October 2010 Investor Presentation CHK Overview Second-largest producer of U.S. natural gas (trail only XOM) 2Q 10 natural gas production of 2.497 bcf/d; total company 2Q '10 production of 2.789 bcfe/d Most active driller in U.S.…
October 2010 Investor Presentation CHK Overview, Continued High quality natural gas shale and unconventional liquids U.S. asset base Five major natural gas shale plays: 2.8 mm net acres Marcellus, Marcellus Haynesville…
October 2010 Investor Presentation 2010 - 15 Strategic and Financial Plan Update CHK has already accomplished multiple parts of its 2010 - 15 strategic and financial plan that was announced in May 2010 Since May 2010, CHK has:…
October 2010 Investor Presentation What Will CHK Look Like in 2 Years 5 Years NAV 6.00 NYMEX natural gas prices and 80.00 oil ( in mm) 12/31/08 12/31/09 12/31/10E 12/31/12E 12/31/15E 7-year CAGR: Production (bcfe/day) 2.3 2.5 2.8 3.6…
Natural Gas and Oil Discussion
October 2010 Investor Presentation Anything Good To Say About Natural Gas Prices Historical trading range of oil to natural gas price ratio has been in the range of 5:1 to 10:1 Oil to natural gas energy equivalent ratio is 6:1 Since…
October 2010 Investor Presentation CHK is Shifting Operations to More Liquids-Rich Plays Total Natural Gas Capex Total Liquids Capex Reduce drilling of natural gas wells except for 100% mpletion Capex those required to HBP…
October 2010 Investor Presentation Adding Proved Reserves and Growing Production Consistently From 2008 to 2011, CHK projects it will increase 25,000 Oil & NGLs Proved Reserves (bcfe) oil and natural gas proved reserves by 70%…
October 2010 Investor Presentation CHKs Natural Gas and Oil Hedge Positions for 2H 2010 - 11 (1)(2) NYMEX Avg. Floor Nymex Avg. (3) Natural Gas Swaps % Hedged Avg. Price Natural Gas Collars % Hedged Price Ceiling Price 2H 2010E…
October 2010 Investor Presentation CHK Hedging: 5.4 Billion Lucky or Good Quarterly Realized Gains and Losses 1Q '01 - 2Q '10 800 4.00 CHKs hedging program has generated 5.4 billion in realized Realized Gains/Losses ( in…
Asset Overview
October 2010 Investor Presentation CHKs Primary Operating Areas CHK is transitioning from 92% natural gas production in 2009 to a greater balance between natural gas and liquids 13
October 2010 Investor Presentation Top 20 U.S. Natural Gas Producers Daily U.S. Natural Gas 2009 Reported Proved U.S. U.S. U.S. U.S. Gas Rigs (1)(2) Production 2Q'10 2Q'10 U.S. Net Natural Gas Gas Rigs Gas Rigs % Drilling vs.…
October 2010 Investor Presentation Top 20 U.S. Liquids Producers Daily U.S. Liquids 2009 Reported Proved U.S. U.S. (1)(2) Production 2Q'10 2Q'10 U.S. Net Liquids Liquids Rigs vs. 1Q'10 vs. 2Q'09 Proved Liquids RP Reserves Drilling…
October 2010 Investor Presentation Big Oil on the Way to CHK Started transition in early 2008 Announced discovery of Colony Granite Wash play, ultimately net 1,100 mmboe to CHK Disclosed new unconventional liquids plays Quietly…
October 2010 Investor Presentation Eagle Ford Shale - Overview CHK began leasing in August 2009 and has since captured the largest position in the Prospective Area = 6.3 Million Acres industry with 600,000 net leasehold acres…
October 2010 Investor Presentation Greater Granite Wash Overview CHK Op Rigs OK Texas Panhandle CHK Non-Op Rigs Granite Wash Colony Granite CHK Acreage Wash 70miles TX Zybach 2010H Peak Rate: 8.0 mmcf and 1,270 bbls/d…
October 2010 Investor Presentation 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 the…
October 2010 Investor Presentation Haynesville Shale Overview Discovered by CHK in 2007, the Haynesville Shale is Prospective Area = 3.0 Million Acres likely to become one of the two largest natural gas fields in the U.S.…
October 2010 Investor Presentation Bossier Shale Overview CHK is the largest leasehold owner in the play Bossier Shale Prospective Area = 1.0 Million Acres CHK currently owns 200,000 net acres of leasehold prospective for Bossier…
October 2010 Investor Presentation Barnett Shale Overview The Barnett Shale is currently the largest natural gas Prospective Area = 1.5 Million Acres producing field in the U.S. and is producing 40% of all shale gas in the U.S.…
October 2010 Investor Presentation Fayetteville Shale Overview CHK is the second-largest producer in the Fayetteville Shale and the second-largest Prospective Area = 1.7 Million Acres leasehold owner in the Core area of the…
October 2010 Investor Presentation CHK Owns Substantial Other Assets CHK has invested in a variety of other assets: drilling rigs and equipment, various midstream gathering and compression assets, securities of other companies and…
Financial Overview
October 2010 Investor Presentation 2010 Financial Projections at Various Natural Gas Prices As of 8/3/10 Outlook ( in millions; oil at 80.00 NYMEX) 4.00 5.00 6.00 7.00 (1) O/G revenue (unhedged) 1,022 bcfe 4,510 4,770 5,020 5,260…
October 2010 Investor Presentation 2011 Financial Projections at Various Natural Gas Prices As of 8/3/10 Outlook ( in millions; oil at 80.00 NYMEX) 4.00 5.00 6.00 7.00 (1) O/G revenue (unhedged) 1,204 bcfe 5,410 6,230 7,060 7,880…
October 2010 Investor Presentation CHK Keeps Delivering Per Share Growth Production/Weighted Average Fully Diluted Share Proved Reserves(1)/Fully Diluted Share 1.8 30 e/weighted avg fully dilted share 1.6 d share 25…
October 2010 Investor Presentation Senior Note Maturity Schedule(1) 3,600 CHK Total Senior Notes: 9.6 billion 3,216(2) 3,200 Average Maturity: 7.3 years 2,800 Convertible notes 2,400 Recent note offerings in August 2010…
October 2010 Investor Presentation Debt Per Proved Mcfe Analysis (as of 6/30/10, in millions) 1H '10 YE '12 Proved reserves (bcfe) 15,459 23,000 Proved developed reserves (bcfe) 8 388 8,388 13 500 13,500 Long-term debt 10,501…
October 2010 Investor Presentation Net Asset Value Discussions 31
October 2010 Investor Presentation Joint Venture Summary CHK/PXP: July 2008: Haynesville Shale (Louisiana, Texas): 80%/20%; 550,000 net acres; 30,000 per net acre; 3.3 billion; 50% cash/50% carry CHK/BP: September 2008:…
October 2010 Investor Presentation Enormous Value Creation Through JV Transactions CHK was early to recognize shale gas would become the biggest game changer in the past 50 years within the U.S. natural gas industry Initiated…
October 2010 Investor Presentation Comparative Value Creation Among Large and Mid-Cap E&Ps YE 2009/2Q '10 YE 2008 YE 2006 Proved Enterprise Proved Enterprise Proved Enterprise Proved Reserve Enterprise EV - PR Company Reserves…
October 2010 Investor Presentation Do We Make It Look Too Easy In 2010-11, CHK projects proved reserves will increase 5-6 tcfe, after 1.7 tcfe of expected asset sales CHK creates a new NBL, EQT, UPL, SWN, NFX, RRC, HK or COG every…
October 2010 Investor Presentation CHK's Valuation Using Sum of the Parts Math July '10 Proved CHK (1) Avg. Daily % of CHK Reserves % of CHK Value to Enterprise (2) (3) Asset Name Production Total 6/30/2010 Total Industry Value…
October 2010 Investor Presentation CHK's Valuation using Traditional NAV/DCF Valuation Math (1) 6/30/2010 pro forma (2) NAV various NYMEX natural gas prices ( in millions, except per share data) 4.00 5.00 6.00 7.00 Proved…
October 2010 Investor Presentation DCF Valuation Math for Unproved Acreage Unrisked Risked Time Unrisked Risked Time Adjusted Unproved Unproved Adjusted Risked Risked Estimated Acreage Value Acreage Value Estimated Unproved…
Summary
October 2010 Investor Presentation CHK: Positioned for Success in 2H 2010 and Beyond Great Assets Largest leasehold position in the best U.S. onshore natural gas shale plays 2.4 mm net acres of new leasehold targeting liquids-rich…
October 2010 Investor Presentation Corporate Information Corporate Contacts: Chesapeake Headquarters 6100 N. Western Avenue Jeffrey L. Mobley, CFA Oklahoma City, Cit OK 73118 Senior Vice President Web site: www.chk.com Investor…
October 2010 Investor Presentation Certain Reserve & Production Information The Securities and Exchange Commission requires natural gas and oil companies, in filings made with the SEC, to disclose proved reserves, which are those…
October 2010 Investor Presentation Estimates of Asset Values This presentation includes estimates of the value of certain assets. Some of these values are based on prior transactions involving the same assets, such as our shale…
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