Chesapeake Energy 1995 Annual Report Download - page 46

The aggregate scheduled maturities of notes payable
and long-term debt for the next five fiscal years ending June
30, 2000 and thereafter were as follows as of June 30, 1995
(in thousands of dollars):
On May 25, 1995, the Company issued $90 million
principal amount of the 10.5% Senior Notes due June 1,
2002 (See Note 2). The 10.5% Senior Notes are
redeemable at the option of the Company at any time on or
after June 1, 1999.
On March 31, 1994, the Company issued units
consisting of an aggregate of $47.5 million principal
amount of 12% Senior Notes due March 1, 2001 and
Warrants to purchase 973,750 shares of the Company's
Common Stock. (See Note 2.) The Warrants were valued
at $3.04 million based on the market value of the
Company's Common Stock at the date of issue ($3125 per
common share) and recorded as Common Stock Warrants
and paid-in capital on the June 30, 1994 consolidated
balance sheet. A bond discount was created as the
difference between the combined value of the 12% Senior
Notes and Warrants and the face value of the Units. The
principal amount of the 12% Senior Notes, less the
unamortized bond discount, is classified as long-term debt.
As part of the offering, the Company issued 8,000 Units to
TCW in exchange for preferred stock, warrants to purchase
Common Stock and an overriding royalty interest.
The Company's wholly-owned subsidiary, CGDC, has
acredit facility with Union Bank (the "Term Credit
Facility"), with an outstanding balance of $10.8 million at
June 30, 1995. Collateral for the Term Credit Facility is
limited to CGDC's producing oil and gas properties. The
Term Credit Facility has not been guaranteed by the
Company or any of its other subsidiaries and is recourse
only to the assets of CGDC. CGDC acquired producing
oil and gas properties from CEX in December 1994 and
June 1995 in exchange for $11.5 million in cash, using
proceeds borrowed under this facility. CGDC has not
guaranteed the payment of the Company's 12% or 10.5%
Senior Notes, nor has the capital stock of CGDC been
pledged to secure payment of such indebtedness. The
terms of the Term Credit Facility prohibit the payment of
dividends by CGDC.
In April 1993, the Company's subsidiary, CEX, entered
into an oil and gas reserve-based reducing revolving credit
facility (the "Revolving Credit Facility") with Union Bank.
In conjunction with the issuance of both the 12% and
10.5% Senior Notes, the Revolving Credit Facility was
amended and each time all but $10,000 of the balance was
paid. The maturity date is May 31, 2000. Outstanding
borrowings of tip to 50% of the borrowing base will bear
interest at Union Bank's reference rate; borrowings of 51%
to 74% of the borrowing base will bear interest at the
reference rate plus 0.25%; and borrowings of 75% or more
of the borrowing base will bear interest at the reference rate
plus 0.375%. Borrowings are secured by a first priority lien
on substantially all of CEX's proved developed producing
reserves, and are unconditionally guaranteed by the
Company. At June 30, 1995 and 1994, there was a
$10,000 outstanding balance under the Revolving Credit
Facility.
The amount of credit available at any time under the
Revolving Credit Facility is the lesser of the commitment
amount or the borrowing base. The borrowing base is
reduced each month by a specified amount. Both the
borrowing base and the monthly reduction amount are
redetermined by Union Bank each March 1 and September
I and may be redetermined at any other time upon the
request of CEX or Union Bank. CEX pays a
redetermination service fee of $5,000 at each
redetermination date. To the extent the amount
outstanding at any time exceeds the borrowing base, CEX
must reduce the amount outstanding or add additional
collateral. At June 30, 1995, the commitment amount and
the borrowing base under the Revolving Credit Facility was
approximately $25 million, and the monthly reduction
amount was $650,000. The Revolving Credit Facility
contains customary financial covenants, limitations on
indebtedness and liabilities, liens, prepayments of other
indebtedness (including the 12% and 10.5% Senior
1996 $ 9,993
1997 2,599
1998 12,373
1999 13,588
2000 12,954
After 2000 104,240
$155,747
44 CHESAPEAKE ENERGY CORPORATION