Chesapeake Energy (CHK)

2006 First Quarter Average Daily Production Increases 31% and 7% Over Production in the 2005 First Quarter and 2005 Fourth Quarter, Respectively

Daily production for the 2006 first quarter averaged 1.519 bcfe, an increase of 357 million cubic feet of natural gas equivalent (mmcfe), or 31%, over the 1.162 bcfe of daily production in the 2005 first quarter and an increase of 101 mmcfe, or 7%, over the 1.418 bcfe produced per day in the 2005 fourth quarter. Of the 357 mmcfe increase in daily production from the year ago quarter, 42% was generated from organic drillbit growth and 58% was generated from acquisitions, with the company’s trailing 12-month organic production growth rate calculated as 13%. Of the 101 mmcfe daily increase in sequential quarterly production, 22% was generated from organic drillbit growth and 78% was generated from acquisitions, with the company’s sequential quarterly organic production growth rate calculated as 1.7%. Chesapeake is anticipating total production growth of 24% in 2006 and organic growth rates of at least 10% in 2006 and 7-10% in 2007.

Chesapeake’s 2006 first quarter production of 136.8 bcfe was comprised of 124.1 billion cubic feet of natural gas (bcf) (91% on a natural gas equivalent basis) and 2.12 million barrels of oil and natural gas liquids (mmbbls) (9% on a natural gas equivalent basis). Chesapeake’s average daily production for the quarter of 1.519 bcfe consisted of 1.378 bcf of natural gas and 23,511 barrels (bbls) of oil. The 2006 first quarter was Chesapeake’s 19th consecutive quarter of sequential U.S. production growth. Over these 19 quarters, Chesapeake’s U.S. production increased 280%, for an average compound quarterly growth rate of 7.3% and an average compound annual growth rate of 32.2%.

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