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2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp

Chesapeake Energy Corp · Oct 14, 2009 · 184 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 1
    2009 Institutional Investor and Analyst Meeting October 14, 2009 New York York, NY
  2. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 2
    2009 Investor and Analyst Meeting Why Invest in CHK You will see today that CHK has a unique strategy, powerful assets and a distinctive culture Over next 4-5 years years, CHK should be able to increase its production and proved…
  3. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 3
    2009 Investor and Analyst Meeting CHK Overview One of the largest producers of U.S. natural gas 2Q09 natural gas production of 2.245 bcf/day Most active driller in U.S. CHK is responsible for 1 of 7 gas wells being drilled in the…
  4. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 4
    2009 Investor and Analyst Meeting Key Operational Takeaways and Perspectives Enormity of CHKs opportunity set and advantaged, low-cost asset portfolio Improving cost trends and efficiencies Unique q operational p skill sets…
  5. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 5
    2009 Investor and Analyst Meeting Americas 1 Gas Resource Base Net Acreage Drillsites CHK is exceptionally well positioned for 36,000 net drillsites 14.3 million acres long-term profitable growth Largest L t combined bi d…
  6. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 6
    2009 Investor and Analyst Meeting CHKs Drilling Inventory(1) Total Proved Est. Risked Est. Avg. Total Risked and Risked Unrisked Current Current CHK CHK Drilling Net Reserves Proved Unproved Unproved Unproved Daily Operated (2)…
  7. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 7
    2009 Investor and Analyst Meeting Focused on Low Risk, High ROR Plays Five key assets drive 2010 portfolio 90% of operated rig allocation and 90% of drillbit capital expenditures Low risk, risk long life assets Predictable…
  8. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 8
    2009 Investor and Analyst Meeting Portfolio Transition & Upgrade 2004 Portfolio: 2009 Portfolio: 2010 Portfolio: 2011 Portfolio: 28% ROR 48% ROR (without ( ith t carry)) 58% ROR (without ( ith t carry)) 59% ROR (without ( ith t…
  9. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 9
    2009 Investor and Analyst Meeting Production History and Transition Operated Rig Count Rig count shifted to develop highest ROR projects, 180 170 160 to deploy drilling carries and to HBP acreage 150 140 nt 130…
  10. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 10
    2009 Investor and Analyst Meeting Production Growth Analysis CHK Net Production 1/08 12/09 From 1/08 to 12/09, CHK will: 3.0 Achieve 12% total net production growth 2.8 (29% excluding divestitures) (0.35) 2.6 6% CAGR (14% CAGR…
  11. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 11
    2009 Investor and Analyst Meeting Top-Tier Production Growth Potential Annual Average Production Rates 4,000 326 mmcfe/day growth 3 600 3,600 from 103 rigs 480 mmcfe/day growth 372 mmcfe/day growth from 145 rigs 3,200 from 140…
  12. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 12
    2009 Investor and Analyst Meeting CHK Long-term Production Outlook(1) All Other Barnett Fayetteville Haynesville Marcellus Wash Op Rig Count 4,000 200 3,600 180 3,200 160 Daily Rate MMCFFE/D Operated Rig Cou nt 2,800…
  13. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 13
    2009 Investor and Analyst Meeting CHK Operating Strategy Top-tier resource plays lend themselves to continuous improvement p Playy Concept Develop p Capture Acreage Scale and Prove Up the Play Leading Edge Vertical…
  14. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 14
    2009 Investor and Analyst Meeting Vertical Integration Builds Efficiencies and Drives Value Chesapeake Energy Marketing, Inc. Chesapeake Midstream CHK has captured more of the value-chain than any other U.S. operator 13
  15. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 15
    2009 Investor and Analyst Meeting Implementing Leading Edge Technology Horizontal drilling and enhanced completion technologies enabled new unconventional pplays y Integrated technology solutions are driving improved performance…
  16. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 16
    2009 Investor and Analyst Meeting Advanced Analytical Methods Data Filter Identify Test Optimized Metrics Crossplots Correlations Economics Results Stimulation Design Parameter Performance Indicator Completion Data Metrics…
  17. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 17
    2009 Investor and Analyst Meeting Stimulation Design Optimization Barnett All Data Gas in Place Filter dicator dicator 4000 4000 3000 3000 Performance Ind Performance Ind 2000 2000 1000 1000 0 0 P P 0 200 400…
  18. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 18
    2009 Investor and Analyst Meeting Stimulation Design Optimization Fayetteville All Data Lateral Lengths dicator erformance Indiicator Performance Ind Pe P Stimulation Design Parameter Stimulation Design Parameter…
  19. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 19
    2009 Investor and Analyst Meeting Translating into Value Haynesville Shale Optimization Analysis Optimization Economics 3200 50% Economics Optimized Design Performance Indicator Optimized Design 2400 40%…
  20. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 20
    2009 Investor and Analyst Meeting Haynesville Case Study Leveraging all of CHKs Strengths CHK: Haynesville Rig Count: Operated Proved the concept 40 Captured the opportunity 35 30 Assembled A bl d the th best b t and d…
  21. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 21
    2009 Investor and Analyst Meeting Haynesville Case Study CHK Process is Driving Cost Savings and Efficiency Haynesville Gross Cost Trends Costs per well down 27% from 9.5 mm to 12.0 9.5 Drill, mm Complete, mm 6.9 mm er Well Cost…
  22. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 22
    2009 Investor and Analyst Meeting Haynesville Case Study Consistently Improving Results (1) Hayensville Average IP Rates 16.0 14.0 14.5 Early delineation and midstream build out 12.4 12.5 day) 12 0 12.0 Gross Production…
  23. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 23
    2009 Investor and Analyst Meeting Haynesville Shale Overview CHK discovered in 2007, the Haynesville Shale is likely to become one of the two largest natural gas Prospective Area = 3.5 Million Acres fields in the U.S. TEXAS…
  24. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 24
    2009 Investor and Analyst Meeting Haynesville Shale Last 12 Months Significant accomplishments since 2008 Investor and Analyst Meeting: Increased rig count from 14 to 35 operated rigs (32% of industry total) Increased proved…
  25. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 25
    2009 Investor and Analyst Meeting Bossier Shale Overview CHK is the largest leasehold owner in the play Bossier Shale Prospective Area = 1.0 Million Acres CHK currently owns 175,000 net acres of Texas Louisiana leasehold ease o d…
  26. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 26
    2009 Investor and Analyst Meeting CHK is King of the Haynesville Core CHK discovered the Haynesville and from the beginning targeted the Core In the past three years, CHK has built the d i dominant t leasehold l h ld position iti…
  27. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 27
    2009 Investor and Analyst Meeting CHK is Also the King of the Haynesville/Bossier Shale Overlap Core CHK anticipates having an interest in roughly 80% of the wells drilled in the Haynesville and Bossier Core area CHK is concentrated…
  28. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 28
    2009 Investor and Analyst Meeting Haynesville and Bossier Shale Advantages Advantages of the Haynesville and Bossier Shale plays Overpressured reservoirs Shared surface facilities/development efficiencies High gas-in-place and high…
  29. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 29
    2009 Investor and Analyst Meeting Haynesville Shale Geology A A A A Haynesville Shale was deposited approximately 150 million years ago 8
  30. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 30
    2009 Investor and Analyst Meeting Bossier Shale Geology A A A A Bossier Shale was deposited approximately 140 million years ago 9
  31. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 31
    2009 Investor and Analyst Meeting Haynesville and Bossier Shale Characteristics Haynesville Shale Bossier Shale Depth TVD 10,500 13,500 500 - 800 shallower MD (horizontals) 14,500 18,000 than Haynesville Shale Thickness (net) 150…
  32. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 32
    2009 Investor and Analyst Meeting Haynesville Shale Reservoir Characterization CHKs comprehensive reservoir characterization drives the Haynesville development Maximize value by increasing recovery factor at lower costs Industry…
  33. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 33
    2009 Investor and Analyst Meeting Haynesville Shale Development Plan CHK leasehold of 510,000 net acres 80-acre spacing (8 wells per sq mile or section) 3,750 , potential p net wells to be drilled,, risked at 40% (last ( year y…
  34. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 34
    2009 Investor and Analyst Meeting Haynesville Shale Emphasis on Superpads Superpads Reduced surface impact Fewer rig moves 8 wells per superpad 16 wells per superpad in Haynesville/Bossier stacked fairway 1 superpad per section…
  35. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 35
    2009 Investor and Analyst Meeting Haynesville Shale Drilling CHK Improvements Haynesville Gross Cost Trends 12 9.5 Drill Complete Goal Continual focus on process improvement and 10 8.9 7.8 efficiencies ons) Per Well Cost (in…
  36. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 36
    2009 Investor and Analyst Meeting Haynesville Shale Targeted Well Profile 12.0 6.00 6.5 bcfe EUR Type Curve Daily Rate IP Rate: 14.1 mmcfe/day First month average: 10.6 mmcfe/day Finding cost: 1.44/mcfe Cumulative Production 10.0…
  37. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 37
    2009 Investor and Analyst Meeting Haynesville Shale Results to Date Haynesville Type Curve and Normalized Production History 12.0 150 Current Type Curve Q2'09: Previous Type Curve Q1'09: IP Rate(1): 14.1 mmcf/d IP Rate(1): 10.0…
  38. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 38
    2009 Investor and Analyst Meeting Haynesville Shale PV10 Sensitivity 6.50 6.00 5.50 5.00 1 yr ago NYMEX (/mcf) 4.66 4.50 Current 4.44 CAPEX (M) Target 4.00 8,000 4.00 7,500 7,000 3.50 6,500 6,000…
  39. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 39
    2009 Investor and Analyst Meeting Haynesville Shale Rate of Return Profile 500% 4.5 bcfe 450% 6.5 bcfe 400% 8.5 bcfe 350% OR 300% Pre-Tax RO 250% 200% 150% 100% 50% 0% 5.00 6.00 7.00 8.00 9.00 NYMEX Gas Price…
  40. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 40
    2009 Investor and Analyst Meeting Haynesville Shale Growth Profile Chesapeake Total Net Gas Production 50 1,250 Haynesville y Wedge g Haynesville Base 40 1,000 Operated Rigs ay) Net Producttion (mmcfe/da Operated…
  41. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 41
    2009 Investor and Analyst Meeting Haynesville/Bossier Shale Summary Haynesville/Bossier Shale will likely become one of the two largest natural gas fields in the U.S. CHK is the largest leaseholder in the Haynesville and Bossier…
  42. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 42
    Marcellus Shale Tom Layman, Vice President Geoscience Eastern Division
  43. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 43
    2009 Investor and Analyst Meeting Marcellus Shale Overview The Marcellus Shale play is likely to become one of the two largest gas fields in the U.S. (Haynesville the other) Prospective Area = 15 Million Acres CHK is a top-3…
  44. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 44
    2009 Investor and Analyst Meeting Marcellus Shale Potential How Does it Compare Marcellus fairway is larger than other three Big 4 shale plays combined Marcellus has favorable depths, depths thickness, thickness pressures and rock…
  45. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 45
    2009 Investor and Analyst Meeting Marcellus Shale Where We Started CHK acquired a leading position in the play in 2005 through the acquisition of CNR This decision came after a thorough g in-house review of the Rockies vs.…
  46. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 46
    2009 Investor and Analyst Meeting Marcellus Shale Last 12 Months Joint Venture with StatoilHydro; closed in 11/08 CHK: 67.5% WI, STO: 32.5% WI 1.25 billion in cash 2.125 billion in drilling carries Eastern Division office…
  47. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 47
    2009 Investor and Analyst Meeting Marcellus Activity Continued Last 12 Months Significant accomplishments since 2008 Investor and Analyst meeting: Increased net acreage to 1.45 mm net acres Ramped up rig count from 3 operated rigs to…
  48. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 48
    2009 Investor and Analyst Meeting Marcellus Shale Leasehold Position CHK and partners control 2.35 million net acres Statoil JV covers entire Marcellus play Anadarko AMI (Area of Mutual Interest) in NE PA CHK is targeting to…
  49. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 49
    2009 Investor and Analyst Meeting CHKs Marcellus Partners Anadarko AMI Statoil Joint Venture Northeastern PA Chesapeake StatoilHydro Chesapeake p Anadarko 67.5% 50% 32 5% 32.5% 50% Company Marcellus Net Acres Chesapeake…
  50. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 50
    2009 Investor and Analyst Meeting Marcellus Shale Advantages Advantages of the Marcellus Shale play World class basin size Spans 15 million acres; 5x the Haynesville and 10x the Barnett Close to U.S. population centers and best…
  51. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 51
    2009 Investor and Analyst Meeting CHK is Successfully Managing Water Challenges Hydraulic fracturing will typically require 4-5 million gallons of water for a 4,500 lateral length g well Water is piped or trucked to the site and…
  52. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 52
    2009 Investor and Analyst Meeting Water Sources are Abundant in the Marcellus Major surface water resources in the Marcellus area Susquehanna River Delaware River Chenango River Chemung River Ohio River Groundwater resources 95%…
  53. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 53
    2009 Investor and Analyst Meeting CHK is Rapidly Evaluating the Play 12
  54. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 54
    2009 Investor and Analyst Meeting Marcellus Shale Play Summary Appalachian Basin More than 1,000 miles long Sediment fill up to 45,000 45 000 thick More structurally complex along eastern margin of the basin Marcellus Shale…
  55. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 55
    2009 Investor and Analyst Meeting Marcellus Shale Characteristics Depth TVD 1,500 - 8,500 MD (horizontals to date) 9,500 - 14,500 Thickness (net) 25 - 250 Total Organic Content (TOC) 5.3% - 7.8% Average log porosity 5.5% - 7.5%…
  56. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 56
    2009 Investor and Analyst Meeting Marcellus Shale Development Plan CHK leasehold of 1.45 mm net acres 80-acre spacing 4,550 potential net wells to be drilled, risked at 75% Pro forma average IP rate 4.0 mmcfe/day First month…
  57. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 57
    2009 Investor and Analyst Meeting Marcellus Shale Targeted Horizontal Well Profile 4.00 2.50 4.2 bcfe EUR Type Curve IP Rate: 4.0 mmcfe/day Daily Rate First month average: 3.5 mmcfe/day 3.50 Finding Cost: 1.28 (/mcfe) Cumulative…
  58. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 58
    2009 Investor and Analyst Meeting Marcellus Shale PV10 Sensitivity 8.00 Mcf) 7.00 R 10% ROR (/M 6.00 NYMEX PRICEE REQUIRED FOR 5.00 1 yr ago 4 00 4.00 3.87 Current CAPEX (M) 3.71 5,500 Target 5,000 3.00…
  59. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 59
    2009 Investor and Analyst Meeting Marcellus Shale Rate of Return Profile 250% 3.2 bcfe 225% 42b 4.2 bcfe f 200% 5.2 bcfe 175% 150% Pre-tax ROR R 125% 100% 75% 50% 25% 0% 5.00 6.00 7.00 8.00 9.00 NYMEX Gas…
  60. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 60
    2009 Investor and Analyst Meeting Marcellus Shale Growth Profile 60 Chesapeake Total Net Gas Production 600 Marcellus Wedge Marcellus Base 50 500 Operated Rigs duction (mmccfe/day) 40 400 30 300 ed Rigs Net Prod…
  61. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 61
    2009 Investor and Analyst Meeting Marcellus Shale Summary Marcellus Shale is likely to become one of the two largest natural gas fields in the U.S. (Haynesville the other) CHK was early to the play and is the largest leaseholder and…
  62. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 62
    2009 Investor and Analyst Meeting Fayetteville Shale Overview CHK is the second-largest producer in the Fayetteville Shale and the second-largest leasehold owner in the Core area of the play p y Currently operating 16 rigs to…
  63. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 63
    2009 Investor and Analyst Meeting Fayetteville Shale Background Discovered by Southwestern Energy (SWN) in 04/05 First Fayetteville Shale production in May 04; first horizontal production in May 05 CHK scouted SWN activity and…
  64. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 64
    2009 Investor and Analyst Meeting Fayetteville Shale Last 12 Months Significant accomplishments since 2008 Investor and Analyst Meeting: Increased proved reserves from 540 bcfe to 1,020 bcfe Increased net production from 145…
  65. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 65
    2009 Investor and Analyst Meeting Fayetteville Shale Leasehold Position ARKANSAS CHK Operated Rigs CHK Non-op Rigs CHK Acreage CHK currently owns 40 miles 440,000 net acres of leasehold in the Core area of the play…
  66. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 66
    2009 Investor and Analyst Meeting Fayetteville Shale Advantages Advantages of the Fayetteville Shale play Organic rich, low-clay content, high silica percentage Good permeability relative to other shale plays L acreage costs, Low t…
  67. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 67
    2009 Investor and Analyst Meeting Fayetteville Shale Chesapeake Pilot Tests TVD depths to top of lower Fayetteville range Fayetteville pilot areas assigned mainly to test from 1,200 to 7,500 across the current various log…
  68. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 68
    2009 Investor and Analyst Meeting Fayetteville Shale Approaching 2,100 Wells to Date 110 miles 40 miles s As of 10/1/09 Fayetteville Wells Drilled to Date SOUTHWESTERN 1,119 C S CHESAPEAKE 505 PETROHAWK 223 XTO 152 OTHER…
  69. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 69
    2009 Investor and Analyst Meeting Fayetteville Shale Characteristics Depth TVD 1,200 7,500 MD (horizontals) 5,700 13,500 Thickness 50 200 Total organic content (TOC) 2.0% 5.0% Thermal maturity (vitrinite reflectance) 1.2% 3.0%…
  70. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 70
    2009 Investor and Analyst Meeting Fayetteville Shale Development Plan CHK leasehold of 440,000 net acres 80 80-acre acre spacing 4,100 potential net wells to be drilled, risked at 20% Pro forma average IP rate 2.1 mmcfe/day…
  71. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 71
    2009 Investor and Analyst Meeting Fayetteville Shale Field Development Multi-well pads 2 miles Shared surface footprint North 3-6 wells per pad (3 acres) Fewer rig moves Atokan sands and shales 2500 +/- Wells 8 wells per…
  72. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 72
    2009 Investor and Analyst Meeting Fayetteville Shale Geo-Steering: Lateral Targets CORRELATION MWD LOG GAMMA T V D 12
  73. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 73
    2009 Investor and Analyst Meeting Fayetteville Shale Increasing Drilling Efficiencies Days vs. Depth Dollars vs. Depth 0 0 2006 2006 1,000 1,000 2007 2,000 2007 2,000 2008 3,000 2008 3,000 2009 1H 4,000 2009 1H 4,000…
  74. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 74
    2009 Investor and Analyst Meeting Fayetteville Shale Operational Excellence CHK has been and remains a leader in Fayetteville operations CHK was the first operator to determine better economics were associated with: Longer laterals…
  75. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 75
    2009 Investor and Analyst Meeting Fayetteville Shale Targeted Well Profile 2.00 2.00 2.4 Bcfe Fayetteville Type Curve 1.80 IP Rate: 2.1 mmcfe/day(1) Daily Rate 1.80 First Month Average: 1.9 1 9 mmcfe/day EUR: 2.40 bcfe…
  76. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 76
    2009 Investor and Analyst Meeting Fayetteville Shale Type Curve Fayetteville Type Curve and Normalized Production History 2,000 600 Current Type Curve Q2 09: Previous Type Curve Q1 09: IP Rate(1): 2.1 mmcf/day IP Rate(1): 1.9…
  77. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 77
    2009 Investor and Analyst Meeting Fayetteville Shale PV10 Sensitivity 9.00 8.00 quired for 10% Prre-tax ROR (/mccf) 7.00 6 00 6.00 5.10 One year ago 5.00 CAPEX (M) 4.85 Current 4,000 NYMEX Price Req 3,500…
  78. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 78
    2009 Investor and Analyst Meeting Fayetteville Shale Rate of Return 120% 2.2 bcfe 110% 2.4 bcfe 100% 26b 2.6 bcfe f 90% 2.8 bcfe 80% 3.0 bcfe OR 70% Pre-tax RO 60% 50% 40% 30% 20% 10% 0% 5.00 6.00 7.00…
  79. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 79
    2009 Investor and Analyst Meeting Fayetteville Shale Growth Profile CHK Total Net Gas Production 25 700 Fayetteville Wedge Fayetteville Base 600 20 Operated Rigs - Fayetteville 500 duction (mmcfe/day) 15 400 Operated…
  80. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 80
    2009 Investor and Analyst Meeting Fayetteville Shale Summary Successfully built the industrys second largest position Increased production 41% YTD to 260 mmcfe/day Reserves per well continue to improve Geo-steering, drilling and…
  81. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 81
    Financial Overview Marc Rowland, EVP & CFO
  82. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 82
    2009 Investor and Analyst Meeting Financial Highlights 33 billion enterprise value 18.1 billion equity value, 12.2 billion net long-term debt and 2.2 billion working capital deficit Strongg p profitabilityy 2009E: ebitda 4.0…
  83. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 83
    2009 Investor and Analyst Meeting Strong Cash Margins and Steady Debt Levels per Mcfe 9.50 2Q09 Averages 9.00 Net cash margin 8.50 (per mcfe) Preferred dividends 8.00 Interest (1) Realized price: 5.89 7.50 G&A(2) 7.00…
  84. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 84
    2009 Investor and Analyst Meeting Strong and Improving Liquidity Position 3.1 billion of liquidity at 9/30/09 Cash: 500 million CHK revolver: 11.85 85 billion of availability Midstream revolvers (CMD/CMP): 750 million of…
  85. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 85
    2009 Investor and Analyst Meeting A Quick Look Back In our October 2008 Investor and Analyst Meeting, we anticipated generating 3.0 - 4.5 billion of additional cash through the following transactions: Objective Status Proceeds ( mm)…
  86. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 86
    2009 Investor and Analyst Meeting (1) Cash Resource Plan 09 - 11 Net Cash Resources ( in millions) 2009E 2010E 2011E Total (1)(2) Operating cash flow 3,700 - 3,750 4,350 - 5,050 4,750 - 5,450 12,800 - 14,250 Leasehold and producing…
  87. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 87
    2009 Investor and Analyst Meeting 2009 Financial Projections at Various Natural Gas Prices As of 10/13/09 Outlook ( in millions; oil at 57.75 NYMEX) 4.00 5.00 6.00 7.00 8.00 9.00 (1) O/G revenue (unhedged) 890 bcfe 3,050 3,160 3,250…
  88. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 88
    2009 Investor and Analyst Meeting 2010 Financial Projections at Various Natural Gas Prices As of 10/13/09 Outlook ( in millions; oil at 80.00 NYMEX) 4.00 5.00 6.00 7.00 8.00 9.00 (1) O/G revenue (unhedged) 967 bcfe 3,770 4,480 5,200…
  89. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 89
    2009 Investor and Analyst Meeting 2011 Financial Projections at Various Natural Gas Prices As of 10/13/09 Outlook ( in millions; oil at 80.00 NYMEX) 4.00 5.00 6.00 7.00 8.00 9.00 (1) O/G revenue (unhedged) 1,095 bcfe 4,210 5,020…
  90. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 90
    2009 Investor and Analyst Meeting Senior Note Maturity Schedule(1) 4,000 3,600 Total Senior Notes: 11.2 billion Average Rate: 6.2% 3,278(2) 3 200 3,200 A Average M Maturity: i 7.3 7 3 years 2,800 2,476(2) 2,400 2,163(2)…
  91. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 91
    2009 Investor and Analyst Meeting Unsolicited Convertible Debt For Equity Exchanges Opportunistic approach to reduce financial leverage Attractive return on individual lots of unsolicited exchanges of existing convertible notes…
  92. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 92
    2009 Investor and Analyst Meeting CHK = Exceptional Value Average NYMEX Natural Gas Prices ( in millions, except per share data) 4.00 5.00 6.00 7.00 8.00 9.00 Proved reserves 11,500 15,500 19,700 24,000 28,300 32,700 (2) Unproved…
  93. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 93
    2009 Investor and Analyst Meeting New Structured Hedging Facility Size 10.4 billion of mark-to-market commitment 391,000 , contracts of tradingg capacity p y ((3.91 tcfe)) Separate limits for natural gas, oil and basis hedging…
  94. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 94
    2009 Investor and Analyst Meeting We Play Offense Into Price Spikes NYMEX Natural Gas Prices 16.00 Actual 14 00 14.00 10/08/09 Forward Curve 12.00 10 00 10.00 /mmbtu 90% Band 8.00 6 00 6.00 NYMEX Natural Gas…
  95. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 95
    2009 Investor and Analyst Meeting CHK Hedging Track Record Quarterly Realized Gains and Losses 1Q'01 - 2Q'09 800 CHKs hedging program has generated 600 3.2 billion in realized gains since inception in 2001 400 200 in…
  96. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 96
    2009 Investor and Analyst Meeting CHKs Natural Gas and Oil Hedge Positions for 2009-2010(1)(2) Current Hedging Position Provides Substantial Near Term Protection and Is Structured For A Rebound In 2010 and Beyond Volume NYMEX Volume…
  97. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 97
    Key Natural Gas Market Factors While U.S. natural gas prices are soft today, there are strong indications that market forces will create a strong natural gas price recovery in 2010 and 2011 The laws of supply and demand remain intact…
  98. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 98
    U.S. Natural Gas Production Outlook Rig Count Scenarios 1,800 62 1,700 60 1 600 1,600 58 1,500 56 eted Production (bcf/day) 1,400 54 1,300 52 1,200 50 1,100 48 1,000 46 Gas Rigs 900 44 800 42 700 40 Daily…
  99. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 99
    The Industrys Cost Curve is Shifting Rapidly Very Important to Understand Up until five years ago, most E&P companies in the U.S. owned an asset base that was more or less the same as everyone elses not true anymore and significant…
  100. 2009 Institutional Investor and Analyst Meeting – Chesapeake Energy Corp – slide 100
    What is the Marginal Cost of Supply Natural gas prices not likely to stay permanently low because of the great 3.00 success of the Big 4 Shale plays Onlyy 10-15 companies p have captured p &D costs (/mcffe) 2.75 So. OK…

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