Chesapeake Energy 1998 Annual Report Download - page 77

Notes Payable and Long-Term Debt
Notes payable and long-term debt consist of the following:
57
The aggregate scheduled maturities of notes payable and long-term debt for the next five fiscal years ending
December 31, 2003 and thereafter were as follows as of December 31, 1998 (in thousands of dollars):
1999 $25,000
2000 -
2001
2002
2003 -
After 2003 919,076
$ 944,076
Contingencies and Commitments
The Company and certain of its officers and directors are defendants in a consolidated class action suit alleging
violations of the Securities Exchange Act of 1934. The plaintiffs assert that the defendants made material
misrepresentations and failed to disclose material facts about the success of the Company's exploration efforts in the
Louisiana Trend. As a result, the complaint alleges, the price of the Company's common stock was artificially
inflated from January 25, 1996 until June 27, 1997, when the Company issued a press release announcing
disappointing drilling results in the Louisiana Trend and a full-cost ceiling writedown to be reflected in its June 30,
1997 fmancial statements. The plaintiffs further allege that certain of the named individual defendants sold
conmion stock during the class period when they luew or should have known adverse nonpublic information. The
plaintiffs seek a determination that the suit is a proper class action and damages in an unspecified amount, together
with interest and costs of litigation, including attorneys' fees. The Company and the individual defendants believe
that these claims are without merit and have filed a motion to dismiss. No estimate of loss or range of estimate of
loss, if any, can be made at this time.
Another purported class action alleging violations of the Securities Act of 1933 and the Oklahoma Securities Act
is pending against the Company and others on behalf of investors who purchased common stock of Bayard Drilling
Technologies, Inc. ("Bayard") in its initial public offering in November 1997. Total proceeds of the offering were
$254 million, of which the Company received net proceeds of $90.2 million as a selling shareholder. Plaintiffs
allege that the Company, which owned 30.1% of Bayard's common stock outstanding prior to the offering, was a
controlling person of Bayard. Plaintiffs also allege that the Company had established an interlocking fmancial
relationship with Bayard and was a customer of Bayard's drilling services under allegedly below-market terms.
Plaintiffs also note the fact that three executive officers and directors of the Company were formerly directors of
Bayard. Plaintiffs assert that the Bayard prospectus contained material omissions and misstatements relating to (i)
the Company's financial "problems" and their impact on Bayard's operating results, (ii) increased costs associated
December 31, June 30,
1998 1997 1997
(S in thousands)
7.87 5% Senior Notes (see Note 2) $150,000 $ 150,000 $ 150,000
Discount on 7.875% Senior Notes (90) (106) (115)
8.5% Senior Notes (see Note 2) 150,000 150,000 150,000
Discount on 8.5% Senior Notes (774) (833) (862)
9.125% Senior Notes (see Note 2) 120,000 120,000 120,000
Discount on 9.125% Senior Notes (60) (69) (73)
9.625% Senior Notes (see Note 2) 500,000
10.5% Senior Notes (see Note 2) 90,000 90,000
Note payable to a vendor, collateralized by oil and gas tubulars,
payments due 60 days from shipment of the tubulars 1,380
Other collateralized 25,000
Total notes payable and long-term debt 944,076 508,992 510,330
Less current maturities (25,000) (1,380)
Notes payable and long-term debt, net of current
maturities $ 919,076 $ 508,992 $ 508,950