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) January 9, 2003
(January 10, 2003)
CHESAPEAKE ENERGY CORPORATION
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(Exact name of Registrant as specified in its Charter)
Oklahoma 1-13726 73-1395733
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
6100 North Western Avenue, Oklahoma City, Oklahoma 73118
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(Address of principal executive offices) (Zip Code)
(405) 848-8000
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(Registrant's telephone number, including area code)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
Chesapeake Energy Corporation ("Chesapeake") issued a Press Release on
January 9, 2003 announcing an update on natural gas hedging program for 2003.
The following was included in the press release:
Chesapeake today announced that during the past six weeks it has entered into
additional hedges covering a portion of its anticipated 187-192 bcf of 2003
natural gas production. The table below sets forth the company's current hedging
positions:
AS OF 12/4/02 AS OF 1/9/03
Average Average
Period: % hedged NYMEX Price % hedged NYMEX Price
------ -------- ----------- -------- -----------
1Q '03 Gas: 66% $ 4.10 83% $ 4.23
2Q '03 Gas: 0% N/A 29% $ 4.34
3Q '03 Gas: 0% N/A 25% $ 4.41
4Q '03 Gas: 0% N/A 19% $ 4.62
Full-year '03 Gas: 16% $ 4.10 39% $ 4.33
Full-Year '03 Oil: 100% $27.78 100% $27.78
Management Summary
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented: "During
the past year, our study of evolving supply/demand fundamentals in the natural
gas industry has enabled Chesapeake to assume a bullish stance on natural gas
prices for 2003. Accordingly, until the past six weeks we had remained largely
unhedged for our natural gas production in 2003. We are now seeing natural gas
markets reflect the impact of an ongoing decline in North American gas supply, a
trend that we believe is unlikely to be reversed in 2003. We believe the
severity of this problem will result in even higher natural gas prices later
this year, prices that may result in further hedging by Chesapeake".
This document contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Forward-looking statements include estimates and give our current
expectations or forecasts of future events. They are based on our historical
operating trends, our existing commodity hedging position and our current
estimate of proved reserves. Although we believe our forward-looking statements
are reasonable, they can be affected by inaccurate assumptions or by known or
unknown risks and uncertainties. For example, statements concerning the fair
values of derivative contracts and their estimated contribution to our future
results of operations are based upon market information as of a specific date.
These market prices are subject to significant volatility. Factors that could
cause actual operating and financial results to differ materially from expected
results include the volatility of oil and gas prices, our substantial
indebtedness, our commodity price risk management activities, the cost and
availability of drilling and production services, our ability to replace
reserves, the availability of capital, uncertainties inherent in evaluating our
own reserves and the reserves we acquire, drilling and operating risks and other
risk factors described in the company's 2001 annual report on Form 10-K and
subsequent filings with the Securities and Exchange Commission.
Chesapeake Energy Corporation is one of the 10 largest independent natural gas
producers in the U.S. Headquartered in Oklahoma City, the company's operations
are focused on exploratory and developmental drilling and producing property
acquisitions in the Mid-Continent region of the United States. The company's
Internet address is www.chkenergy.com.
With the filing of this report on Form 8-K, we are updating the outlook on our
website at www.chkenergy.com. We caution you that our outlook is given as of
January 9, 2003 based on currently available information, and that we are not
undertaking any obligation to update our estimates as conditions change or other
information becomes available.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHESAPEAKE ENERGY CORPORATION
By: /s/ Aubrey K. McClendon
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Aubrey K. McClendon
Chairman of the Board and
Chief Executive Officer
Dated: January 10, 2003