Chesapeake Energy 1997 Annual Report Download - page 30

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Productive Well. A well that is producing oil or gas or that is capable of production.
Proved Developed Reserves. Reserves that can be expected to be recovered through existing wells with
existing equipment and operating methods.
Proved Reserves. The estimated quantities of crude oil, natural gas and natural gas liquids which
geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions.
Proved Undeveloped Location. A site on which a development well can be drilled consistent with spacing
rules for purposes Of recovering proved undeveloped reserves.
Proved Undeveloped Reserves. Reserves that are expected to be recovered from new wells drilled to
known reservoir on undrilled acreage or from existing wells where a relatively major expenditure is required for
recompletion.
Royalty Interest. An interest in an oil and gas property entitling the owner to a share of oil or gas
production free of costs of production.
Tcf One trillion cubic feet.
Tcfe. One trillion cubic feet of gas equivalent.
Undeveloped Acreage. Lease acreage on which wells have not been drilled or completed to a point that
would permit the production of commercial quantities of oil and gas regardless of whether such acreage
contains proved reserves.
Working Interest. The operating interest which gives the owner the right to drill, produce and conduct
operating activities on the property and a share of production.
ITEM 2. Properties
Oil and Gas Reserves
The tables below set forth information as of June 30, 1997 with respect to the Company's estimated net
proved reserves, the estimated future net revenue therefrom and the present value thereof at such date.
Williamson Petroleum Consultants, Inc. ("Williamson") evaluated most of the Company's Texas oil and gas
reserves and all of its Louisiana oil and gas reserves, together representing approximately 50% of the
Company's total proved reserves. The Company internally evaluated the remaining reserves, which were
subsequently evaluated by Williamson with a variance of approximately 4% of total proved reserves. The
estimates were prepared based upon a review of production histories and other geologic, economic, ownership
and engineering data developed by the Company. The present value of estimated future net revenue shown is
not intended to represent the current market value of the estimated oil and gas reserves owned by the
Company.
Estimated Future
Net Revenue Proved Proved Total
as of June 30, 1997(a) Developed Undeveloped Proved
(a) Estimated future net revenue represents estimated future gross revenue to be generated from the
production of proved reserves, net of estimated production and future development costs, using prices and
13
Proved developed 7,324 151,879 195,823
Proved undeveloped 10,049 146,887 207,181
Total proved 17,373 298,766 403,004
($ in thousands)
Estimated future net revenue $336,417 $275,537 $611,954
Present value of future net revenue $248,765 $188,621 $437,386
Estimated Proved Reserves Oil Gas
as of June 30, 1997 (MBbI) (MMcf) Total