Chesapeake Energy 2011 Annual Report Download - page 18

Download and view the complete annual report

Please find page 18 of the 2011 Chesapeake Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 52

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52

OPERATING
AREAS
C
hesapeake is the second-largest producer of U.S. natu-
ral gas, a Top 15 producer of oil and natural gas liquids
and the most active driller of new wells in the U.S. The
company has built the industry’s largest onshore U.S. oil and
natural gas resource base including high-quality assets and
leading positions in the Barnett, Haynesville, Bossier, Marcel-
lus and Pearsall natural gas shale plays and in the Eagle Ford,
Utica, Granite Wash, Cleveland, Tonkawa, Mississippi Lime,
Bone Spring, Avalon, Wolfcamp, Wolfberry and Niobrara
unconventional liquids plays.
We own interests in approximately 45,700 producing natu-
ral gas and oil wells, and in 2011 we produced approximately
1.2 trillion cubic feet of natural gas equivalent (tcfe), or an
average of 3.3 billion cubic feet of natural gas equivalent (bcfe)
per day. At year-end 2011, our proved reserves were 18.8 tcfe,
of which 54% were proved developed and all of which were lo-
cated onshore in the U.S. We have captured an inventory of up
to 125,000 future drilling opportunities — more than 40 years
worth of drilling opportunities — on approximately 15.3 mil-
lion net leasehold acres in the U.S. Chesapeake’s concentrated
operational focus has allowed the company to build leading po-
sitions in 11 of the top 15 unconventional liquids-rich plays and
in four of the top five unconventional natural gas shale plays
in the U.S.
In recognition of the value gap between oil and natural gas
prices that has widened to historic levels in the last three years,
Chesapeake has directed virtually all of its technological and
leasehold acquisition expertise to identify, secure and com-
mercialize new unconventional liquids-rich plays. This planned
transition will result in a more balanced and more profitable
portfolio between natural gas and liquids. To date, we have
built leasehold positions and established production in mul-
tiple liquids-rich plays on approximately 6.6 million net lease-
hold acres. Our production of liquids averaged approximately
87,000 barrels (bbls) per day during 2011, a 72% increase over
the average during 2010, as a result of the increased develop-
ment of our unconventional liquids-rich plays. In 2011, approxi-
mately 50% of our drilling and completion expenditures were
allocated to liquids-rich plays, compared to 30% in 2010, 10%
in 2009 and an expected 85% in 2012.
Colony Granite Wash
Texas Panhandle
Granite Wash
Delaware Basin
Mississippi Lime
Cleveland and Tonkawa
Midland Basin
Niobrara Shale and Frontier
Niobrara Shale
Eagle Ford Shale
Bossier Shale
Haynesville Shale
Barnett Shale
Pearsall Shale
Williston Basin
Utica Shale
Marcellus Shale
SOUTHERN DISTRICT
NORTHERN DISTRICT
EASTERN DISTRICT
WESTERN DISTRICT
Natural Gas Plays
Liquids-Rich Plays
Wet Gas Plays
16 | Operating Areas