Chesapeake Energy 1994 Annual Report Download - page 12

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Wells in the Golden Trend Field have many attractive characteristics, including
reserves that are long-lived and weighted 85% towards liquids-rich natural gas. in
addition, drilling costs are predictable and controllable, and multiple zone
completions reduce geological and financial risk. Chesapeake has developed a
significant geological and engineering niche in the Golden Trend, enabling the
company to generate attractive finding costs and low lifting costs. Chesapeake excels
in the drilling of these technically-demanding deep wells. In fact, in fiscal 1994, our
30 Golden Trend wells averaged 13,500 feet in depth, making Chesapeake the leader
in average well depth drilled in Oklahoma.
Moreover, the company's land position in the
Golden Trend continues to grow. After beginning
the year with 150 undrilled locations in our Golden Trend CORPORATEHEADQUARTERS
OKLAHOMA CITY, OK
inventory and after drilling 30 wells (23 operated by FIELD OFFICE
Chesapeake and seven by Anadarko), Chesapeake still controls LINDSAY, OK
more than 150 undrilled Golden Trend locations. For fiscal
1995, Chesapeake has budgeted $11 million to drill 12 net (50
gross) wells in the Golden Trend. GOLDEN TREND FIELD
in August 1994, Chesapeake renewed for a second three-year 35000 ACRE INVENTORY
period its 50/50 joint venture with Amerada Hess in the Golden 150 UNDRILLED LOCATIONS (40 PROVEN)
Trend. In this joint venture, Chesapeake drills and operates 90 PRODUCING WELLS
the wells and Amerada Hess assists with geophysical and PARTNERS WITH AMERADA HESS
engineering support. In addition to Amerada Hess, Chesapeake I
has smaller joint ventures in this field with Mobil, Texaco, Amoco, Phillips,
Marathon, Chevron, and Noble Affiliates.
As in Giddings, Chesapeake continues to deepen the downdip limits of the Golden
Trend Field. In fiscal 1994, Chesapeake drilled the first two wells that established
production below 15,000 feet from the Sycamore, Woodford, Hunton, and Viola
formations in the Knox area of the Golden Trend.
KNOX
Knox is the second "New Area" we would like to introduce in this report. Knox is a
southwest extension to the Golden Trend and represents a significant opportunity for
Chesapeake to further increase the company's reserves. In fiscal 1995, through our
Knox area development, Chesapeake will become the first company to establish
10 HESAPEAKL ENERGY CORPORATON