Chesapeake Energy 1997 Annual Report Download - page 37

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The following table sets forth certain operating data of the Company for the periods presented:
The Company completed an offering of 8,972,000 shares of common stock in December 1996 resulting in
net proceeds to the Company of approximately $288.1 million. Additionally, the Company issued $300 million
in Senior Notes in March 1997. The Company used the net proceeds from these offerings, along with cash
flow from operations, to fund its net capital expenditures of $524 million, repay all amounts outstanding under
its commercial bank credit facilities, and retire $47.5 million of Senior Notes.
Results of Operations
General. For the fiscal year ended June 30, 1997, the Company realized a net loss of $183.4 million, or a
loss of $2.79 per common share, on total revenues of $280.3 million. This compares to net income of
$23.4 million, or $0.40 per common share, on total revenues of $149.4 million in 1996, and net income of
$11.7 million, or $0.21 per common share, on total revenues of $67 3 million in fiscal 1995. The loss in fiscal
1997 as compared to significantly higher earnings in fiscal 1996 and fiscal 1995 was largely the result of a
$236 million asset writedown recorded in the fourth quarter under the full cost method of accounting. (See
"Results of Operations Impairment of Oil and Gas Properties").
Oil and Gas Sales. During fiscal 1997, oil and gas sales increased 74% to $192.9 million versus
$110.8 million for fiscal 1996 and 238% from the fiscal 1995 amount of $57 million. The increase in oil and gas
sales resulted primarily from strong growth in production volumes and significantly higher average oil and gas
prices. For fiscal 1997, the Company produced 78.6 Bcfe, at a weighted average price of $2.45 per Mcfe,
compared to 60.2 Bcfe produced in fiscal 1996 at a weighted average price of $1.84 per Mcfe, and 31.9 Bcfe
produced in fiscal 1995 at a weighted average price of $1.78 per Mcfe. This represents production growth of
31% for fiscal 1997 compared to fiscal 1996 and 146% compared to fiscal 1995.
20
Year Ended June 30,
1997 1996 1995
Net Production Data:
Oil (MBbl) 2,770 1,413 1,139
Gas (MMcf) 62,005 51,710 25,114
Gas equivalent (MMcfe) 78,625 60,190 31,947
Oil and Gas Sales ($ in 000's):
Oil $ 57,974 $ 25,224 $19,784
Gas 134,946 85,625 37,199
Total oil and gas sales $192,920 $110,849 $56,983
Average Sales Price:
Oil ($ per Bbl) $20.93 $17.85 $ 17.36
Gas ($ per Mcf) $2.18 $1.66 $1.48
Gas equivalent ($ per Mcfe) $2.45 $1.84 $1.78
Oil and Gas Costs ($ per Mcfe):
Production expenses and taxes $.19 $.14 $.13
General and administrative $.11 $.08 $.11
Depreciation, depletion and amortization $1.31 $.85 $.80
Net Wells Drilled:
Horizontal wells 75,7 42.0 28.5
Vertical wells 31.3 27.0 23.0
Net Wells at End of Period 270.1 187.0 96.4