Chesapeake Energy 2004 Annual Report Download - page 13

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“We remain optimistic about the continued success
of the company and our ability to continue delivering
value to shareholders… based on the commitment of
1,900 top-notch employees, a successful time-tested
and focused business strategy, a value-added risk
management program, a steadily improving balance sheet
and increasingly valuable oil and natural gas assets.”
CHESAPEAKE ENERGY CORPORATION ANNUAL REPORT 2004
Finally, as scientists, policy-makers and businessmen debate the
possible effects of potential global warming, which some argue could
be partially caused by the increasing use of fossil fuels, we are proud
to remind investors that Chesapeake is a “good guy” in this debate.
We produce a valuable fuel that is in increasingly short supply, is
domestically produced and therefore requires no military commitment
to defend it and produces very few pollutants when burned. We look
forward to natural gas increasing in value over time as policy-makers
and consumers increasingly appreciate the many positive attributes
of this versatile and valuable “wonderfuel” – clean-burning,
domestically-produced natural gas.
LOOKING FORWARD WITH OPTIMISM
As we conclude this letter and reflect on having delivered a 1,600%
stock price increase to our shareholders during Chesapeake’s 12
years as a public company, we remain optimistic about the continued
success of the company and our ability to continue delivering value
to shareholders. We have built a strong foundation based on the
commitment of 1,900 top-notch employees, a successful time-tested
and focused business strategy, a value-added risk management
program, a steadily improving balance sheet and increasingly
valuable oil and natural gas assets. We also offer an entrepreneurial
and experienced management team that has proven itself through
a full range of commodity cycle challenges.
We are off to a great start in delivering another successful year of
performance to our shareholders in 2005. In the first three months
of the year, we have already closed or negotiated $1.0 billion of
acquisitions, commenced drilling operations on approximately 375
new wells, established daily production records and reached a
record level of proved reserves. U.S. natural gas prices continue to
strengthen because of tightening supply/demand fundamentals
in both U.S. gas and world oil markets. These supply/demand
imbalances cannot be easily or cheaply fixed, and as a result,
we believe the stage is set for an extended period of strong oil and
natural gas prices.
In the 1990’s, low oil and natural gas prices greatly benefited energy
consumers at the expense of energy producers and their shareholders.
In contrast, this decade should result in the opposite outcome. In
this environment, we believe Chesapeake will stay focused on leading
the way in delivering exceptional shareholder value in 2005
and beyond.
Best regards,
Aubrey K. McClendon
Chairman and Chief Executive Officer
Tom L. Ward
President and Chief Operating Officer
April 15, 2005