OKLAHOMA CITY, Jan. 22, 2016 /PRNewswire/ -- Chesapeake Energy
Corporation (NYSE:CHK) announced today that it has suspended
payment of dividends on each series of its outstanding convertible
preferred stock effective immediately.
Doug Lawler, Chesapeake's Chief
Executive Officer, commented, "The board and management believe
this decision is in the best long-term interest of all Company
stakeholders. Today's decision to suspend our preferred stock
dividends will allow the company to retain approximately
$170 million of additional cash per
year and use these funds to purchase debt at significant discounts
in the near term. Given the current commodity price environment for
oil, natural gas and natural gas liquids, we believe that
redirecting this cash toward debt retirement provides better
returns for the Company. We currently have senior debt securities
trading at significant discounts, and we will continue to take
advantage of that within the coming year."
Suspension of the dividend does not constitute an event of
default under the Company's revolving credit facility or
outstanding bond indentures.
Chesapeake Energy Corporation (NYSE:CHK) is the
second-largest producer of natural gas and the 12th 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 and compression businesses. Further
information is available at www.chk.com
where Chesapeake routinely posts announcements, updates,
events, investor information, presentations and news
releases.
This news release includes "forward-looking statements"
that give Chesapeake's current expectations or forecasts of future
events, including our plans to repurchase debt and our ability to
achieve better returns from debt repurchases. Although we believe
the expectations and forecasts reflected in our forward-looking
statements are reasonable, Chesapeake can give no assurance they
will prove to have been correct. They can be affected by inaccurate
or changed assumptions or by known or unknown risks and
uncertainties, including: (i) the timing and amount of any debt
repurchases; (ii) whether our decision to redirect cash toward debt
retirement will provide better returns; and (iii) those described
under "Risk Factors" in Item 1A of our annual report on Form
10-K and in our current report on Form 8-K filed on
December 2, 2015 (available at
http://www.chk.com/investors/sec-filings). 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 this information, except as required by
applicable law.
INVESTOR CONTACT:
|
MEDIA CONTACT:
|
Brad Sylvester, CFA
(405) 935-8870
ir@chk.com
|
Gordon Pennoyer
(405) 935-8878
media@chk.com
|
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SOURCE Chesapeake Energy Corporation