Chesapeake Energy to get new revolver in connection with spinoff

By Toni Weeks

San Luis Obispo, Calif., March 17 - Chesapeake Energy Corp. intends to obtain a new senior secured revolving credit facility in connection with its spinoff of Seventy Seven Energy Inc., according to an 8-K filing with the Securities and Exchange Commission.

Proceeds will be used to pay off borrowings under the company's $500 million credit facility, which expires Nov. 3, 2016, and to terminate that facility as well as to make a one-time cash dividend payment to Chesapeake prior to the spinoff. The existing revolver has $452.2 million of borrowings outstanding as of March 1, the filing said.

The spinoff is contingent on Chesapeake entering into the new revolver and terminating the current revolver, among other conditions.

Chesapeake is an Oklahoma City-based developer of unconventional resources. SSE, formerly Chesapeake Oilfield Operating, LLC will be an indirect wholly owned subsidiary of Chesapeake after the spinoff and provider of oilfield services and equipment.

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