Chesapeake Energy (CHK)

Chris O’Sullivan, Paloma’s President remarked, “We are pleased to join forces with Chesapeake in the Barnett Shale. The combination of our lease acquisition skills and Chesapeake’s technical expertise in the challenging operational environment of this play should create significant value for both Chesapeake and Paloma’s owners. Clearly Chesapeake has become the partner of choice for smaller companies in the Barnett and we are proud to join Dale, Four Sevens and Western on Chesapeake’s Barnett lease acquisition team.”

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are excited to announce our new leasehold acquisition and LSA with Paloma and its owners. With our own landmen and lease brokers teamed up with the Paloma, Western, Dale and Four Sevens leasing teams, we will be able to continue acquiring a steady stream of valuable leasehold in Tarrant, Johnson and western Dallas counties that will provide Chesapeake with substantial growth opportunities for years to come.

In addition, we are pleased to announce that our 2007 gross production exit rate from the Barnett Shale was 600 mmcfe per day (400 mmcfe per day net). This compares very favorably to our 2006 gross production exit rate of 250 mmcfe per day and we now will focus on achieving our 2008 gross production exit rate target of 900 - 1,000 mmcfe per day.”

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This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our current expectations or forecasts of future events, including expected results from oil and natural gas development drilling, and anticipated acquisition of leasehold. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this press release, and we undertake no obligation to update this information. Factors that could cause actual results to differ materially from expected results are described in “Risks Related to our Business” under “Risk Factors” in the Offer to Exchange attached as an exhibit to each of the two Schedules TO we filed with the Securities and Exchange Commission on October 23, 2007. These risk factors include the volatility of oil and natural gas prices; the limitations our level of indebtedness may have on our financial flexibility; the availability of capital on an economic basis to fund reserve replacement costs; our ability to replace reserves and sustain production; uncertainties inherent in estimating quantities of oil and natural gas reserves and projecting future rates of production and the amount and timing of development expenditures, and our ability to execute planned monetization transactions on terms that will be acceptable to us. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.

Chesapeake Energy Corporation is the largest independent producer and third-largest overall producer of natural gas in the United States. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Fort Worth Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the United States. Chesapeake’s Internet address is www.chk.com.

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Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are excited to announce our new undeveloped leasehold acquisition and LSA with Paun Peters and Western’s affiliate, Axia. With our own landmen and lease brokers now teamed up with the Western, Dale, Four Sevens and Sinclair leasing teams, we will continue acquiring a steady stream of valuable leasehold in Tarrant County that will provide Chesapeake with significant growth opportunities for years to come.”

Chesapeake Energy Corporation is the largest independent producer and third-largest overall producer of natural gas in the United States. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Fort Worth Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the United States. Chesapeake’s Internet address is www.chkenergy.com .

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Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are excited to announce our new undeveloped leasehold acquisition and Land Services Agreement with Four Sevens and Sinclair. Our first transaction with Four Sevens and Sinclair, completed in June 2006, has worked out very well for Chesapeake and we are pleased to once again acquire high quality Tarrant County leasehold from them. With our own landmen and lease brokers now teamed up with the Dale, Four Sevens and Sinclair leasing teams, we will be able to continue acquiring a steady stream of valuable leasehold in Tarrant County that will provide Chesapeake significant growth opportunities for years to come.”

Chesapeake Energy Corporation is the third-largest independent producer and sixth-largest overall producer of natural gas in the United States. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Fort Worth Barnett Shale, Fayetteville Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast, Ark-La-Tex and Appalachian Basin regions of the United States. Chesapeake’s Internet address is www.chkenergy.com.

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“We are very pleased to have Chesapeake join with us in this exciting venture,” said James T. McManus, President of Energen and Energen Resources. “Chesapeake is widely recognized as a leader in developing unconventional natural gas plays and has significant experience in the high-profile Barnett, Woodford and Fayetteville shales in Texas, Oklahoma and Arkansas as well as several others in the United States.

“Energen Resources has substantial geological expertise and data in its home-state of Alabama,” McManus added. “We are the largest producer of onshore gas in Alabama and have extensive knowledge of coalbed methane and other tight formations. Together, Energen Resources and Chesapeake are well-equipped to maximize the development potential of natural gas from a variety of shales in Alabama,” he said.

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented: “We are very proud to partner with Energen Resources in these promising new shale opportunities in Alabama. Energen Resources is a premier independent in the U.S., and we are very fortunate to be able to partner with them in their home state of Alabama, an area in which they have an extensive history and significant competitive advantages.

“Chesapeake’s presence in Alabama accomplishes our goal of building a significant leasehold position in every major shale play east of the Rockies,” McClendon said. “We now own approximately 4.25 million net acres of prospective shale leasehold onshore in the U.S. including: 650,000 net acres in the Barnett and Woodford shale plays in the Delaware Basin of West Texas; 200,000 net acres in the Barnett Shale play in the Fort Worth Basin; 100,000 net acres in the Woodford shale play in southeast Oklahoma; 1,000,000 net acres in the Fayetteville shale play in Arkansas; 200,000 net acres in the New Albany shale play in southern Illinois and northwestern Kentucky; 2,000,000 net acres in various new shale plays in Appalachia; and now 100,000 net acres in the shale plays of Alabama. We believe this is the largest shale leasehold position in the industry and also believe these unconventional shale acreage positions will provide Chesapeake with unique competitive advantages for years to come and will expose our shareholders to unproved reserves that dwarf the company’s existing eight trillion cubic feet equivalent of proved natural gas reserves.”

This release contains statements expressing future plans and objectives that constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. They include the plans of Energen and Chesapeake to explore and develop various Alabama shale plays in an area of mutual interest. A more complete discussion of risks and uncertainties that could affect future results of Energen and Chesapeake is included in each company’s periodic reports filed with the Securities and Exchange Commission.

Energen Corporation is a diversified energy holding company with headquarters in Birmingham, AL. Its two lines of business are the acquisition and development of domestic, onshore natural gas, oil and NGL reserves and natural gas distribution in central and north Alabama. Energen Resources has approximately 1.7 trillion cubic feet equivalent of proved reserves in the San Juan, Permian and Black Warrior basins and in the North Louisiana/East Texas area. More information is available at www.energen.com.

Chesapeake Energy Company is the third largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex and Appalachian Basin regions of the United States. The company’s Internet address is www.chkenergy.com.

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “Today’s announcement highlights Chesapeake’s proactive approach to revenue management. So far this year through August 31, we have realized approximately $740 million in cash gains from our natural gas hedges and, as of yesterday’s market close, the mark-to-market gain on our remaining 2006 natural gas hedges was approximately $460 million. In the second half of 2006, we have hedged approximately 92% of our anticipated natural gas production at an average NYMEX price of $9.24 per mmbtu. In addition, we have hedged approximately 80% of our anticipated 2007 natural gas production at an average NYMEX price of $9.92 per mmbtu and approximately 60% of our anticipated 2008 natural gas production at an average NYMEX price of $9.44 per mmbtu. We currently have a mark-to-market gain of approximately $2.2 billion on our open natural gas hedges.

Given that we believe today’s low natural gas prices have more to do with temporarily high natural gas storage inventories largely caused by last winter’s abnormally warm weather and less to do with any return to a structural oversupply of natural gas, Chesapeake has elected to shut-in some of our natural gas production. We will monitor market conditions and bring these unhedged natural gas production volumes back on stream as market conditions dictate. As a result, it is likely we will reduce Chesapeake’s 2006 fourth quarter production forecast range when we release our 2006 third quarter results.”

Chesapeake Energy Corporation is the third largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex and Appalachian Basin regions of the United States. The company’s Internet address is www.chkenergy.com.

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are excited to announce such a unique opportunity to develop this large, contiguous and valuable acreage position underlying one of the nation’s busiest airports. We also look forward to building an even larger presence in the Dallas and Fort Worth communities, of which our participation in the Airport’s M/WBE program will be an important part. This transaction with the DFW Airport helps ensure that the Barnett Shale will continue to be a key driver in Chesapeake’s growth plans for years to come.”

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our current expectations or forecasts of future events. They include estimates of Barnett Shale oil and natural gas reserves and our planned development of these reserves. Factors that could cause actual results to differ materially from expected results include uncertainties inherent in estimating quantities of oil and natural gas reserves and projecting future rates of production and the amount and timing of development expenditures generally; uncertainties in evaluating oil and natural gas reserves of the DFW lease and associated potential liabilities specifically; our ability to conduct an effective exploration and development drilling program on the DFW lease; and drilling and operating risks. Our internal estimates of reserves, particularly those in properties recently acquired or proposed to be acquired where we may have limited review of data or experience with the reserves, may be subject to revision and may be different from estimates by our external reservoir engineers at year-end. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. We refer you to “Risk Factors” in the Prospectus dated June 27, 2006 for our offering of 7.625% Senior Notes due 2013 filed with the Securities and Exchange Commission on June 29, 2006 for factors that may affect the company’s future performance generally. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this press release, and we undertake no obligation to update this information.

The SEC has generally permitted oil and natural gas companies, in filings made with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use the terms “probable”, “possible” or “unproved” to describe volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC’s guidelines may prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the company. While we believe our calculations of unproved drillsites and estimation of unproved reserves have been appropriately risked and are reasonable, such calculations and estimates have not been reviewed by third party engineers or appraisers.

Chesapeake Energy Corporation is the third largest independent producer of natural gas in the U.S. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex and Appalachian Basin regions of the United States. The company’s Internet address is