SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) APRIL 24, 1997
CHESAPEAKE ENERGY CORPORATION
(Exact name of Registrant as specified in its Charter)
OKLAHOMA 1-13726 73-1395733
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6100 NORTH WESTERN AVENUE, OKLAHOMA CITY, OKLAHOMA 73118
(Address of principal executive offices) (Zip Code)
(405) 848-8000
(Registrant's telephone number, including area code)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
On April 24, 1997, Chesapeake Energy Corporation ("Chesapeake") issued a
press release reporting third quarter and first nine months fiscal 1997
results. The April 24, 1997 press release is filed herewith as Exhibit 99 and
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits. The following exhibit is filed herewith:
99 Press Release issued by the Registrant on April 24, 1997.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHESAPEAKE ENERGY CORPORATION
By: MARCUS C. ROWLAND
Marcus C. Rowland
Vice President - Chief Financial Officer
Dated: April 28, 1997
EXHIBIT INDEX
EXHIBIT DESCRIPTION METHOD OF FILING
99 Press Release issued by the Registrant Filed herewith electronically
on April 24, 1997.
CONTACT: MARC ROWLAND, CHIEF FINANCIAL OFFICER
(405)848-8000, EXT. 232
FOR IMMEDIATE RELEASE TOM PRICE, JR.,VICE PRESIDENT-
APRIL 24, 1997 CORPORATE DEVELOPMENT
(405)848-8000, EXT. 257
CHESAPEAKE ENERGY CORPORATION REPORTS THIRD QUARTER
AND FIRST NINE MONTHS FISCAL 1997 RESULTS
OKLAHOMA CITY, OKLAHOMA, APRIL 24, 1997 -- Chesapeake Energy Corporation today
reported its financial results for the fiscal 1997 third quarter ended March
31, 1997. For the quarter, Chesapeake reported net income of $16 million, or
$0.22 per common share, on total revenue of $83 million. This is a 100%
increase over fiscal 1996's third quarter net income of $8 million, or $0.13
per common share, on total revenue of $44 million. Cash flow from operating
activities for the third quarter of fiscal 1997 increased 96% to $51 million
from $26 million in the third quarter of fiscal 1996.
For the nine months ended March 31, 1997, Chesapeake reported income before
extraordinary items of $41 million, or $0.60 per common share, on revenue of
$206 million. This is a 156% increase over net income of $16 million, or $0.28
per common share, on revenue of $100 million for the nine months ended March
31, 1996. Cash flow from operations for the current nine months increased to
$128 million from $62 million, or a 106% increase over the comparable nine
month period.
PRODUCTION VOLUMES REACH RECORD LEVELS
For the third quarter of fiscal 1997, Chesapeake's oil and natural gas
production totaled 21 billion cubic feet of natural gas equivalent (Bcfe), an
increase of 31% compared to the 16 Bcfe produced in the fiscal 1996 third
quarter. Average prices received were $2.55 per thousand cubic feet of natural
gas (Mcf) and $21.55 per barrel of oil, for a natural gas equivalent (Mcfe)
price of $2.79, compared to an Mcfe price of $1.99 in last year's third
quarter.
Production for the first nine months of fiscal 1997 totaled 57 Bcfe, an
increase of 33% compared to the 43 Bcfe produced in last year's first nine
months. Average prices received during the first nine months of fiscal 1997
were $2.31 per Mcf and $21.74 per barrel of oil, for an Mcfe price of $2.57,
compared to an Mcfe price of $1.81 in last year's first nine months.
AUSTIN CHALK ACTIVITY UPDATE
Chesapeake is currently conducting operations on twelve wells in the Louisiana
Austin Chalk Trend, eight of which are currently drilling horizontally. This
group of wells consist of the Hays 9, Vanply 21, Hecht 26, and Vanderlick 33
wells in Masters Creek, the Neil Smith 78, Zachary 98, and Schexnayder 5 in
Baton Rouge and the Weyerhauser 19 in Livingston. Additionally, the company is
drilling vertically on the Johnson 12 in Masters Creek, the Swanson 28 in Baton
Rouge, and the Vastar 1 and Temple 9 in South Brookeland.
In the Independence portion of the Giddings Field in Texas, Chesapeake's Brown
#1-H has produced 2.0 Bcfe in its first 24 days of production, and the well is
currently producing approximately 75,000 Mcfe per day. Two miles west of the
Brown, the company is currently drilling vertically at the Wackman #1-H. Seven
miles east of the Brown, Chesapeake has temporarily abandoned its Bosse #1-H
because of poor hydrocarbon shows.
In the Navasota River portion of the Giddings Field, Chesapeake is currently
utilizing seven rigs to continue developing its leasehold in this area.
OTHER ACTIVITY
In other areas, Chesapeake is drilling with four rigs in the Knox Field, four
rigs in Sholem Alechem, and one rig in each of the Arkoma Basin, Anadarko
Basin, Lovington area, and Williston Basin.
Chesapeake Energy Corporation is an independent oil and natural gas producer
headquartered in Oklahoma City which specializes in utilizing advanced seismic,
drilling and completion technologies to develop new reserves of oil and natural
gas. The company's operations are focused on exploratory and developmental
drilling in major onshore producing areas of the United States.
####
THE INFORMATION IN THIS RELEASE INCLUDES CERTAIN FORWARD-LOOKING STATEMENTS
THAT ARE BASED ON ASSUMPTIONS THAT IN THE FUTURE MAY PROVE NOT TO HAVE BEEN
ACCURATE. THOSE STATEMENTS, AND CHESAPEAKE ENERGY CORPORATION'S BUSINESS AND
PROSPECTS, ARE SUBJECT TO A NUMBER OF RISKS, INCLUDING PRODUCTION VARIANCES
FROM EXPECTATION, VOLATILITY OF OIL AND GAS PRICES, THE NEED TO DEVELOP AND
REPLACE ITS RESERVES, THE SUBSTANTIAL CAPITAL EXPENDITURES REQUIRED TO FUND ITS
OPERATIONS, ENVIRONMENTAL RISKS, DRILLING AND OPERATING RISKS, RISKS RELATED TO
EXPLORATORY AND DEVELOPMENTAL DRILLING, UNCERTAINTIES ABOUT ESTIMATES OF
RESERVES, COMPETITION, GOVERNMENT REGULATION, AND THE ABILITY OF THE COMPANY TO
IMPLEMENT ITS BUSINESS STRATEGY. THESE AND OTHER RISKS ARE DESCRIBED IN THE
COMPANY'S REPORTS THAT ARE AVAILABLE FROM THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION.
CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
($ in 000's, except per share data)
THREE MONTHS ENDED: MARCH 31, 1997 MARCH 31, 1996
------------------------------ -------------------------
$ $/MCFE $ $/MCFE
------- ------ -------- ------
REVENUES:
Oil and gas sales 57,399 2.79 30,887 1.99
Oil and gas marketing sales 22,410 1.09 11,558 0.75
Oil and gas service operations - - 1,700 0.11
Interest and other 3,277 0.16 250 0.02
------- ------ -------- ------
Total revenues 83,086 4.04 44,395 2.87
------- ------ -------- ------
EXPENSES:
Production expenses and taxes 4,308 0.21 2,136 0.14
Oil and gas marketing expenses 21,747 1.06 10,788 0.70
Oil and gas service operations - - 1,244 0.08
Depreciation, depletion, and
amortization of oil and gas properties 24,663 1.20 13,035 0.84
Depreciation and amortization of other assets 873 0.04 766 0.05
General and administrative 2,481 0.12 1,435 0.09
Interest 3,654 0.18 3,173 0.21
------- ------ -------- ------
Total expenses 57,726 2.81 32,577 2.11
------- ------ -------- ------
Income Before Income Tax and Extraordinary Item 25,360 1.23 11,818 0.76
Provision for Income Tax Expense 9,255 0.45 4,195 0.27
------- ------ -------- ------
Income Before Extraordinary Item 16,105 0.78 7,623 0.49
EXTRAORDINARY ITEM:
Loss on early extinguishment of debt,
net of applicable income tax of $101 (177) - - -
------- ------ -------- ------
NET INCOME 15,928 0.78 7,623 0.49
======= ====== ======== ======
NET EARNINGS PER COMMON SHARE AND
COMMON EQUIVALENT SHARE (PRIMARY)
INCOME BEFORE EXTRAORDINARY ITEM 0.22 - 0.13 -
EXTRAORDINARY ITEM - - - -
------- ------ -------- ------
NET INCOME 0.22 - 0.13 -
======= ====== ======== ======
NET EARNINGS PER COMMON SHARE AND
COMMON EQUIVALENT SHARE (FULLY DILUTED)
INCOME BEFORE EXTRAORDINARY ITEM 0.22 - 0.13 -
EXTRAORDINARY ITEM - - - -
------- ------ -------- ------
NET INCOME 0.22 - 0.13 -
======= ====== ======== ======
AVERAGE COMMON SHARES AND COMMON
EQUIVALENT SHARES OUTSTANDING
PRIMARY 73,493 - 58,470 -
FULLY DILUTED 73,493 - 58,642 -
======= ====== ======== ======
CASH FLOW FROM OPERATING ACTIVITIES 50,896 2.48 25,619 1.65
======= ====== ======== ======
THOUSANDS OF BARRELS OF OIL (MBBL): 801 + 134% 342
MILLIONS OF CUBIC FEET OF GAS (MMCF): 15,742 + 17% 13,462
MILLIONS OF CUBIC FEET OF GAS EQUIVALENTS 20,548 + 32% 15,514
(MMCFE):
AVERAGE PRICE/BARREL $ 21.55 + 17% $ 18.44
AVERAGE PRICE/MCF $ 2.55 + 39% $ 1.83
AVERAGE GAS EQUIVALENT PRICE/MCFE $ 2.79 + 40% $ 1.99
_______________
Income before extraordinary item plus depreciation, depletion and
amortization expense, and the provision for deferred income taxes.
NINE MONTHS ENDED: MARCH 31, 1997 MARCH 31, 1996
------------------------------- ---------------------
$ $/MCFE $ $/MCFE
-------- ------ ------- -------
REVENUES:
Oil and gas sales 147,566 2.57 77,237 1.81
Oil and gas marketing sales 52,429 0.92 15,345 0.36
Oil and gas service operations - - 5,317 0.12
Interest and other 5,793 0.10 2,041 0.05
-------- ----- ------ -------
Total revenues 205,788 3.59 99,940 2.34
-------- ----- ------ -------
EXPENSES:
Production expenses and taxes 10,182 0.18 5,839 0.14
Oil and gas marketing expenses 51,295 0.89 14,554 0.34
Oil and gas service operations - - 4,263 0.10
Depreciation, depletion, and
amortization of oil and gas properties 60,906 1.06 35,268 0.83
Depreciation and amortization of other assets 2,709 0.05 2,151 0.05
General and administrative 6,220 0.11 3,347 0.08
Interest 9,870 0.17 9,717 0.22
-------- ----- ------ -------
Total expenses 141,182 2.46 75,139 1.76
-------- ----- ------ -------
Income Before Income Tax and Extraordinary Item 64,606 1.13 24,801 0.58
Provision for Income Tax Expense 23,580 0.41 8,804 0.21
Income Before Extraordinary Item 41,026 0.72 15,997 0.37
EXTRAORDINARY ITEM:
Loss on early extinguishment of debt,
net of applicable income tax of $3,804 (6,620) (0.12) - -
-------- ----- ------ -------
NET INCOME 34,406 0.60 15,997 0.37
======== ===== ====== =======
NET EARNINGS PER COMMON SHARE AND
COMMON EQUIVALENT SHARE (PRIMARY)
INCOME BEFORE EXTRAORDINARY ITEM 0.60 - 0.28 -
EXTRAORDINARY ITEM (0.10) - - -
-------- ----- ------ -------
NET INCOME 0.50 - 0.28 -
======== ===== ====== =======
NET EARNINGS PER COMMON SHARE AND
COMMON EQUIVALENT SHARE (FULLY DILUTED)
INCOME BEFORE EXTRAORDINARY ITEM 0.60 - 0.27 -
EXTRAORDINARY ITEM (0.10) - - -
-------- ----- ------ -------
NET INCOME 0.50 - 0.27 -
======== ===== ====== =======
AVERAGE COMMON SHARES AND COMMON
EQUIVALENT SHARES OUTSTANDING
PRIMARY 68,683 - 57,984 -
FULLY DILUTED 68,680 - 58,692 -
======== ===== ====== =======
CASH FLOW FROM OPERATING ACTIVITIES 128,221 2.24 62,220 1.46
======== ===== ====== =======
THOUSANDS OF BARRELS OF OIL (MBbl): 1,917 + 85% 1,036
MILLIONS OF CUBIC FEET OF GAS (MMcf): 45,837 + 26% 36,410
MILLIONS OF CUBIC FEET OF GAS EQUIVALENTS (Mmcfe): 57,339 + 35% 42,628
AVERAGE PRICE/BARREL $ 21.74 + 25% $ 17.46
AVERAGE PRICE/MCF $ 2.31 + 43% $ 1.62
AVERAGE GAS EQUIVALENT PRICE/MCFE $ 2.57 + 42% $ 1.81
_________________
Income before extraordinary item plus depreciation, depletion and amortization
expense, and the provision for deferred income taxes.