Chesapeake Energy 1998 Annual Report Download - page 34

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Development Well. A well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic
horizon known to be productive.
Dry Hole; Dry Well. A well found to be incapable of producing either oil or gas in sufficient quantities tojustify
completion as an oil or gas well.
Exploratory Well. A well drilled to fmd and produce oil or gas in an unproved area, to fmd a new reservoir in a
field previously found to be productive of oil or gas in another reservoir or to extend a known reservoir.
Farmout. An assignment of an interest in a drilling location and related acreage conditional upon the drilling of
a well on that location.
Formation. A succession of sedimentary beds that were deposited under the same general geologic conditions.
Full-Cost Pool. The full-cost pooi consists of all costs associated with property acquisition, exploration, and
development activities for a company using the full-cost method of accounting. Additionally, any internal costs that
can be directly identified with acquisition, exploration and development activities are included. Any costs related to
production, general corporate overhead or similar activities are not included.
Gross Acres or Gross Wells. The total acres or wells, as the case may be, in which a working interest is owned.
Horizontal Wells. Wells which are drilled at angles greater than 70 from vertical.
MBbl. One thousand barrels of crude oil or other liquid hydrocarbons.
MBtu. One thousand Btus.
Mcf One thousand cubic feet.
Mcfe. One thousand cubic feet of gas equivalent.
MMBb1. One million barrels of crude oil or other liquid hydrocarbons.
MMBtu. One million Btus.
MMcf One million cubic feet.
MMcfe. One million cubic feet of gas equivalent.
Net Acres or Net Wells. The sum of the fractional working interest owned in gross acres or gross wells.
Present Value. When used with respect to oil and gas reserves, present value means the estimated future gross
revenue to be generated from the production of proved reserves, net of estimated production and future
development costs, using prices and costs in effect at the determination date, without giving effect to non-property
related expenses such as general and administrative expenses, debt service and future income tax expense or to
depreciation, depletion and amortization, discounted using an annual discount rate of 10%.
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.
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