Chesapeake Energy 2013 Annual Report Download - page 54
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46
Oilfield Services Credit Facility. Our $500 million syndicated oilfield services revolving bank credit facility is used
to fund capital expenditures and for general corporate purposes associated with our oilfield services operations. The
facility may be expanded from $500 million to $900 million at COO’s option, subject to additional bank participation.
Borrowings under the credit facility bear interest at a variable interest rate and are secured by all of the equity interests
and assets of COO and its wholly owned subsidiaries (the restricted subsidiaries for this facility, which are unrestricted
subsidiaries under Chesapeake’s senior notes, contingent convertible senior notes, term loan, corporate revolving
bank credit facility, secured hedging facility and equipment master lease agreements). For further discussion of the
terms of our oilfield services credit facility, see Note 3 of the notes to our consolidated financial statements included
in Item 8 of this report.
Hedging Facility
We have a multi-counterparty secured hedging facility with 16 counterparties that have committed to provide
approximately 1.063 bboe of hedging capacity for natural gas, oil and NGL price derivatives and 1.063 bboe for basis
derivatives with an aggregate mark-to-market capacity of $17.0 billion under the terms of the facility. For further
discussion of the terms of our hedging facility, see Note 11 of the notes to our consolidated financial statements included
in Item 8 of this report.
Term Loan
In November 2012, we established an unsecured five-year term loan credit facility in an aggregate principal
amount of $2.0 billion for net proceeds of $1.935 billion. We used the proceeds from the term loan, along with proceeds
from assets sales, to repay our $4.0 billion term loan credit facility established in May 2012. Our obligations under the
facility rank equally with our outstanding senior notes and contingent convertible senior notes and are unconditionally
guaranteed on a joint and several basis by our direct and indirect wholly owned subsidiaries that are subsidiary
guarantors under the indentures for such notes. Amounts borrowed under the facility bear interest at a variable rate
and the facility may be voluntarily repaid at any time, subject to applicable premiums, as provided in the agreement.
See Note 3 of the notes to our consolidated financial statements included in Item 8 of this report for further discussion.