— Investment Is Focused on Building a Network of LNG Truck Fueling
Stations To Form the Backbone of America's Natural Gas Highway —
Conference Call to be held today, July 11 at 4:45 pm Eastern/1:45 pm
Pacific
SEAL BEACH, Calif.--(BUSINESS WIRE)--
In a major alliance supporting the growing transition by major shippers
and trucking operators from diesel to natural gas fuel, Chesapeake
Energy Corporation (NYSE:CHK), the nation's second largest natural gas
producer, is investing $150 million in Clean Energy Fuels Corp.
(Nasdaq:CLNE), North America's largest provider of natural gas fuel for
transportation. The investment is dedicated to help fund the development
of approximately 150 LNG truck fueling stations at strategic truck-stop
locations along major trucking corridors to form the backbone of
"America's Natural Gas Highway." Chesapeake is the sole investor in the
transaction, and will make the investment in Clean Energy through its
newly formed, wholly owned subsidiary, Chesapeake NG Ventures
Corporation (CNGV).
America's Natural Gas Highway -- Rendering of new Clean Energy LNG truck fueling station at major Travel Center for trucking on interstate highway system. (Photo: Business Wire)
"With the advent of new natural gas truck engines well-suited for
heavy-duty, over-the-road trucking, it is time to build America's
Natural Gas Highway," said Andrew J. Littlefair, President and CEO of
Clean Energy. "The investment by Chesapeake will help us accelerate the
development of this important fueling network."
"This new initiative is in addition to our growing development program
of stations serving local fleets in the refuse, transit, airport,
municipal and regional trucking markets around the country," added
Littlefair.
The investment is in the form of convertible debt issued in three
tranches of $50 million each that will provide the funding for a newly
formed subsidiary of Clean Energy that will be dedicated to the LNG
station build out. The first $50 million investment closed today, July
11, 2011, and the second and third tranches are expected to close in
June 2012 and June 2013, respectively. The debt carries an interest rate
of 7.5% and is convertible at CNGV's option into Clean Energy's common
stock at a 22.5% premium to the volume-weighted average closing price of
the 20-day period prior to the initial closing. In addition, Clean
Energy can, under certain circumstances, force conversion of the debt if
its common stock is trading at a 40% premium to the conversion price.
The entire principal balance of each note is due and payable seven years
following its issuance, and Clean Energy may repay each note in cash or
shares of its common stock.
Aubrey K. McClendon, Chief Executive Officer of Chesapeake commented,
"There is clearly ample demand for the benefits of abundant, affordable
and American natural gas among consumers who face the high costs of OPEC
oil at the fuel pump every day, especially America's truckers and goods
and product shippers. We are investing our capital in Clean Energy to
accelerate the delivery of the natural gas fueling infrastructure needed
to assure truck operators that they can transition away from high-priced
diesel, the cost of which is set by foreign oil, and choose a better
road powered by American natural gas."
Many of the LNG fueling stations will be co-located at Pilot-Flying J
Travel Centers already serving goods movement trucking across the
country. Clean Energy has an agreement with privately held Pilot Travel
Centers LLC of Knoxville, Tennessee to build, own and operate public
access, compressed and liquefied natural gas fueling facilities at
agreed-upon Pilot-Flying J travel centers. Pilot-Flying J is the
nation's largest operator of travel centers with over 440 retail
properties in more than 40 states.
Littlefair concluded, "Deployment of new and innovative heavy-duty
natural gas engines by world-class engine manufacturers and original
equipment truck manufacturers such as Cummins-Westport, Kenworth,
Peterbilt, Navistar, Freightliner and Caterpillar, combined with Clean
Energy's LNG fueling station construction expertise through our
NorthStar subsidiary, the strategic locations afforded by Pilot-Flying J
and the investment by Chesapeake, should serve to quicken the transition
to natural gas fuel as a game-changer for heavy-duty trucking."
Currently priced $1.50—$2.00 per gallon lower than diesel or gasoline
(depending upon local markets), the use of natural gas fuels reduces
greenhouse gas emissions up to 30% in light-duty vehicles and lowers
emissions by approximately 23% in medium to heavy-duty vehicle
applications. The U.S. Department of Energy reports that 98% of the
natural gas consumed in the U.S. is sourced in the U.S. and Canada,
making natural gas a secure North American energy choice.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy securities. The securities offered and
sold in the private placement have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or any state
securities laws, and may not be offered or sold in the United States
absent registration, or an applicable exemption from registration under
the Securities Act and applicable state securities laws.
Conference Call — A conference call will be held today, July 11
at 4:45 pm Eastern/1:45 pm Pacific to discuss these developments. For
callers within the U.S., please dial 1-877-407-4018, and for
international callers, please dial 1-201-689-8471. A telephone replay
will be available approximately two hours after the call concludes
through August 7, 2011 by dialing 1.877.870.5176 from the U.S. and
1.858.384.5517 from outside the U.S. The replay pin number is 375465.
This call also will be available on the investor relations section of
the Company's web site at www.cleanenergyfuels.com
About Chesapeake — Chesapeake Energy Corporation is the
second-largest producer of natural gas, a Top 15 producer of oil and
natural gas liquids and the most active driller of new wells in the U.S.
Headquartered in Oklahoma City, the company's operations are focused on
discovering and developing unconventional natural gas and oil fields
onshore in the U.S. Chesapeake owns leading positions in the Barnett,
Haynesville, Bossier, Marcellus and Pearsall natural gas shale plays and
in the Granite Wash, Cleveland, Tonkawa, Mississippian, Bone Spring,
Avalon, Wolfcamp, Wolfberry, Eagle Ford, Niobrara, Three Forks/Bakken
and Utica unconventional liquids plays. The company has also vertically
integrated its operations and owns substantial midstream, compression,
drilling and oilfield service assets. Chesapeake's stock is listed on
the New York Stock Exchange under the symbol CHK. Further information is
available at www.chk.com
where Chesapeake routinely posts announcements, updates, events,
investor information, presentations and press releases.
About Clean Energy Fuels — Clean Energy (Nasdaq:CLNE) is the
largest provider of natural gas fuel for transportation in North America
and a global leader in the expanding natural gas vehicle market. It has
operations in CNG and LNG vehicle fueling, construction and operation of
CNG and LNG fueling stations, biomethane production, vehicle conversion
and compressor technology.
Clean Energy fuels over 22,700 vehicles at 238 strategic locations
across the United States and Canada with a broad customer base in the
refuse, transit, trucking, shuttle, taxi, airport and municipal fleet
markets. Clean Energy del Peru, a joint venture, fuels vehicles and
provides CNG to commercial customers in Peru. We own (70%) and operate a
landfill gas facility in Dallas, Texas, that produces renewable natural
gas, or biomethane, for delivery in the nation's gas pipeline network,
and we plan to build a second facility in Michigan. We own and operate
LNG production plants in Willis, Texas and Boron, Calif. with combined
capacity of 260,000 LNG gallons per day and that are designed to expand
to 340,000 LNG gallons per day as demand increases. NorthStar, a wholly
owned subsidiary, is the recognized leader in LNG/LCNG (liquefied to
compressed natural gas) fueling system technologies and station
construction and operations. BAF Technologies, Inc., a wholly owned
subsidiary, is a leading provider of natural gas vehicle systems and
conversions for taxis, vans, pick-up trucks and shuttle buses. IMW
Industries, Ltd., a wholly owned subsidiary based in Canada, is a
leading supplier of compressed natural gas equipment for vehicle fueling
and industrial applications with more than 1,200 installations in 24
countries. www.cleanenergyfuels.com
Forward-Looking Statements — This news release contains 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 that
involve risks, uncertainties and assumptions, including statements about
the closing of future tranches of the Chesapeake investment, the number
of stations to be included in the natural gas highway system, the timing
for the completion of construction of these stations and the demand for
and deployment of heavy-duty natural gas vehicles. Actual results and
the timing of events could differ materially from those anticipated in
these forward-looking statements as a result of several factors,
including Clean Energy's performance of its obligations under its
agreements with Chesapeake, permitting or other delays encountered
during the construction of the stations for the natural gas highway
system, the performance, availability and price of heavy-duty natural
gas vehicles relative to gasoline and diesel vehicles and the price per
gallon of natural gas relative to diesel and gasoline. The
forward-looking statements made herein speak only as of the date of this
press release and, unless otherwise required by law, the company
undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances. Additionally,
Clean Energy's Form 10-Q filed on May 9, 2011 with the SEC (www.sec.gov)
contains risk factors which may cause actual results to differ
materially from the forward-looking statements contained in this press
release.
Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6788089&lang=en
For Clean Energy Fuels Corp.
News Media
Bruce Russell,
310-559-4955 ext. 101
brussell@cleanenergyfuels.com
or
Investors
Ina
McGuinness, 805-427-1372
ina@mcguinnessir.com
Source: Clean Energy Fuels Corp.
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