Chesapeake Energy 1999 Annual Report Download - page 59

Notes Payable and Long-Term Debt
Notes payable and long-term debt consist of the following:
The aggregate scheduled maturities of notes payable and long-term debt for the next five fiscal years ending
December 31, 2004 and thereafter were as follows as of December 31, 1999 (in thousands of dollars):
$763
2000 44,336
2001 601
2002
2003 149,927
2004 769.233
After 2004 5 964.860
Contingencies and Commitments
Bayard Securities Litigation
A purported class action alleging violations of the Securities Act of 1933 and the Oklahoma Securities Act was
first filed in February 1998 against the Company and others on behalf of investors who purchased common stock of
Bayard Drilling Technologies, Inc. ("Bayard") in, or traceable to, its initial public offering in November 1997.
Total proceeds of the offering were $254 million, of which the Company received net proceeds of $90 million as a
selling shareholder. Plaintiffs allege that the Company, a major customer of Bayard's drilling services and the owner
of 30.1% of Bayard's common stock outstanding prior to the offering, was a controlling person of Bayard. Alleged
defective disclosures are claimed to have resulted in a decline in Bayard's share price following the public offering.
Plaintiffs seek a determination that the suit is a proper class action and damages in an unspecified amount or
rescission, together with interest and costs of litigation, including attorneys' fees.
On August 24, 1999, the court dismissed plaintiffs' claims against the Company under Section 15 of the
Securities Act of 1933 alleging that the Company was a "controlling person" of Bayard. Claims under Section 11 of
the Securities Act of 1933 and Section 408 of the Oklahoma Securities Act continue to be asserted against the
Company. The Company believes that it has meritorious defenses to these claims and intends to defend this action
vigorously. No estimate of loss or range of estimate of loss, if any, can be made at this time. Bayard, which was
acquired by Nabors Industries, Inc. in April 1999, has been reimbursing the Company for its costs of defense as
incurred.
Patent Litigation
On September 21, 1999, judgment was entered in favor of the Company in a patent infringement lawsuit tried to
the U.S. District Court for the Northern District of Texas, Fort Worth Division. Filed in October 1996, the lawsuit
asserted that the Company had infringed a patent belonging to Union Pacific Resources Company. The court
declared the patent invalid, held that the Company could not have infringed the patent, dismissed all of UPRC's
claims with prejudice and assessed court costs against UPRC. Appeals of the judgment by both the Company and
UPRC are pending in the Federal Circuit Court of Appeals. The Company has appealed the trial court's ruling
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December 31,
1999 1998
(S in thousands)
7.875% Senior Notes (see Note 2) $ 150,000 $ 150,000
Discount on 7.875% Senior Notes (73) (90)
8.5% Senior Notes (see Note 2) 150,000 150,000
Discount on 8.5% SeniorNotes (715) (774)
9.125% Senior Notes (see Note 2) 120,000 120,000
Discount on 9.125% Senior Notes (52) (60)
9.625% Senior Notes (see Note 2) 500,000 500,000
Note payable 2,200 -
Other collateralized 43 500 25.000
Total notes payable and long-term debt 964,860 944,076
Less current maturities (763) (25.000)
Notes payable and long-term debt, net of current
maturities $ 964 097 $ 919.076