Chesapeake Energy Corporation announced that its Board of Directors has authorized the repurchase of up to $1 billion in aggregate value of its common stock and/or warrants from time to time.
The repurchase authorization permits Chesapeake to make repurchases on a discretionary basis as determined by management, subject to market conditions, applicable legal requirements, available liquidity, compliance with the company’s debt agreements and other appropriate factors.
Nick Dell’Osso, Chesapeake’s President and Chief Executive Officer, stated “Generating sustainable cash flow and returning it to our shareholders is a foundational part of our strategy. We are pleased to build upon our previously announced base and variable dividend structure to include the ability to repurchase a significant amount of our outstanding equity.”
He said despite the volatility in commodity markets, Chesapeake’s cash flow projections remain robust, supporting a $1.75/share base dividend plus a variable dividend equal to 50% of its free cash flow.
“When combined, we estimate that total cash dividends to be paid to shareholders in 2022 will range from $800 million to $1 billion, based on our recent Outlook and the current commodity price environment,” he added.
“The addition of a $1 billion equity buyback program, which we expect to execute over the next 24 months, highlights the advantages of our disciplined capital allocation strategy, our resiliency through commodity price cycles, and our commitment to maintaining a capital reinvestment rate in our business to sustain our current cash flow over the long term.”
Acquisitions under this repurchase authorization are to be made through open market or privately negotiated transactions and may be made pursuant to plans entered into in accordance with Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934.
This repurchase authorization does not obligate Chesapeake to acquire any particular amount of common stock or warrants, and may be modified, extended, suspended or discontinued at any time without prior notice. No assurance can be given that any particular amount of common stock or warrants will be repurchased.
Source: press release