Chesapeake Energy 2000 Annual Report Download - page 68

Notes Payable and Long-Term Debt
Notes payable and long-term debt consist of the following:
Chesapeake has a $100 million revolving bank credit facility which matures in July 2002, with a committed
borrowing base of $100 million. As of December 31, 2000, we had borrowed $25 million under the revolving bank
credit facility and had $31.5 million of the facility securing various letters of credit. Borrowings under the facility are
collateralized by certain producing oil and gas properties and bear interest at a variable rate, which was 9.3% per
annum as of December 31, 2000. Interest is payable quarterly calculated at .50% to 1.25%, depending on utilization,
plus the higher of (a) the Union Bank of California reference rate or (b) the federal funds rate plus .50% per year.
We may elect to convert a portion of our borrowings to interest calculated under a London Interbank Offered Rate
(LIBOR) plus 2.00% to 2.75%, depending on utilization. We are required to pay a commitment fee on the unused
portion of the borrowing base equal to 0.375% per annum due quarterly.
During 2000, we obtained a standby commitment for a $275 million credit facility, consisting of a $175 million
term loan and a $100 million revolving credit facility which, if needed, would have replaced our existing revolving
credit facility. The term loan was available to repurchase any of Gothic Production Corporation's 11.125% senior
secured notes tendered following the closing of the Gothic acquisition pursuant to a change-of-control offer to
purchase. In February 2001, we purchased $1.0 miffion of notes tendered for 101% of such amount. We did not use
the standby credit facility and the commitment terminated on February 23, 2001. Chesapeake incurred $3 2 million
of costs for the standby facility.
The aggregate scheduled maturities of notes payable and long-term debt for the next five fiscal years ending
December 31, 2005, and thereafter were as follows as of December 31, 2000 ($ in thousands):
2001 $836
2002 25,601
2003 -
2004 149,945
2005 500,000
After 2005 269,299
$945,681
Contingencies and Commitments
West Panhandle Field Cessation Cases. One of our subsidiaries, Chesapeake Panhandle Limited Partnership
("CP") (f/k/a MC Panhandle, Inc.), and two subsidiaries of Kinder Morgan, Inc. have been defendants in
13 lawsuits filed between June 1997 and January 1999 by royalty owners seeking the cancellation of oil and gas
leases in the West Panhandle Field in Texas. MC Panhandle, Inc., which we acquired in April 1998, has owned the
leases since January 1, 1997. The co-defendants are prior lessees. The plaintiffs in these cases have claimed the
leases terminated upon the cessation of production for various periods, primarily during the 1 960s. In addition, the
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December 31,
1999 2000
($ in thousands)
7.875% Senior Notes (see note 2) $150,000 $150,000
Discount on 7.875% Senior notes (73) (55)
8.5% Senior Notes (see note 2) 150,000 150,000
Discount on 8.5% Senior notes (715) (657)
9.125% Senior Notes (see note 2) 120,000 120,000
Discount on 9.125% Senior notes (52) (44)
9.625% Senior Notes (see note 2) 500,000 500,000
Note payable 2,200 1,437
Revolving bank credit facility 43,500 25,000
Total notes payable and long-term debt 964,860 945,681
Less current maturities (763) (836)
Notes payable and long-term debt, net of current maturities $964,097 $944,845