Chesapeake Energy to use bank borrowings for acquisitions, senior notes and equity may follow

New York, Jan. 17 - Chesapeake Energy Corp. said it will initially use borrowings under its bank credit facility to finance the acquisition of oil and natural gas assets for $796 million announced Tuesday.

Later in the year, the Oklahoma City-based oil and gas exploration and production company will issue senior notes and debt to refinance any amount beyond its cash flow less capital expenditures for exploration and production.

The purchases are from seven private companies and cover oil and natural gas assets in Chesapeake's Barnett Shale, South Texas, Permian Basin, Mid-Continent and East Texas regions. The price is $796 million in cash. Three of the acquisitions closed "recently" for $486 million and the rest are expected to be completed by the end of February.

Chesapeake also agreed to buy 13 drilling rigs from Martex Drilling Co., LLP for $150 million.

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