Chesapeake Energy (CHK)

CERTAIN TRANSACTIONS AND RELATIONSHIPS

Oil and Gas Operations. Messrs. McClendon and Ward, our CEO and former COO, have participated in substantially all of our oil and gas wells under the Founder Well Participation Program (“FWPP) as more completely described on pages 33-34. The Company bills Messrs. McClendon and Ward for their share of leasehold, drilling, completion, equipping and operating costs monthly at the same time it bills other joint working interest owners. From January 1, 2005 to December 31, 2005, the Company billed Mr. McClendon $72,422,577 and Mr. Ward $72,453,882 for such costs. Messrs. McClendon and Ward paid each invoice promptly upon receipt. There was no amount owing by either of them for joint interest billing invoices at January 1, 2005 or at any month-end in 2005. Mr. Ward’s right to participate in the FWPP terminates at the end of his six-month consulting period on August 10, 2006.

Securities Issuances. In 2005, Messrs. McClendon and Ward each purchased the Company’s common stock, as indicated below, at the same price and subject to the same terms and conditions as such stock was purchased by the public or investors in conjunction with public offerings of the Company’s common stock:

Other Relationships. Mr. Ward’s brother, Ronnie D. Ward, has served as the Company’s Vice President—Land for the Company’s Northern Division since July 2005 and served as Northern Mid-Continent Land Manager from 1994 to July 2005. He earned an aggregate salary and bonus of $402,500 in 2005. The Company is a significant employer in Oklahoma City and we seek to fill positions with qualified employees, whether or not they are related to our executive officers or directors. We compensate employees who have such relationships within what we believe to be the current market rate for their position and provide benefits consistent with our policies that apply to all employees.

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