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CHK » Topics » Item 2.01 Completion of Acquisition or Disposition of Assets

This excerpt taken from the CHK 8-K filed Nov 18, 2005.

Item 2.01 Completion of Acquisition or Disposition of Assets

 

On November 14, 2005, Chesapeake Energy Corporation (the “Company”) closed the acquisition of Columbia Natural Resources, LLC (“CNR”) and certain affiliated entities from Triana Energy Holdings, LLC. The purchase price was $2.95 billion, which consisted of $2.2 billion in cash and $0.75 billion in liabilities assumed at closing. The Company purchased all the membership interests of Columbia Energy Resources, LLC (“CER”), the holding company of CNR, pursuant to the Purchase Agreement dated September 30, 2005, which was included as an exhibit to our current report on Form 8-K filed November 1, 2005.

 

Through this transaction the Company acquired properties and assets principally located in the Appalachian Basin in West Virginia, Kentucky, Ohio, Pennsylvania and New York, including:

 

 

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an internally estimated 1.1 trillion cubic feet of natural gas equivalent of proved reserves, 99% of which are natural gas with an average BTU content of 1,140, and 69% of which are classified as proved developed;

 

 

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approximately 4.1 million net acres of oil and gas leasehold, 3.5 million in the U.S. and 0.6 million in Canada, which we estimate have over 9,400 undrilled locations with reserve potential providing an estimated drilling inventory of more than 15 years; and

 

 

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extensive mid-stream natural gas assets, including over 6, 500 miles of natural gas gathering lines.

We financed the acquisition with the net proceeds from recent offerings of $500 principal amount of 6.875% Senior Notes due 2020, $690 million principal amount of 2.75% Contingent Convertible Senior Notes due 2035 and $575 million of 5% Cumulative Convertible Preferred Stock (Series 2005B), cash on hand and borrowings under our revolving bank credit facility.

Section 7- Regulation FD

 

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