Chesapeake Energy (CHK)

as Company Adds 1.311 Tcfe and Replaces Production by 488%

Chesapeake began 2005 with estimated proved reserves of 4.902 trillion cubic feet of natural gas equivalent (tcfe) and ended the third quarter with an internally estimated 6.213 tcfe, an increase of 1.311 tcfe, or 27%. During the 2005 first nine months, the company replaced its 338 bcfe of production with an estimated 1.649 tcfe of new proved reserves, for a reserve replacement rate of 488% at a drilling and acquisition cost of $1.47 per mcfe. Reserve replacement through the drillbit was 929 bcfe, or 275% of production (including a negative 19 bcfe from performance revisions and a positive 94 bcfe from oil and natural gas price increases), or 56% of the total increase, at a cost of $1.42 per mcfe. Reserve replacement through acquisitions was 720 bcfe, or 213% of production, or 44% of the total increase, at a cost of $1.54 per mcfe. The above figures do not include the impact of the pending CNR acquisition, which should close by December 1, 2005 and will increase Chesapeake’s proved reserves by an internally estimated 1.1 tcfe.

Total costs incurred to acquire and develop proved reserves during the first nine months of 2005 were $2.23 per mcfe. These total costs include drilling, completion, acquisition, seismic, leasehold, capitalized internal costs, non-cash tax basis step-up from various corporate acquisitions ($253 million, or $0.15 per mcfe), asset retirement obligations and all other capitalized miscellaneous costs. These costs exclude future development costs of proved undeveloped reserves, but include costs associated with acquisition of unproved properties on which proved reserves have not been booked. A complete reconciliation of finding and acquisition cost information and a roll-forward of proved reserves is presented on page 11 of this release.

As of September 30, 2005, the company’s estimated future net cash flows discounted at 10% before taxes (PV-10) from its proved reserves were $28.6 billion using field differential adjusted prices of $62.01 per bbl (based on a NYMEX quarter-end price of $66.38 per bbl) and $11.36 per mcf (based on a NYMEX quarter-end price of $14.20 per mcf). Chesapeake’s PV-10 changes by approximately $267 million for every $0.10 per mcf change in gas prices and approximately $49 million for every $1.00 per bbl change in oil prices. The above figures do not include the impact of the pending CNR acquisition, which would have added approximately $4.2 billion to the PV-10 total above had Chesapeake owned the CNR assets as of September 30, 2005.

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