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CHK » Topics » Company Believes it May Ultimately Develop as Much as One Trillion Cubic Feet of Natural Gas Equivalent Reserves From Underneath 18,000-Acre Airport Lease for All-In Finding and Development Cost of Approximately $2.00 per McfeThis excerpt taken from the CHK 8-K filed Oct 31, 2007. Company Believes it May Ultimately Develop as Much as One Trillion Cubic Feet of Natural Gas Equivalent Reserves From Underneath 18,000-Acre Airport Lease for All-In Finding and Development Cost of Approximately $2.00 per Mcfe
OKLAHOMA CITY, OKLAHOMA, OCTOBER 30, 2007 – Chesapeake Energy Corporation (NYSE:CHK) today announced that it has recently initiated production of approximately 30 million cubic feet of natural gas equivalent (mmcfe) from the first 11 wells on its 18,000-acre Dallas/Fort Worth (DFW) International Airport lease. Acquired approximately one year ago for $185 million, the airport lease represents a significant value creation opportunity for Chesapeake, its minority- and women-owned business enterprise (M/WBE) partners and DFW International Airport. Based on the results of the company’s proprietary 3-D seismic analysis acquired earlier this year and the drilling, completion and production results to date, the company plans to drill approximately 300-325 wells on the airport lease.
Assuming an estimated average recovery of approximately 2.5 - 3.0 billion cubic feet of natural gas equivalent (bcfe) gross reserves per well, the company believes that up to one trillion cubic feet of natural gas equivalent (tcfe) reserves can be produced from under the airport at an all-in finding and development cost of approximately $2.00 per thousand cubic feet of natural gas equivalent (mcfe).
Since commencing 3-D seismic operations in December 2006 and drilling operations in May 2007, Chesapeake has employed five drilling rigs on a continuous basis at the airport and anticipates maintaining that level of activity through 2011, at which time the company should have completed drilling its planned 300 - 325 wells. To date, Chesapeake has initiated drilling activities on 33 wells, has started completion activities on 18 wells and is selling natural gas from 11 wells. Chesapeake hopes to reach a peak production level from the airport lease of approximately 250 mmcfe per day by year-end 2011 and expects production to continue for at least the next 50 years.
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