purchases by a broker or dealer as principal and resale by such broker or dealer for its own account pursuant to this prospectus; • short sales; • through the writing of options on the shares, whether or not the options are listed on an options exchange; • through the distributions of the shares by any selling stockholder to its partners, members or stockholders; • a combination of any such methods of sale; and • any other method permitted pursuant to applicable law. We or the selling stockholders may also sell shares of Common Stock under Rule 144 under the Securities Act, in each case if available, rather than under this prospectus. Such transactions may be effected by us or the selling stockholders at market prices prevailing at the time of sale or at negotiated prices. We or the selling stockholders may effect such transactions by selling the Securities to underwriters or to or through broker-dealers, and such underwriters or broker-dealers may receive compensation in the form of discounts or commissions from us or the selling stockholders and may receive commissions from the purchasers of the securities for whom they may act as agent. We or the selling stockholders may agree to indemnify any underwriter, broker-dealer or agent that participates in transactions involving sales of the Securities against certain liabilities, including liabilities arising under the Securities Act. We have agreed to register the Securities for sale under the Securities Act and to indemnify the selling stockholders and each person who participates as an underwriter in the offering of the Securities against certain civil liabilities, including certain liabilities under the Securities Act. In connection with sales of the Securities under this prospectus, the selling stockholders may enter into hedging transactions with broker-dealers, who may in turn engage in short sales of the Securities in the course of hedging the positions they assume. The selling stockholders also may sell Securities short and deliver them to close their short positions, or loan or pledge the securities to broker-dealers that in turn may sell them. The selling stockholders may from time to time pledge or grant a security interest in some or all of the Securities owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell Securities from time to time under this prospectus, or under an 17 amendment to this prospectus under Rule 424 or other applicable provision of the Securities Act amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. There can be no assurances that the selling stockholders will sell any or all of the Securities offered under this prospectus. 18 | |||||||||||||
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DESCRIPTION OF DEBT SECURITIES
We
This descriptionIndentures below. The summary is a summary of the material provisions of the debt securities and the Indenture. We urge you to read thenot complete. The form of each Indenture has been filed with the Indenture filedSEC as an exhibit to the registration statement of which this prospectus is a part, becauseand you should read the Indenture, and not this description, govern your rights as a holder of debt securities.
Indentures for provisions that may be important to you. Capitalized terms used in the summary have the meanings specified in the Indentures.
The Indenture does not limit the total amount of debt securities that we may issue. We may issue debt securities under the Indentureissued thereunder from time to time without limitation as to aggregate principal amount. We may specify a maximum aggregate principal amount for the Debt Securities of any series. We will determine the terms and conditions of the Debt Securities, including the maturity, principal and interest, but those terms must be consistent with the Indenture. The Debt Securities will be our unsecured obligations. If the prospectus supplement so indicates, the Debt Securities will be convertible into our common stock.
We will prepare aprior payment in full of all of our Senior Debt (as defined) as described in the prospectus supplement and either an indenture supplement or a resolution of our board of directors and an accompanying officers’ certificate relatingapplicable to any Subordinated Debt Securities.
This descriptionDebt Securities not inconsistent with the provisions of debt securities willthe Indenture.
The prospectus supplement will also describe any materialsubstantial discount below their principal amount. Special United States federal income tax consequencesconsiderations applicable to Debt Securities sold at an original issue discount may be described in the applicable prospectus supplement. In addition, special United States federal income tax or other special considerations regardingapplicable to any Debt Securities that are denominated in a currency or currency unit other than United States dollars may be described in the applicable prospectus supplement.
At our option, we may make interest payments by check mailed to the registered holders of debt securities or, if so statedits nominee identified in the applicable prospectus supplement, atwill be deposited with such Depositary or nominee or its custodian and will bear a legend regarding the optionrestrictions on exchanges and registration of a holder by wire transfer thereof referred to an account designated by the holder.
Unless otherwisebelow and any such other matters as may be provided infor pursuant to the applicable prospectus supplement, fully registered securities may be transferred or exchanged at the office of the Trustee at which its corporate trust business is principally administered in the United States, subject to the limitations provided in the Indenture, without the payment of any service charge, other than any applicable tax or governmental charge.
Any funds we pay to a paying agent for the payment of amounts due on any debt securities that remain unclaimed for two years will be returned to us, and the holders of the debt securities must look only to us for payment after that time.
Indenture.
Unless otherwise indicated in an accompanying prospectus supplement, “Restricted Subsidiary” means any subsidiary of our company other than an Unrestricted Subsidiary. Unless otherwise indicated in an accompanying prospectus supplement relating to a particular series of debt securities, our board of directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary.
Unless otherwise indicated in an accompanying prospectus supplement, “Unrestricted Subsidiary” means:
(a) Chesapeake Energy Marketing, Inc. until it is designated as a Restricted Subsidiary;
(b) any subsidiary of an Unrestricted Subsidiary; and
(c) any subsidiary of our company or of a Restricted Subsidiary that is designated as an Unrestricted Subsidiary by a resolution adopted by our board of directors.
The obligations of each Subsidiary Guarantor under its guarantee will be limited as necessary to prevent that guarantee from constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. Each Subsidiary Guarantor that makes a payment or distribution under a guarantee shall be entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount based on the respective net assets of each Subsidiary Guarantor at the time of such payment determined in accordance with GAAP.
If a guarantee were rendered voidable, it could be subordinated by a court to all other indebtedness (including guarantees and other contingent liabilities) of the applicable Subsidiary Guarantor, and, depending on the amount of such indebtedness, a Subsidiary Guarantor’s liability on its guarantee could be reduced to zero. See “Risk Factors—Risks Related to Debt Securities—A guarantee of debt securities could be voided if the guarantors fraudulently transferred their guarantees at the time they incurred the indebtedness, which could result in the holders of debt securities being able to rely on only Chesapeake Energy Corporation to satisfy claims.”
Unless otherwise indicated in an accompanying prospectus supplement and subject to the next paragraph, no Subsidiary Guarantor may consolidate or merge with or into (whether or not such Subsidiary Guarantor is the surviving entity) another entity unless:
The preceding does not prohibit a merger between Subsidiary Guarantors or a merger between our company and a Subsidiary Guarantor.
In the event of a sale or other disposition of all or substantially all of the assets of any Subsidiary Guarantor, or a sale or other disposition of all the capital stock of such Subsidiary Guarantor, in any case whether by way of merger, consolidation or otherwise, or a Subsidiary Guarantor otherwise ceases to be a Subsidiary Guarantor,
then the person acquiring the assets (in the event of a sale or other disposition, by way of such a merger, consolidation or otherwise, of all or substantially all of the assets of such Subsidiary Guarantor) or such Subsidiary Guarantor (in any other event) will be released and relieved of any obligations under its guarantee.
Covenants
Reports. The Indenture contains the following covenant for the benefit of the holders of all series of debt securities:
Notwithstanding that we may not be required to remain subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, we will file with the SEC and provide the Trustee and holders of Debt Securities with annual reports and such information, documents and other reports specified in Sections 13 and 15(d) of the Exchange Act.
A series of debt securities may provide for other covenants applicable to us and our subsidiaries. A description of any such affirmative and negative covenants will be contained in a prospectus supplement applicable to such series.
Events of Default, Remedies and Notice
Events of Default. Unless otherwise indicated in an accompanying prospectus supplement, each of the following events will be an “Event of Default” under the Indenture with respect to a series of debt securities:
Exercise of Remedies. If an Event of Default, other than an Event of Default described in the fifth bullet point above, occurs and is continuing, the Trustee or the holders of at least 25% in principal amount of the outstanding debt securities of that series may declare the entire principal of, premium, if any, and accrued and unpaid interest, if any, on all the debt securities of that series to be due and payable immediately.
A default under the fourth bullet point above will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of the outstanding debt securities of that series notify us and the Subsidiary Guarantors of the default and such default is not cured within 60 days after receipt of notice.
If an Event of Default described in the fifth bullet point above occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest on all outstanding debt securities of all series will become immediately due and payable without any declaration of acceleration or other act on the part of the Trustee or any holders.
The holders of a majority in principal amount of the outstanding debt securities of a series may:
If an Event of Default occurs and is continuing, the Trustee will be under no obligation, except as otherwise provided in the Indenture, to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee reasonable indemnity or security against any costs, liability or expense. No holder may pursue any remedy with respect to the Indenture or the debt securities of any series, except to enforce the right to receive payment of principal, premium or interest when due, unless:
The holders of a majority in principal amount of the outstanding debt securities of a series have the right, subject to certain restrictions, to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any right or power conferred on the Trustee with respect to that series of debt securities. The Trustee, however, may refuse to follow any direction that:
Notice of Events of Default. Upon the occurrence of an Event of Default, we are required to give written notice to the Trustee and indicate the status of the default and what action we are taking or propose to take to cure the default. In addition, we are required to deliver to the Trustee, within 90 days after the end of each fiscal year, a compliance certificate indicating that we have complied with all covenants contained in the Indenture or whether any default or Event of Default has occurred during the previous year.
If an Event of Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each holder a notice of the Event of Default by the later of 90 days after the Event of Default occurs or 30 days after the Trustee knows of the Event of Default. Except in the case of a default in the payment of principal, premium or interest with respect to any debt securities, the Trustee may withhold such notice, but only if and so long as the board of directors, the executive committee or a committee of directors or responsible officers of the Trustee in good faith determines that withholding such notice is in the interests of the holders.
Amendments and Waivers. We may amend the Indenture without the consent of any holder of debt securities to:
In addition, we may amend the Indenture if the holders of a majority in principal amount of all debt securities of each series that would be affected then outstanding under the Indenture consent to it. We may not, however, without the consent of each holder of outstanding debt securities of each series that would be affected, amend the Indenture to:
The consent of the holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. After an amendment under the Indenture becomes effective, we are required to mail to all holders a notice briefly describing the amendment. The failure to give, or any defect in, such notice, however, will not impair or affect the validity of the amendment.
The holders of a majority in aggregate principal amount of the outstanding debt securities of each affected series, on behalf of all such holders, and subject to certain rights of the Trustee, may waive:
except that such majority of holders may not waive a default:
Defeasance. At any time, we may terminate, with respect to debt securities of a particular series, all our obligations under such series of debt securities and the Indenture, which we call a “legal defeasance.” If we decide to make a legal defeasance, however, we may not terminate our obligations:
If we exercise our legal defeasance option, any subsidiary guarantee will terminate with respect to that series of debt securities.
At any time we may also effect a “covenant defeasance,” which means we have elected to terminate our obligations under:
We may exercise our legal defeasance option notwithstanding our prior exercise of our covenant defeasance option. If we exercise our legal defeasance option, payment of the affected series of debt securities may not be accelerated because of an Event of Default with respect to that series. If we exercise our covenant defeasance option, payment of the affected series of debt securities may not be accelerated because of an Event of Default specified in the fourth, fifth (with respect only to a Subsidiary Guarantor) or sixth bullet points under “—Events of Default” above or an Event of Default that is added specifically for such series and described in a prospectus supplement.
In order to exercise either defeasance option, we must:
Book Entry, Delivery and Form. We may issue debt securities of a series in the form of one or more global certificates deposited with a depositary. We expect that The Depository Trust Company, New York, New York, or “DTC,” will act as depositary. If we issue debt securities of a series in book-entry form, we will issue one or more global certificates that will be deposited with or on behalf of DTC and will not issue physical certificates to each holder. A global security may not be transferred unless it is exchanged in whole or in part for a certificated security, except that DTC, its nominees and their successors may transfer a global security as a whole to one another.
DTC will keep a computerized record of its participants, such as a broker, whose clients have purchased the debt securities. The participants will then keep records of their clients who purchased the debt securities. Beneficial interests in global securities will be shown on, and transfers of beneficial interests in global securities will be made only through, records maintained by DTC and its participants.
DTC advises us that it is:
DTC is owned by a number of its participants and by the New York Stock Exchange, Inc., The American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. The rules that apply to DTC and its participants are on file with the SEC.
DTC holds securities that its participants deposit with DTC. DTC also records the settlement among participants of securities transactions, such as transfers and pledges, in deposited securities through computerized records for participants’ accounts. This eliminates the need to exchange certificates. Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations.
We will wire principal, premium, if any, and interest payments due on the global securities to DTC’s nominee. We, the Trustee and any paying agent will treat DTC’s nominee as the owner of the global securities for all purposes. Accordingly, we, the Trustee and any paying agent will have no direct responsibility or liability to pay amounts due on the global securities to owners of beneficial interests in the global securities.
It is DTC’s current practice, upon receipt of any payment of principal, premium, if any, or interest, to credit participants’ accounts on the payment date according to their respective holdings of beneficial interests in the global securities as shown on DTC’s records. In addition, it is DTC’s current practice to assign any consenting or voting rights to participants, whose accounts are credited with debt securities on a record date, by using an omnibus proxy.
Payments by participants to owners of beneficial interests in the global securities, as well as voting by participants, will be governed by the customary practices between the participants and the owners of beneficial interests, as is the case with debt securities held for the account of customers registered in “street name.” Payments to holders of beneficial interests are the responsibility of the participants and not of DTC, the Trustee or us.
Beneficial interests in global securities will be exchangeable for certificated securities with the same terms in authorized denominations only if:
The Trustee. The Bank of New York will be the Trustee under the Indenture. The Bank of New York also serves as trustee for our 7.875% Senior Notes due 2004, our 8.375% Senior Notes due 2008, our 8.125% Senior Notes due 2011, our 8.5% Senior Notes due 2012, our 9% Senior Notes due 2012, our 7.5% Senior Notes due 2013 and our 7.75% Senior Notes due 2015. We may also maintain banking and other commercial relationships with the Trustee and its affiliates in the ordinary course of business, and the Trustee may own our debt securities.
Governing Law. The Indenture and the debt securities will be governed by, and construed in accordance with, the laws of the State of New York.
Set forth below is a description
Authorized Capital Stock
Our authorized capital stock, consistsdivided into two classes consisting of 350,000,000(a) 450 million shares of common stock, par value $.01 per share,Common Stock and 10,000,000(b) 45 million shares of preferred stock, par value $.01$0.01 per share of which 250,000 shares are designated as Series A Junior Participating Preferred Stock, 2,998,000 shares are designated 6.75% Cumulative Convertible Preferred Stock and 4,600,000 shares are designated as 6.00% Cumulative Convertible Preferred Stock.
(the “Preferred Stock”).
Holders
Holders of our common stock have no preemptive rights and have no rights to convert their common stock into any other securities. Allat least a majority of the outstanding stock of the Company entitled to vote thereon, also have the power to make, repeal, alter, amend and rescind, in whole or in part, the Bylaws. Section 5.8, Section 5.9 and Article VII of the Bylaws of may not be amended by the Board or by a Shareholder Adopted Bylaw without the approval of 60% of the voting power of the Company’s then outstanding Common Stock entitled to vote at an election of directors.
privileges typically associated with such securities as set forth in the Oklahoma General Corporation Act (the “OGCA”) in relation to rights upon liquidation.
We have 2,152,000 shares of authorized preferred stock which are undesignated. Currently 2,998,000 shares
Our board of directors has the authority, without further shareholder approval, to issue shares of preferred stock from time to timemay be issued in one or more series from time to time, with each such series to consist of such number of shares and to have such voting powers, full or withoutlimited, or no voting powers, and with such designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, as shall be set forthstated in the resolution or resolutions providing thereof.
While providing desirable flexibility for possible acquisitions and other corporate purposes, and eliminating delays associated with a shareholder vote on specific issuances, the issuance of preferred stock could adversely affectsuch series adopted by the voting powerBoard and included in a certificate of holdersdesignations (hereinafter referred to as the “Certificate of common stock, as well as dividend and liquidation payments on both common and preferred stock. It also could haveDesignation”) filed pursuant to the effectOGCA.
The prospectus supplement relating to an offering of preferred stock will specify the termsholders of any series of preferred stock offered by it including:
The description of thegeneral terms of the preferred stockWarrants and the Warrant Agreements, does not purport to be set forth in an applicable prospectus supplement will not be complete and will beis subject to, and qualified in its entirety by reference to, the statementfull text of resolution relatingthe Warrant Agreements, which are filed as Exhibits 4.2, 4.3 and 4.4 respectively, to the applicable series of preferred stock. The registration statement of which this prospectus formsis a part and which are incorporated by reference herein.
Outstanding Cumulative Convertible Preferred Stock
General. We have two series of Convertible Preferred Stock outstanding, both with substantially similar terms: the 6.75% Cumulative Convertible Preferred Stock and the 6.00% Cumulative Convertible Preferred Stock. Where the termsexercise of the two series of preferred stock are similar, we refer to both series of outstanding preferred stock as the “Convertible Preferred Stock.”
Ranking. Both series of Convertible Preferred Stock, with respect to dividend rights or rights upon the liquidation, winding-up or dissolution, rank:
While any shares of either series of our Convertible Preferred Stock are outstanding, we may not authorize, increase the authorized amount of, or issue any sharesWarrants. In lieu of any class or series of Senior Stock (or any security convertible into Senior Stock) without the affirmative vote or consent of the holders of at least 66 2/3% of the outstanding shares each series of Convertible Preferred Stock voting separately as a class. Without the consent of any holder of Convertible Preferred Stock, however, we may authorize, increase the authorized amount of, or issue any shares of, any class or series of Parity Stock or Junior Stock. See “—Voting Rights” below.
Dividends. Holders of shares of 6.75% Cumulative Convertible Preferred Stock are entitled to receive, when, as and if declared by our board of directors out of funds legally available for payment, cumulative cash dividends at the rate per annum of 6.75% perfractional share on the liquidation preference thereof of $50 per share of
Convertible Preferred Stock (equivalent to $3.375 per annum per share). Dividends on the 6.75% Cumulative Convertible Preferred Stock are payable quarterly on February 15, May 15, August 15 and November 15 of each year at such annual rate, and accumulate from the most recent date as to which dividends have been paid or, if no dividends have been paid, from the Issue Date ofholder would otherwise be entitled, the 6.75% Cumulative Convertible Preferred Stock, whether or not in any dividend period or periods there have been funds legally available for the payment of such dividends.
Holders of shares of 6.00% Cumulative Convertible Preferred Stockholder will be entitled to receive when, as and if declared by the Board of Directors out of funds legally available fora cash payment cumulative cash dividends at the rate per annum of 6.00% per share on the liquidation preference thereof of $50 per share of 6.00% Cumulative Convertible Preferred Stock (equivalent to $3.00 per annum per share). Dividends on the 6.00% Cumulative Convertible Preferred Stock will be payable quarterly on March 15, June 15, September 15 and December 15 of each year at such annual rate, and shall accumulate from the most recent date as to which dividends shall have been paid or, if no dividends have been paid, from the Issue Date of the 6.00% Cumulative Convertible Preferred Stock, whether or not in any dividend period or periods there shall be funds legally available for the payment of such dividends.
Accumulations of dividends on shares of Convertible Preferred Stock do not bear interest. Dividends payable on the Convertible Preferred Stock for any period less than a full dividend period (based upon the number of days elapsed during the period) are computed on the basis of a 360-day year consisting of twelve 30-day months.
No dividends or other distributions (other than a dividend or distribution payable solely in shares of Parity Stock or Junior Stock (in the case of Parity Stock) or Junior Stock (in the case of Junior Stock) and cash in lieu of fractional shares) may be declared, made or paid, or set apart for payment upon, any Parity Stock or Junior Stock, nor may any Parity Stock or Junior Stock be redeemed, purchased or otherwise acquired for any consideration (or any money paid to or made available for a sinking fund for the redemption of any Parity Stock or Junior Stock) by us or on our behalf (except by conversion into or exchange for shares of Parity Stock or Junior Stock (in the case of Parity Stock) or Junior Stock (in the case of Junior Stock)) unless all accumulated and unpaid dividends have been or contemporaneously are declared and paid, or are declared and a sum sufficient for the payment thereof is set apart for such payment, on the Convertible Preferred Stock and any Parity Stock for all dividend payment periods terminating on or priordetermined according to the date of such declaration, payment, redemption, purchase or acquisition. Notwithstanding the foregoing, if full dividends have not been paid on the Convertible Preferred Stock and any Parity Stock, dividends may be declared and paid on the Convertible Preferred Stock and such Parity Stock so long as the dividends are declared and paid pro rata so that the amounts of dividends declared per share on the Convertible Preferred Stock and such Parity Stock will in all cases bear to each other the same ratio that accumulated and unpaid dividends per share on the shares of the Convertible Preferred Stock and such Parity Stock bear to each other. Holders of shares of the Convertible Preferred Stock are not entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends.
Our ability to declare and pay cash dividends and make other distributions with respect to our capital stock, including the Convertible Preferred Stock, is limited by the terms of our outstanding indebtedness. In addition, our ability to declare and pay dividends may be limited by applicable Oklahoma law.
Liquidation Preference. In the event of our voluntary or involuntary liquidation, winding-up or dissolution, each holder of Convertible Preferred Stock will be entitled to receive and to be paid out of our assets available for distribution to our stockholders, before any payment or distribution is made to holders of Junior Stock (including common stock), a liquidation preferenceformula set forth in the amountWarrant.
Voting Rights. The holders of the Convertible Preferred Stock have no voting rights except as set forth below or as otherwise required by Oklahoma law.
If dividends on a series of Convertible Preferred Stock are in arrears and unpaid for six or more quarterly periods (whether or not consecutive), the holders of the Convertible Preferred Stock, voting as a single class with any other preferred stock or preference securities having similar voting rights that are exercisable, will be entitled at our next regular or special meeting of stockholders to elect two additional directors to our board of directors unless our board is comprised of fewer than six directors at such time, in which case such holders will be entitled to elect one additional director. Upon the election of any additional directors, the number of directors that compose our board shall be increased by such number of additional directors. Such voting rights and the terms of the directors so elected will continue until such time as the dividend arrearage on the Convertible Preferred Stock has been paid in full.
In addition, the affirmative vote or consent of the holders of at least 66 2/3% of each series of outstanding Convertible Preferred Stock, voting separately as a class, is required for the issuance of any class or series of Senior Stock (or any security convertible into Senior Stock) and for amendments to our certificate of incorporation that would affect adversely the rights of holders of that series of Convertible Preferred Stock. The certificates of designation provide that the authorization of, the increase in the authorized amount of, or the issuance of any shares of any class or series of Parity Stock or Junior Stock does not require the consent of the holders of the Convertible Preferred Stock, and is not deemed to affect adversely the rights of the holders of the Convertible Preferred Stock.
In all cases in which the holders of Convertible Preferred Stock are entitled to vote, each share of Convertible Preferred Stock shall be entitled to one vote.
Conversion Rights. Each share of 6.75% Cumulative Convertible Preferred Stock is convertible at any time at the option of the holder thereof into 6.4935 shares of common stock (which was calculated using an initial conversion price of $7.70 per share of common stock) subject to adjustment for certain dilutive events (we refer to such price or adjusted price applicable to a particular series of Convertible Preferred Stock as the “Conversion Price”). Each share of 6.00% Cumulative Convertible Preferred Stock is convertible at any time at the option of the holder thereof into 4.8605 shares of common stock (which is calculated using an initial conversion price of $10.287 per share of common stock) subject to adjustment for certain dilutive events.
Mandatory Conversion. At any time on or after November 20, 2004 (with respect to the 6.75% Cumulative Convertible Preferred Stock) or any time on or after March 20, 2006 (with respect to the 6.00% Cumulative Convertible Preferred Stock), we may at our option cause the Convertible Preferred Stock to be automatically converted into that number of shares of common stock for each share of Convertible Preferred Stock equal to $50.00 (the liquidation preference per share of Convertible Preferred Stock) divided by the then prevailing Conversion Price. We may exercise this right only if the closing price of our common stock equals or exceeds 130% of the then prevailing Conversion Price for at least 20 trading days in any consecutive 30-day trading period, including the last trading day of such 30-day period, ending on the trading day prior to our issuance of a press release announcing the mandatory conversion as described below.
We may not authorize, issue a press release or give notice of any mandatory conversion unless, prior to giving the conversion notice, all accumulated and unpaid dividends on such series of Convertible PreferredCommon Stock for periods ended prior to the date of such conversion notice shall have been paid in cash.
In addition to the mandatory conversion provision described above, if there are less than 250,000 shares ofwhich a series of Convertible Preferred Stock outstanding, we may, at any time on or after November 20, 2006 (with respect to the 6.75% Cumulative Convertible Preferred Stock) or any time on or after March 20, 2008 (with respect to the 6.00% Cumulative Convertible Preferred Stock), at our option, cause such series of Convertible Preferred Stock to be automatically converted into that number of shares of common stock equal to $50.00 (the liquidation preference per share of Convertible Preferred Stock) divided by the lesser of the then prevailing Conversion Price
warrant is exercisable, and the Market Value for the five trading day period ending on the second trading day immediately prior to the date set for conversion.
The term “Market Value” means the average closingexercise price, of the common stock for a five consecutive trading day period on the New York Stock Exchange (or such other national securities exchange or automated quotation system on which the common stock is then listed or authorized for quotation or, if not so listed or authorized for quotation, an amount determined in good faith by our board of directors to be the fair value of the common stock).
Change of Control. Except as provided below, upon a Change of Control (as defined below), holders of each series of Convertible Preferred Stock shall, in the event that the Market Value at such time is less than the Conversion Price applicable to such series, have a one-time option to convert all of their outstanding shares of Convertible Preferred Stock into shares of common stock at an adjusted Conversion Price equal to the greater of (i) the Market Value as of the Change of Control Date and (ii) $4.0733 (with respect to the 6.75% Cumulative Convertible Preferred Stock) and $5.47 (with respect to the 6.00% Cumulative Convertible Preferred Stock). This option shall be exercisable during a period of not less than 30 days nor more than 60 days commencing on the third business day after notice of the Change of Control is given by us in the manner specified in the certificates of designation. In lieu of issuing the shares of common stock issuable upon conversion in the event of a Change of Control, we may, at our option, make a cash payment equal to the Market Value for each share of such common stock otherwise issuable determined for the period ending on the Change of Control Date. Notwithstanding the foregoing, upon a Change of Control in which (x) each holder of our common stock receives consideration consisting solely of common stock of the successor, acquiror or other third party (and cash paid in lieu of fractional shares) that is listed on a national securities exchange or quoted on the NASDAQ National Market and (y) all our common stock has been exchanged for, converted into or acquired for common stock of the successor, acquiror or other third party (and cash in lieu of fractional shares), and the Convertible Preferred Stock becomes convertible solely into such common stock, the Conversion Price will not be adjusted as described in this paragraph.
The certificates of designation define “Change of Control” as any of the following events:
of our directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of our board of directors then in office.
For purposes of the definition of “Change of Control,” the term “Permitted Holders” means Aubrey K. McClendon and Tom L. Ward and their respective Affiliates.
The phrase “all or substantially all” of the assets of our company is likely to be interpreted by reference to applicable state law at the relevant time, and will be dependent on the facts and circumstances existing at such time. As a result, there may be a degree of uncertainty in ascertaining whether a sale or transfer is of “all or substantially all” of our assets.
Anti-Takeover Provisions
Our certificate of incorporation and bylaws and the Oklahoma General Corporation Act include a number of provisions which may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include a classified board of directors, authorized blank check preferred stock, restrictions on business combinations and the availability of authorized but unissued common stock.
Classified Board of Directors. Our certificate of incorporation and bylaws contain provisions for a staggered board of directors with only one-third of the board standing for election each year. Directors can only be removed for cause. A staggered board makes it more difficult for shareholders to change the majority of the directors.
Oklahoma Business Combination Statute. Section 1090.3 of the Oklahoma General Corporation Act prevents an “interested shareholder” from engaging in a “business combination” with an Oklahoma corporation for three years following the date the person became an interested shareholder, unless:
The statute defines a “business combination” to include:
For purposes of Section 1090.3, the term “corporation” also includes the corporation’s majority-owned subsidiaries.
In addition, Section 1090.3 defines an “interested shareholder,” generally, as any person that owns stock having 15% or more of all voting power of the corporation, any person that is an affiliate or associate of the corporation and owned stock having 15% or more of all voting power of the corporation at any time within the three-year period prior to the time of determination of interested shareholder status, and any affiliate or associate of such person.
Stock Purchase Provisions. Our certificate of incorporation includes a provision which requires the affirmative vote of two-thirds of the votes cast by the holders, voting together as a single class, of all then outstanding shares of capital stock, excluding the votes by an interested shareholder, to approve the purchase of any of our capital stock from the interested shareholder at a price in excess of fair market value, unless the purchase is either (1) made on the same terms offered to all holders of the same securities or (2) made on the open market and not the result of a privately negotiated transaction.
Share Rights Plan
The Rights. On July 7, 1998, our board of directors declared a dividend distribution of one preferred stock purchase right for each outstanding share of common stock. The distribution was paid on July 27, 1998 to the shareholders of record on that date. Each right entitles the registered holder to purchase from us one one-thousandth of a share of Series A Preferred Stock at a price of $25.00, subject to adjustment.
The following is a summary of these rights. The full description and terms of the rights are set forth in a rights agreement with UMB Bank, N.A., as rights agent. Copies of the rights agreement and the certificate of designation for the Series A Preferred Stock are available free of charge. This summary description of the rights and the Series A Preferred Stock does not purport to be complete and is qualified in its entirety by reference to all the provisions of the rights agreement and the certificate of designation for the Series A Preferred Stock.
Initially, the rights attached to all certificates representing shares of our outstanding common stock, and no separate rights certificates were distributed. The rights will separate from our common stock and the distribution date will occur upon the earlier of:
The earlier of these dates is called the distribution date.
The term “acquiring person” means any person who or which, together with all of its affiliates and associates, is the beneficial owner of 15% or more of our outstanding common stock, but does not include:
The rights agreement provides that, until the distribution date, the rights will be transferred with and only with the common stock. Until the distribution date (or earlier redemption or expiration of the rights), new common stock certificates issued after July 27, 1998, upon transfer or new issuance of common stock, will contain a notation incorporating the rights agreement by reference. Until the distribution date or earlier redemption or expiration of the rights, the surrender for transfer of any certificate for common stock, outstanding as of July 27, 1998, even without a notation or a copy of a summary of the rights being attached, will also constitute the transfer of the rights associated with the common stock represented by the certificate. As soon as practicable following the distribution date, separate certificates evidencing the rights will be mailed to holders of record of the common stock as of the close of business on the distribution date and these separate rights certificates alone will evidence the rights.
The rights are not exercisable until the distribution date. The rights will expire on July 27, 2008.
The purchase price payable, and the number of one one-thousandths of a share of Series A Preferred Stock or other securities or property issuable, upon exercise of the rights are subject to adjustment from time to time upon the occurrence of events, including (1) stock splits, reverse stock splits or stock dividends to prevent dilution:
The number of outstanding rights and the number of one one-thousandths of a share of Series A Preferred Stock issuablereceive our common stock upon exercise of each right are also subject to adjustment in the event of a stock split of the common stock or a stock dividend on the common stock payable in the common stock or subdivisions, consolidations or combinations of the common stock occurring, in any such case, prior to the distribution date.
In the event that following the date of public announcement that a person has become an acquiring person, we are acquired in a merger or other business combination transaction or more than 50% of our consolidated assets or earning power is sold, proper provision willWarrants shall be made so that each holder of a right will thereafter have the right to receive, upon the exercise of the right at the then current exercise price of the right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the right (the “flip-over right”).
In the event that a person, other than an exempt person, becomes an acquiring person, proper provision will be made so that each holder of a right, other than the acquiring person and its affiliates and associates, will thereafter have the right to receive upon exercise that number of shares of common stock, or, if applicable, cash, other equity securities or property of us, having a market value equal to two times the purchase price of the rights (the “flip-in right”). Any rights that are or were at any time owned by an acquiring person will then become void.
With certain exceptions, no adjustment in the purchase price will be required until cumulative adjustments require an adjustment of at least 1% in the purchase price. Upon exercise of the rights, no fractional shares of Series A Preferred Stock will be issued other than fractions which are integral multiples of one one-hundredth of a share of Series A Preferred Stock. Cash will be paid in lieu of fractional shares of Series A Preferred Stock that are not integral multiples of one one-hundredth of a share of Series A Preferred Stock.
At any time prior to the earlier to occur of (1) 5:00 p.m., Oklahoma City, Oklahoma time on the tenth day after the stock acquisition date or (2) the expiration of the rights, we may redeem the rights in whole, but not in part, at a price of $0.01 per right; provided, that (a) if the board of directors authorizes redemption on or after the time a person becomes an acquiring person, then the authorization must be by board approval and (b) the period for redemption may, upon board approval, be extended by amending the rights agreement. Board approval means the approval of a majority of our directors. Immediately upon any redemption of the rights described in this paragraph,converted into the right to exercise the rights will terminateWarrants to acquire the kind and amount of securities, cash or other assets that the only rightholder would have owned immediately after the Fundamental Equity Change if the holder had exercised the Warrants immediately before the effective date of the Fundamental Equity Change or reclassification.
Our boardRegistration Rights Agreement, we have agreed to use commercially reasonable efforts to keep the registration statement of directors may amendwhich this prospectus is a part continuously effective and in compliance with the termsSecurities Act of the rights without the consent of the holders of the rights at any time and from time to time provided that any amendment does not adversely affect the interests of the holders of the rights. In addition, during any time that the rights are1933 until, subject to redemption,certain exceptions, earliest to occur of: (i) the termsdate on which such securities have been disposed of pursuant to an effective registration statement under the Securities Act of 1933 or Rule 144; (ii) the date on which securities are sold in a private transaction in which the transferor’s rights may be amended byunder the approval of a majority of the directors, including an amendment that adversely affects the interests of the holders of the rights, without the consent of the holders of rights.
Until a right is exercised, a holder will have no rights as a shareholder, including, without limitation, the right to vote or to receive dividends. While the distribution of the rights willRegistration Rights Agreement are not be taxable to us or our shareholders, shareholders may, depending upon the circumstances, recognize taxable income in the event that the rights become exercisable for Series A Preferred Stock, or other consideration.
The Series A Preferred Stock. Each one-thousandth of a share of the Series A Preferred Stock (a “preferred share fraction”) that may be acquired upon exercise of the rights will be nonredeemable and junior to any other shares of preferred stock that we may issue.
Each preferred share fraction will have a minimum preferential quarterly dividend rate of $0.01 per preferred share fraction but will, in any event, be entitled to a dividend equal to the per share dividend declared on the common stock.
In the event of liquidation,assigned; (iii) the holder of a preferred share fraction will receive a preferred liquidation payment equal to the greater of $0.01 per preferred share fraction or the per share amount paid in respect of a share of common stock.
Each preferred share fraction will have one vote, votingsuch registrable securities, together with the common stock. The holdersall related persons of preferred share fractions, voting as a separate class, will be entitled to elect two directors if dividends on the Series A Preferred Stock are in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which shares of common stock are exchanged, each preferred share fraction will be entitled to receive the per share amount paid in respect of each share of common stock.
The rights of holders of the Series A Preferred Stock to dividends, liquidation and voting, and in the event of mergers and consolidations, are protected by customary antidilution provisions.
Because of the nature of the Series A Preferred Stock’s dividend, liquidation and voting rights, the economic value ofsuch holder, collectively owns less than one preferred share fraction that may be acquired upon the exercise of each right should approximate the economic value of one share of our common stock.
Shareholder Action
Except as otherwise provided by law or in our certificate of incorporation or bylaws, the approval by holders of a majority of the shares of common stock present in person or represented by proxy at a meeting and entitled to vote is sufficient to authorize, affirm, ratify or consent to a matter voted on by shareholders. Our bylaws provide that all questions submitted to shareholders will be decided by a plurality of the votes cast, unless otherwise required by law, our certificate of incorporation, stock exchange requirements or any certificate of designation. The Oklahoma General Corporation Act requires the approval of the holders of a majority of the outstanding stock entitled to vote for certain extraordinary corporate transactions, such as a merger, sale of substantially all assets, dissolution or amendment of the certificate of incorporation. Our certificate of incorporation provides for a vote of the holders of two-thirds of the issued and outstanding stock having voting power, voting as a single class, to amend, repeal or adopt any provision inconsistent with the provisions of the certificate of incorporation limiting director liability and stock purchases by us, and providing for staggered terms of directors and indemnity for directors. The same vote is also required for shareholders to amend, repeal or adopt any provision of our bylaws.
Under Oklahoma law, shareholders may take actions without the holding of a meeting by written consent or consents signed by the holders of a sufficient number of shares to approve the transaction had allpercent (1%) of the outstanding shares of our capital stock entitled to vote thereon been present atCommon Stock on a meeting. If shareholder action is taken by written consent, the rulesfully diluted basis, and regulations of the SEC require us to send each shareholder entitled to vote on the matter, but whose consent was not solicited, an information statement containing information substantially similar to that which would have been containedall such holder’s and such holder’s related persons’ registrable securities can be sold in a proxy statement.
Transfer Agentsingle day without registration or any volume, notice, manner of sale, legend or other restriction pursuant to, and Registrar
UMB Bank, N.A. isin accordance with, Rule 144; and (iv) the transfer agent and registrar for our common stock, our 6.75% Cumulative Convertible Preferred Stock and our 6.00% Cumulative Convertible Preferred Stock.
date on which such securities cease to be outstanding.
General
We have summarized selected provisionsdeposit agreement, each owner of a depositary agreement and the related depositary receipts. The summary is not complete. The forms of the deposit agreement and the depositary receipts relating to any particular issue of depositary sharesreceipt will be filed withentitled, in proportion to the SEC onfraction of a Current Report on Form 8-K prior to our offering of the depositary shares, and you should read such documents for provisions that may be important to you.
Dividends and Other Distributions
If we pay a cash distribution or dividend on a seriesshare of preferred stock represented by the related depositary shares,share, to all the Bank Depositaryrights, preferences and privileges of, and will distribute such dividendsbe subject to the record holders of such depositary shares. If the distributions are in property other than cash, the Bank Depositary will distribute the property to the record holdersall of the depositary shares. If the Bank Depositary, however, determines that it is not feasible to make the distribution of property, the Bank Depositary may, with our approval, sell such propertylimitations and distribute the net proceeds from such sale to the record holders of the depositary shares.
Redemption of Depositary Shares
If we redeem a series of preferred stock represented by depositary shares, the Bank Depositary will redeem the depositary shares from the proceeds received by the Bank Depositary in connection with the redemption. The redemption price per depositary share will equal the applicable fraction of the redemption price per share of the preferred stock. If fewer than all the depositary shares are redeemed, the depositary shares to be redeemed will be selected by lot or pro rata as the Bank Depositary may determine.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders ofrestrictions on, the preferred stock represented by depositary shares are entitled to vote, the Bank Depositary will mail the notice to the record holders of the depositary shares relatingreceipt (including, if applicable, dividend, voting, conversion, exchange redemption and liquidation rights).
Amendment and Termination of the Depositary Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the depositary agreement may be amended by agreement between the Bank Depositary and us. However, any amendment that materially and adversely alters the rights of the holders of depositary shares will not be effective unless such amendment has been approved by the holders of at leastissued under a majority of the depositary shares then outstanding. The depositary agreement may be terminated by the Bank Depositary or us only if (i) all outstanding depositary shares have been redeemed or (ii) there has been a final distribution in respect of the preferred stock in connection with any
liquidation, dissolution or winding up of our company and such distribution has been distributed to the holders of depositary receipts.
Charges of Bank Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will pay charges of the Bank Depositary in connection with the initial deposit of the preferred stock and any redemption of the preferred stock. Holders of depositary receipts will pay other transfer and other taxes and governmental charges and any other charges, including a fee for the withdrawal of shares of preferred stock upon surrender of depositary receipts, as are expressly provided in the depositaryseparate warrant agreement to be for their accounts.
Withdrawal of Preferred Stock
Upon surrender of depositary receipts at the principal office of the Bank Depositary, subject to the terms of the depositary agreement, the owner of the depositary shares may demand delivery of the number of whole shares of preferred stockentered into between us and all money and other property, if any, represented by those depositary shares. Partial shares of preferred stock will not be issued. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the number of depositary shares representing the number of whole shares of preferred stock to be withdrawn, the Bank Depositary will deliver to such holder at the same time a new depositary receipt evidencing the excess number of depositary shares. Holders of preferred stock thus withdrawn may not thereafter deposit those shares under the depositary agreement or receive depositary receipts evidencing depositary shares therefor.
Resignation and Removal of Bank Depositary
The Bank Depositary may resign at any time by delivering to us notice of its election to do so, and we may at any time remove the Bank Depositary. Any such resignation or removal will take effect upon the appointment of a successor Bank Depositary and its acceptance of such appointment. Such successor Bank Depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company, meeting the requirements of the depositary agreement.
Any of the securities being offered hereby may be sold in any one or more of the following ways from time to time:
The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices.
Offers to purchase securities may be solicited by agents designated by us from time to time. Any suchas warrant agent, involved in the offer or sale of the securities in respect of which this prospectus is delivered will be named, and any commissions payable by us to such agent will be set forth, in the applicable prospectus supplement. Unless otherwise indicated in such prospectus supplement, any such agent will be acting on a reasonable best efforts basis for the period of its appointment. Any such agent may be deemed to be an underwriter,all as that term is defined in the Securities Act, of the securities so offered and sold. We may periodically engage agents or underwriters in connection with at-the-market offerings or negotiated transactions involving our common stock.
If securities are sold by means of an underwritten offering, we will execute an underwriting agreement with an underwriter or underwriters at the time an agreement for such sale is reached, and the names of the specific managing underwriter or underwriters, as well as any other underwriters, the respective amounts underwritten and the terms of the transaction, including commissions, discounts and any other compensation of the underwriters and dealers, if any, will be set forth in the applicable prospectus supplement which will be used by the underwriters to make resales of the securities in respect of which this prospectus is being delivered to the public. If underwriters are utilized in the sale of any securities in respect of which this prospectus is being delivered, such securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices determined by the underwriters at the time of sale. Securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by one or more underwriters. If any underwriter or underwriters are utilized in the sale of securities, unless otherwise indicated in the applicable prospectus supplement, the underwriting agreement will provide that the obligations of the underwriters are subject to certain conditions precedent and that the underwriters with respect to a sale of such securities will be obligated to purchase all such securities if any are purchased.
We may grant to the underwriters options to purchase additional securities, to cover over-allotments, if any, at the price at which securities are first offered to the public (with additional underwriting commissions or discounts), as may be set forth in the prospectus supplement relating thereto. If we grantto the particular issue of New Warrants. The warrant agent will act solely as our agent in connection with the New Warrants and will not assume any over-allotment option,obligation or relationship of agency or trust for or with any holders of New Warrants or beneficial owners of New Warrants. The following summary of certain provisions of the New Warrants does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all provisions of the warrant agreements.
If a dealer is utilized in the sale of the securities in respect of which this prospectus is delivered, we will sell such securitiesrelating to the dealer as principal.New Warrants. The dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale. Any such dealerexercise price may be deemedsubject to adjustment upon the occurrence of events described in such prospectus supplement. After the close of business on the Expiration Date (or such later date to which we may extend such Expiration Date), unexercised New Warrants will become void. The place or places where, and the manner in which, New Warrants may be an underwriter, as such term is defined in the Securities Act, of the securities so offered and sold. The name of the dealer and their terms of the transactionexercised will be set forthspecified in the prospectus supplement relating thereto.
Offersto such New Warrants.
Securities Act with respect to any resale thereof. The terms of any such salesshare purchase contract. The share purchase contracts will be issued pursuant to documents to be issued by us. You should read the particular terms of the documents, which will be described in more detail in the applicable prospectus supplement.
If so indicated in the applicable prospectus supplement, we may authorize agentsincluding, without limitation, the following, as applicable:
Agents, underwriters and dealers may be entitled under relevant agreementsconnection with us to indemnification by us against certain liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which such agents, underwriters and dealers may be required to make in respect thereof.
Each series of securitiesoffered hereby will be a new issue and, other than our common stock, which is listed on The New York Stock Exchange, will have no established trading market. We may elect to list any series of securities on an exchange, and in the case of common stock, on any additional exchange, but, unless otherwise specified in the applicable prospectus supplement, we shall not be obligated to do so. No assurance can be given as to the liquidity of the trading market for any of the securities.
Agents, underwriters and dealers may be customers of, engage in transactions with, or perform services for, us and our subsidiaries in the ordinary course of business.
The validity of the debt securities, guarantees and depositary shares offered by this prospectus have been passed upon for us by VinsonKirkland & Elkins L.L.P. Ellis LLP, Houston, Texas.
Shannon T. Self, a shareholder in Commercial Law Group, P.C., is a director of Chesapeake, and he owns 104,992 shares of our common stock.
The consolidated financial statements of Chesapeake Energy Corporation, incorporated in this prospectusProspectus by reference to the amended annual reportChesapeake Energy Corporation’s Annual Report on Form 10-K/A of Chesapeake Energy Corporation10-K for the year ended December 31, 2002,2020 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to the Company's emergence from bankruptcy on February 9, 2021 as described in Note 2 to the financial statements) of PricewaterhouseCoopers LLP, an independent accountants,registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
its reports.
INFORMATION NOT REQUIRED IN PROSPECTUS
The
Securities and Exchange Commission registration fee | $ | 29,027 | |
Legal fees and expenses | 40,000 | ||
Accounting fees and expenses | 10,000 | ||
Printing expenses | 5,000 | ||
Miscellaneous | 4,000 | ||
TOTAL | $ | 88,027 | |
estimates.
| | | Amount | | |||
SEC registration fee | | | | $ | 378,246.34 | | |
Printing and engraving expenses | | | | | * | | |
Fees and expenses of legal counsel | | | | | * | | |
Accounting fees and expenses | | | | | * | | |
Transfer agent and registrar fees | | | | | * | | |
Miscellaneous | | | | | * | | |
Total | | | | $ | * | | |
The Oklahoma General Corporation Act provides for indemnification of each of Chesapeake’sincluding officers and directors, against (a)who are, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer or director of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses including(including attorneys’ fees,fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by themsuch person in connection with anysuch action, suit or proceeding, brought by reason ofprovided such person beingofficer or having been a director officer, employee or agent of Chesapeake, or of any other corporation, partnership, joint venture, trust or other enterprise at the request of Chesapeake, other than an action by or in the right of Chesapeake. To be entitled to indemnification, the individual must have acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interest of Chesapeake,interests and, with respect to anyfor criminal action, the person seeking indemnificationproceedings, had no reasonable cause to believe that thehis conduct was unlawfulillegal. An Oklahoma corporation may indemnify officers and (b) expenses, including attorneys’ fees, actually and reasonably incurreddirectors in connection with the defense or settlement of anyan action or suit by or in the right of Chesapeake brought by reason of the person seeking indemnification being or having been a director, officer, employee or agent of Chesapeake, or any other corporation partnership, joint venture, trust or other enterprise atunder the request of Chesapeake, provided the actions were in good faith and were reasonably believed to be in or not opposed to the best interest of Chesapeake,same conditions, except that no indemnification shallis permitted without judicial approval if the officer or director is adjudged to be madeliable to the corporation. Where an officer or director is successful on the merits or otherwise in respectthe defense of any claim, issue or matter asaction referred to whichabove, the individual shall have been adjudged liable to Chesapeake, unless and only tocorporation must indemnify him against the extent that the court inexpenses (including attorneys’ fees) which such action was decided has determined that the person is fairlyofficer or director actually and reasonably entitled to indemnity for such expenses which the court deems proper. Article VIII of Chesapeake’s incurred.
Chesapeake has entered into indemnity agreements with each of its directors and executive officers. Under each indemnity agreement, Chesapeake will pay on behalfBylaws of the indemnitee any amount which he is or becomes legally obligatedCompany
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serving at the Company’s request of Chesapeake as a director officer, employee or agentofficer of another corporation, partnership, joint venture, trust or other enterprise. The paymentsCertificate of Incorporation and the Bylaws further provide for the payment of expenses to each of its officers and directors.
The indemnification agreements require the Company to (a) indemnify these individuals to the fullest extent permitted under Oklahoma law against liabilities that may arise by reason of their service to the Company and (b) advance expenses reasonably incurred as a result of any proceeding against them as to which they could be indemnified. Each indemnity agreement is in substantially the form included as Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on February 9, 2021. The description of the indemnification agreements is qualified in its entirety by reference to the full text of the form of indemnity agreement, which is incorporated herein by reference.
The following exhibits are filed herewith pursuant to the requirements of Item 601 of Regulation S-K:
| Exhibit Number | | | Description | | |
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1.1 | | Form of Underwriting | | |||
2.1 | | Fifth Amended Joint Plan of | | |||
4.1 | | | ||||
| 4.2 | | | | ||
4.3 | | | | |||
| 4.4 | | | | ||
| 4.5 | | | Form of | | |
4.6 | | | Form of Indenture for Subordinated Debt | | ||
4.7 | | | Form of | | ||
4.8 | | | Form of | | ||
| 5.1 | | | | ||
22.1 | | List of | | |||
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23.1 | | | ||||
| 23.2 | | | | ||
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24.1 | | |||||
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Each
(1) To
and
statement;
(2) That,
(3) Tothereof;
That,offering;
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| | | | By: | | | /s/ Michael Wichterich | |
| | | | Name: | | | Michael Wichterich | |
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| | Chairman of the Board and Interim Chief Executive Officer | |
KNOW ALL MEN BY THESE PRESENTS, that each individual
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Title | |
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/s/
Michael Wichterich | | | Chairman of the Board and Interim Chief Executive Officer (Principal Executive Officer) | ||
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/s/
Domenic J. Dell’Osso | | ||||
| Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||
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/s/
William M. Buergler | | | Senior (Principal Accounting Officer) | ||
| /s/ Timothy S. Duncan Timothy S. Duncan | ||||
| | Director | |||
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/s/
Benjamin C. Duster, IV | | | Director | ||
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/s/
Sarah Emerson | | | Director |
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| Signature | | | Title | |
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Matthew M. Gallagher | |
| Director | |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma City, State of Oklahoma on October 10, 2003.
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Brian Steck Brian Steck | ||
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KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Aubrey K. McClendon and Marcus C. Rowland, and each of them, either one of whom may act without joinder of the other, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all pre- and post- effective amendments to this Registration Statement (including any Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons, in the capacities and on the date indicated.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma City, State of Oklahoma on October 10, 2003.
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KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Aubrey K. McClendon and Marcus C. Rowland, and each of them, either one of whom may act without joinder of the other, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all pre- and post- effective amendments to this Registration Statement (including any Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons, in the capacities and on the date indicated.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma City, State of Oklahoma on October 10, 2003.
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KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Aubrey K. McClendon and Marcus C. Rowland, and each of them, either one of whom may act without joinder of the other, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all pre- and post- effective amendments to this Registration Statement (including any Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons, in the capacities and on the date indicated.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma City, State of Oklahoma on October 10, 2003.
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KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Aubrey K. McClendon and Marcus C. Rowland, and each of them, either one of whom may act without joinder of the other, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all pre- and post- effective amendments to this Registration Statement (including any Registration Statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933), and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and each of them, or the substitute or substitutes of any or all of them, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons, in the capacities and on the date indicated.
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