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This excerpt taken from the CHK 8-K filed Feb 15, 2008. Appalachian
Basin Gas Resource Plays– Chesapeake’s Appalachian assets include both
conventional and unconventional play types in various Devonian Shales and in
other non-shale formations. Chesapeake is the largest leasehold owner
in the region with 4.0 million net acres and is producing approximately 85
mmcfe
net per day following the sale of approximately 55 mmcfe per day of net
production through a volumetric production payment at year-end
2007. The company is currently using eight operated rigs in the
region to further develop its extensive leasehold
position. Chesapeake’s proved developed reserves in Appalachia are
850 bcfe, its proved undeveloped reserves are 552 bcfe and assuming an
additional 8,850 net wells are drilled in the years ahead, its estimated risked
unproved reserves are 3.5 tcfe (9.6 tcfe of unrisked unproved
reserves). The company is actively developing traditional shallow
Devonian Shale wells and tight gas sand wells, but is also conducting
exploration programs in the Lower Huron and Marcellus Shale formations and
in
various non-shale deeper formations. Chesapeake’s position in the
emerging Marcellus Shale is described below:
In
addition, Chesapeake continues to actively generate new prospects and acquire
additional leasehold throughout the company’s areas of operation in various
conventional, unconventional and emerging unconventional plays not described
above.
10
Company Sells 27,000 Net Acres of Arkoma Basin Woodford Shale Acreage for $170
Million and Exits Williston Basin for $80 Million
To
high-grade its leasehold inventories and to take advantage of industry
enthusiasm for certain shale plays that are not as attractive to Chesapeake,
the
company sold approximately 27,000 net acres in the Woodford Shale play in the
Arkoma Basin of southeastern Oklahoma for proceeds of approximately $170
million, or approximately $6,300 per acre. Additionally, Chesapeake
exited the Williston Basin and sold properties in the Rocky Mountains that
included approximately 10,000 net acres, 28 bcfe of proved reserves and five
mmcfe of daily production for proceeds of approximately $80
million. These transactions were completed in 2008 and Meagher Oil
& Gas Properties, Inc. acted as advisor to Chesapeake.
Management
Comments
Aubrey
K.
McClendon, Chesapeake’s Chief Executive Officer, commented, “We are pleased to
report outstanding production and reserve growth for the 2007 fourth quarter
and
full year. We are particularly proud of our success in growing
through the drillbit that enabled the company to exceed its internal
expectations and to lead the E&P industry in organic reserve and production
growth.
“We
are
also excited to showcase the company’s unparalleled future growth opportunities
that could potentially develop up to 100 tcfe of unproved
reserves. Our early recognition that structurally higher natural gas
prices, combined with improved drilling and completion technologies on
unconventional reservoirs, has enabled Chesapeake’s engineering, geoscientific
and lease acquisition teams to assemble the largest inventory of drilling
opportunities and unrealized upside in the industry. This inventory
should allow Chesapeake to deliver top-tier returns to shareholders through
high
rates of reserve and production growth for many years to come.”
Conference
Call Information
A
conference call to discuss this release has been scheduled for Friday morning,
February 15, 2008, at 9:00 a.m. EST. The telephone number to access
the conference call is |
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