Chesapeake Files Form 10 Registration Statement for Possible Spin-off of Chesapeake Oilfield Services

  Chesapeake Files Form 10 Registration Statement for Possible Spin-off of
  Chesapeake Oilfield Services

Business Wire

OKLAHOMA CITY -- March 17, 2014

Chesapeake Energy Corporation (NYSE:CHK) announced today that Chesapeake
Oilfield Operating, L.L.C. (COO), its wholly owned subsidiary, has filed a
Registration Statement on Form 10 with the U.S. Securities and Exchange
Commission. COO currently conducts the operations of Chesapeake’s oilfield
services division, Chesapeake Oilfield Services (COS).

The Form 10 contains a preliminary information statement about the potential
terms and conditions of a spin-off of COO to Chesapeake Energy Corporation
shareholders. It also provides initial information regarding COO as a
stand-alone company, including financial, business, risk factor and management
information. Immediately prior to completion of the possible spin-off, COO
will convert into a corporation and change its name to Seventy Seven Energy
Inc. The Form 10 is available at sec.gov and cosus.com. Shareholders who want
more complete information regarding the possible spin-off of COO, including
the potential benefits and risks associated with the transaction, should
consult the Form 10, which may be revised or updated in the future.

Chesapeake intends for the spin-off to be tax-free to its shareholders for
U.S. federal income tax purposes, other than with respect to any cash received
in lieu of fractional shares. To that end, Chesapeake has obtained a private
letter ruling from the Internal Revenue Service and expects to obtain an
opinion of tax counsel regarding the tax treatment of the spin-off.

Chesapeake has retained Morgan Stanley & Co. LLC as its financial advisor in
connection with evaluating strategic alternatives for COS.

Chesapeake Energy Corporation (NYSE:CHK) is the second-largest producer of
natural gas and the 10th largest producer of oil and natural gas liquids in
the U.S. Headquartered in Oklahoma City, the company's operations are focused
on discovering and developing its large and geographically diverse resource
base of unconventional natural gas and oil assets onshore in the U.S. The
company also owns substantial marketing, compression and oilfield services
businesses. Further information is available at www.chk.com where Chesapeake
routinely posts announcements, updates, events, investor information,
presentations and news releases.

The spin-off of COO is subject to satisfaction of several conditions, some of
which are beyond our control, including SEC effectiveness of the Registration
Statement on Form 10, market conditions, board approvals, consents, the
continued effectiveness of the private letter ruling, regulatory review and
approvals, among others. Even if these conditions are satisfied, there can be
no assurance that the proposed separation will lead to a spin-off or any other
transaction, or that if any transaction is pursued, that it will be
consummated.

This news release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are statements other than
statements of historical fact that give our current expectations or forecasts
of future events and include statements about the potential spin-off and the
outlook for COO as a separate business, among others. Forward-looking
statements are based upon Chesapeake management's expectations and beliefs
concerning future events. There can be no assurance that any transaction or
future events will occur as anticipated, if at all, or that actual results
will be as expected. Although management believes the expectations and
forecasts reflected in the forward-looking statements are reasonable, we can
give no assurance they will prove to have been correct. They can be affected
by inaccurate assumptions or by known or unknown risks and uncertainties. For
a description of certain factors that could negatively impact the oil and gas
exploration and production business and the oilfield services business, and
potentially a transaction to separate COO, see "Risk Factors" in the
Registration Statement on Form 10, in Chesapeake's Annual Report on Form 10-K
for the year ended December 31, 2013 and in COO’s Annual Report on Form 10-K
for the year ended December 31, 2013. We caution you not to place undue
reliance on our forward-looking statements, which speak only as of the date of
this news release, and we undertake no obligation to update any of the
information provided in this release, except as required by applicable law.

Contact:

Chesapeake Energy Corporation
Investor Relations:
Gary T. Clark, CFA, 405-935-8870
ir@chk.com
or
Media Relations:
Gordon Pennoyer, 405-935-8878
media@chk.com
 
Press spacebar to pause and continue. Press esc to stop.