Chesapeake Energy 1997 Annual Report Download - page 23

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Development, Exploration and Acquisition Expenditures
The following table sets forth certain information regarding the costs incurred by the Company in its
development, exploration and acquisition activities during the periods indicated:
Acreage
The following table sets forth as of June 30, 1997 the gross and net acres of both developed and
undeveloped oil and gas leases which the Company holds. "Gross" acres are the total number of acres in
which the Company owns a working interest. "Net" acres refer to gross acres multiplied by the Company's
fractional working interest. Acreage numbers are stated in thousands.
(1) Does not include options for additional leasehold held by the Company but not yet exercised.
Marketing
The Company's oil production is sold under market sensitive or spot price contracts. The Company's
natural gas production is sold to purchasers under varying percentage-of-proceeds and percentage-of-index
contracts. By the terms of these contracts, the Company receives a percentage of the resale price received by
the purchaser for sales of residue gas and natural gas liquids recovered after gathering and processing the
Company's gas. The residue gas and natural gas liquids sold by these purchasers are sold primarily based on
spot market prices. The revenue received by the Company from the sale of natural gas liquids is included in
natural gas sales. During fiscal 1997, the following three customers individually accounted for 10% or more of
the Company's total oil and gas sales: Percent of Oil
Amount and Gas
($ in thousands) Sales
Management believes that the loss of any of the above customers would not have a material adverse effect
on the Company's results of operations or its financial position.
6
Developed Undeveloped Total Developed
and Undeveloped
Gross Net Gross Net Gross Net
Louisiana Trend 41 40 1,154(1) 1,003(1) 1,195 1,043
Oklahoma 85 34 297 134 382 168
Giddings 121 58 186 133 307 191
Williston Basin 32732 498 735 500
Other Areas 27 19 331 250 358 269
Total 277 153 2,700 2,018 2,977 2,171
Year Ended June 30,
1997 1996 1995
(S in thousands)
Development costs $187,736 $138,188 $ 78,679
Exploration costs 136,473 39,410 14,129
Acquisition costs:
Unproved properties 140,348 138,188 24,437
Proved properties 24,560
Capitalized internal costs 3,905 1,699 586
Proceeds from sale of leasehold, equipment and other. . (3,095) (6,167) (11,953)
Total $465,367 $335,878 $105,878
Aquila Southwest Pipeline Corporation 53,885 28%
Koch Oil Company 29,580 15%
GPM Gas Corporation 27,682 14%