Filed by Chesapeake Energy Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Southwestern Energy Company
(SEC File No. 001-08246)
The following is a transcript of a conference call hosted by Chesapeake Energy Corporation on May 1, 2024.
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Forward-Looking Statements
This presentation includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements include our current expectations or forecasts of future events,
including matters relating to the pending merger with Southwestern Energy
Company ("Southwestern"), armed conflict and instability in Europe and the
Middle East, along with the effects of the current global economic
environment, and the impact of each on our business, financial condition,
results of operations and cash flows, actions by, or disputes among or
between, members of OPEC+ and other foreign oil-exporting countries, market
factors, market prices, our ability to meet debt service requirements, our
ability to continue to pay cash dividends, the amount and timing of any cash
dividends and our ESG initiatives. Forward-looking and other statements in
this presentation regarding our environmental, social and other sustainability
plans and goals are not an indication that these statements are necessarily
material to investors or required to be disclosed in our filings with the SEC.
In addition, historical, current, and forward-looking environmental, social
and sustainability-related statements may be based on standards for measuring
progress that are still developing, internal controls and processes that
continue to evolve, and assumptions that are subject to change in the future.
Forward-looking statements often address our expected future business,
financial performance and financial condition, and often contain words such as
"expect," "could," "may," "anticipate," "intend," "plan," "ability,"
"believe," "seek," "see," "will," "would," "estimate," "forecast," "target,"
"guidance," "outlook," "opportunity" or "strategy." The absence of such words
or expressions does not necessarily mean the statements are not forward-looking.
Although we believe the expectations and forecasts reflected in our
forward-looking statements are reasonable, they are inherently subject to
numerous risks and uncertainties, most of which are difficult to predict and
many of which are beyond our control. No assurance can be given that such
forward-looking statements will be correct or achieved or that the assumptions
are accurate or will not change over time. Particular uncertainties that could
cause our actual results to be materially different than those expressed in
our forward-looking statements include:
.
conservation measures and technological advances could reduce demand for
natural gas and oil;
.
negative public perceptions of our industry;
.
competition in the natural gas and oil exploration and production industry;
.
the volatility of natural gas, oil and NGL prices, which are affected by
general economic and business conditions, as well as increased demand for (and
availability of) alternative fuels and electric vehicles;
.
risks from regional epidemics or pandemics and related economic turmoil,
including supply chain constraints;
.
write-downs of our natural gas and oil asset carrying values due to low
commodity prices;
.
significant capital expenditures are required to replace our reserves and
conduct our business;
.
our ability to replace reserves and sustain production;
.
uncertainties inherent in estimating quantities of natural gas, oil and NGL
reserves and projecting future rates of production and the amount and timing
of development expenditures;
.
drilling and operating risks and resulting liabilities;
.
our ability to generate profits or achieve targeted results in drilling and
well operations;
.
leasehold terms expiring before production can be established;
.
risks from our commodity price risk management activities;
.
uncertainties, risks and costs associated with natural gas and oil operations;
.
our need to secure adequate supplies of water for our drilling operations and
to dispose of or recycle the water used;
.
pipeline and gathering system capacity constraints and transportation
interruptions;
.
our plans to participate in the LNG export industry;
.
terrorist activities and/or cyber-attacks adversely impacting our operations;
.
risks from failure to protect personal information and data and compliance
with data privacy and security laws and regulations;
.
disruption of our business by natural or human causes beyond our control;
.
a deterioration in general economic, business or industry conditions;
.
the impact of inflation and commodity price volatility, including as a result
of armed conflict and instability in Europe and the Middle East, along with
the effects of the current global economic environment, on our business,
financial condition, employees, contractors, vendors and the global demand for
natural gas and oil and on U.S. and global financial markets;
.
our inability to access the capital markets on favorable terms;
.
the limitations on our financial flexibility due to our level of indebtedness
and restrictive covenants from our indebtedness;
.
our actual financial results after emergence from bankruptcy may not be
comparable to our historical financial information;
.
risks related to acquisitions or dispositions, or potential acquisitions or
dispositions, including risks related to the pending merger with Southwestern,
such as the occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; the possibility that our
stockholders may not approve the issuance of our common stock in connection
with the proposed transaction; the possibility that the stockholders of
Southwestern may not approve the merger agreement; the risk that we or
Southwestern may be unable to obtain governmental and regulatory approvals
required for the proposed transaction, or required governmental and regulatory
approvals may delay the merger or result in the imposition of conditions that
could cause the parties to abandon the merger; the risk that the parties may
not be able to satisfy the conditions to the proposed transaction in a timely
manner or at all; risks related to limitation on our ability to pursue
alternatives to the merger; risks related to change in control or other
provisions in certain agreements that may be triggered upon completion of the
merger; risks related to the merger agreement's restrictions on business
activities prior to the effective time of the merger; risks related to loss of
management personnel, other key employees, customers, suppliers, vendors,
landlords, joint venture partners and other business partners following the
merger; risks related to disruption of management time from ongoing business
operations due to the proposed transaction; the risk that any announcements
relating to the proposed transaction could have adverse effects on the market
price of our common stock or Southwestern's common stock; the risk of any
unexpected costs or expenses resulting from the proposed transaction; the risk
of any litigation relating to the proposed transaction; the risk that problems
may arise in successfully integrating the businesses of the companies, which
may result in the combined company not operating as effectively and
efficiently as expected; and the risk that the combined company may be unable
to achieve synergies or other anticipated benefits of the proposed transaction
or it may take longer than expected to achieve those synergies or benefits;
.
our ability to achieve and maintain ESG certifications, goals and commitments;
.
legislative, regulatory and ESG initiatives, addressing environmental
concerns, including initiatives addressing the impact of global climate change
or further regulating hydraulic fracturing, methane emissions, flaring or
water disposal;
.
federal and state tax proposals affecting our industry;
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.
risks related to an annual limitation on the utilization of our tax
attributes, which is expected to be triggered upon completion of the merger,
as well as trading in our common stock, additional issuances of common stock,
and certain other stock transactions, which could lead to an additional,
potentially more restrictive, annual limitation; and
.
other factors that are described under Risk Factors in Item 1A of Part I of
our Annual Report on Form 10-K.
We caution you not to place undue reliance on the forward-looking statements
contained in this presentation, which speak only as of the filing date, and we
undertake no obligation to update this information. We urge you to carefully
review and consider the disclosures in this presentation and our filings with
the SEC that attempt to advise interested parties of the risks and factors
that may affect our business.
IMPORTANT INFORMATION FOR INVESTORS; ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the merger between Chesapeake and Southwestern, Chesapeake
has filed and will file relevant materials with the Securities and Exchange
Commission (the "SEC"). On February 29, 2024, Chesapeake filed with the SEC a
registration statement on Form S-4 (as amended on April 11, 2024 and as may be
further amended from time to time, the "Form S-4") to register the shares of
Chesapeake common stock to be issued in connection with the merger. The Form
S-4 includes a joint preliminary proxy statement of Chesapeake and
Southwestern that also constitutes a preliminary prospectus of Chesapeake (the
"joint proxy statement/prospectus"). The information in the Form S-4 is not
complete and may be changed. After the Form S-4 is declared effective, a
definitive proxy statement/prospectus will be mailed to stockholders of
Chesapeake and Southwestern. This communication is not a substitute for the
Form S-4, the joint proxy statement/prospectus or any other document that
Chesapeake or Southwestern (as applicable) has filed or may file with the SEC
in connection with the merger. BEFORE MAKING ANY VOTING DECISION, INVESTORS
ARE URGED TO CAREFULLY READ THE FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS
AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, AS THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT
CHESAPEAKE, SOUTHWESTERN, THE MERGER, THE RISKS RELATED THERETO AND RELATED
MATTERS.
Investors may obtain free copies of the Form S-4 and the joint proxy
statement/prospectus, as well as other filings containing important
information about Chesapeake or Southwestern, without charge at the SEC's
Internet website (http://www.sec.gov). Copies of the documents filed with the
SEC by Chesapeake may be obtained free of charge on Chesapeake's website at
http://investors.chk.com/. Copies of the documents filed with the SEC by
Southwestern may be obtained free of charge on Southwestern's website at
https://ir.swn.com/CorporateProfile/default.aspx.
Participants in Solicitation
Chesapeake and Southwestern and certain of their respective directors,
executive officers and other members of management and employees may be deemed
to be participants in the solicitation of proxies in connection with the
proposed transaction contemplated by the joint proxy statement/prospectus.
Information regarding Chesapeake's directors and executive officers and their
ownership of Chesapeake's securities is set forth in Chesapeake's filings with
the SEC, including Chesapeake's Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, which was filed with the SEC on February 21, 2024,
and its Definitive Proxy Statement on Schedule 14A, which was filed with the
SEC on April 26, 2024. To the extent such person's ownership of Chesapeake's
securities has changed since the filing of Chesapeake's proxy statement, such
changes have been or will be reflected on Statements of Change in Ownership on
Form 4 filed with the SEC thereafter. Information regarding Southwestern's
directors and executive officers and their ownership of Southwestern's
securities is set forth in Southwestern's filings with the SEC, including
Southwestern's Annual Report on Form 10-K for the fiscal year ended December
31, 2023, which was filed with the SEC on February 22, 2024, and an amendment
to its Annual Report on Form 10-K/A, which was filed with the SEC on April 29,
2024. To the extent such person's ownership of Southwestern's securities has
changed since the filing of Southwestern's proxy statement, such changes have
been or will be reflected on Statements of Change in Ownership on Form 4 filed
with the SEC thereafter. Additional information regarding the interests of
those persons and other persons who may be deemed participants in the proxy
solicitations may be obtained by reading the joint proxy statement/prospectus
and other relevant materials that will be filed with the SEC regarding the
proposed transaction when such documents become available. You may obtain free
copies of these documents as described in the preceding paragraph.
No Offer or Solicitation
This presentation relates to the proposed transaction between Chesapeake and
Southwestern. This presentation is for informational purposes only and shall
not constitute an offer to sell or exchange, or the solicitation of an offer
to buy or exchange, any securities or a solicitation of any vote or approval,
in any jurisdiction, pursuant to the proposed transaction or otherwise, nor
shall there be any sale, issuance, exchange or transfer of the securities
referred to in this document in any jurisdiction in contravention of
applicable law. No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act.
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