Chesapeake Files Form 10 Registration Statement for Possible Spin-off of Chesapeake Oilfield Services
March 17 2014 - 9:01AM
Business Wire
Chesapeake Energy Corporation (NYSE:CHK) announced today that
Chesapeake Oilfield Operating, L.L.C. (COO), its wholly owned
subsidiary, has filed a Registration Statement on Form 10 with the
U.S. Securities and Exchange Commission. COO currently conducts the
operations of Chesapeake’s oilfield services division, Chesapeake
Oilfield Services (COS).
The Form 10 contains a preliminary information statement about
the potential terms and conditions of a spin-off of COO to
Chesapeake Energy Corporation shareholders. It also provides
initial information regarding COO as a stand-alone company,
including financial, business, risk factor and management
information. Immediately prior to completion of the possible
spin-off, COO will convert into a corporation and change its name
to Seventy Seven Energy Inc. The Form 10 is available at sec.gov
and cosus.com. Shareholders who want more complete information
regarding the possible spin-off of COO, including the potential
benefits and risks associated with the transaction, should consult
the Form 10, which may be revised or updated in the future.
Chesapeake intends for the spin-off to be tax-free to its
shareholders for U.S. federal income tax purposes, other than with
respect to any cash received in lieu of fractional shares. To that
end, Chesapeake has obtained a private letter ruling from the
Internal Revenue Service and expects to obtain an opinion of tax
counsel regarding the tax treatment of the spin-off.
Chesapeake has retained Morgan Stanley & Co. LLC as its
financial advisor in connection with evaluating strategic
alternatives for COS.
Chesapeake Energy Corporation (NYSE:CHK) is the
second-largest producer of natural gas and the 10th largest
producer of oil and natural gas liquids in the U.S. Headquartered
in Oklahoma City, the company's operations are focused on
discovering and developing its large and geographically diverse
resource base of unconventional natural gas and oil assets onshore
in the U.S. The company also owns substantial marketing,
compression and oilfield services businesses. Further information
is available at www.chk.com where Chesapeake
routinely posts announcements, updates, events, investor
information, presentations and news releases.
The spin-off of COO is subject to satisfaction of several
conditions, some of which are beyond our control, including SEC
effectiveness of the Registration Statement on Form 10, market
conditions, board approvals, consents, the continued effectiveness
of the private letter ruling, regulatory review and approvals,
among others. Even if these conditions are satisfied, there can be
no assurance that the proposed separation will lead to a spin-off
or any other transaction, or that if any transaction is pursued,
that it will be consummated.
This news release includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements are statements other than statements of historical fact
that give our current expectations or forecasts of future events
and include statements about the potential spin-off and the outlook
for COO as a separate business, among others. Forward-looking
statements are based upon Chesapeake management's expectations and
beliefs concerning future events. There can be no assurance that
any transaction or future events will occur as anticipated, if at
all, or that actual results will be as expected. Although
management believes the expectations and forecasts reflected in the
forward-looking statements are reasonable, we can give no assurance
they will prove to have been correct. They can be affected by
inaccurate assumptions or by known or unknown risks and
uncertainties. For a description of certain factors that could
negatively impact the oil and gas exploration and production
business and the oilfield services business, and potentially a
transaction to separate COO, see "Risk Factors" in the Registration
Statement on Form 10, in Chesapeake's Annual Report on Form 10-K
for the year ended December 31, 2013 and in COO’s Annual Report on
Form 10-K for the year ended December 31, 2013. We caution you not
to place undue reliance on our forward-looking statements, which
speak only as of the date of this news release, and we undertake no
obligation to update any of the information provided in this
release, except as required by applicable law.
Chesapeake Energy CorporationInvestor Relations:Gary T. Clark,
CFA, 405-935-8870ir@chk.comorMedia Relations:Gordon Pennoyer,
405-935-8878media@chk.com
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