Chesapeake Energy 1994 Annual Report Download - page 13

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production from below 16,000 feet in the Sycamore, Woodford, Hunton and Viola
formations in the Golden Trend. Our success in Knox demonstrates Chesapeake's
ability to leverage its geological, engineering, and land expertise into new areas that
have the potential to increase proved reserves.
SHOLEM ALECHEM
In last year's annual report, we introduced our joint venture with Texaco iii the
Sholem Alechem area in Oklahoma as the second "New Area" after Navasota River.
The Sholem Alechem area is located within southern Oklahoma's giant Sho-Vel-
Turn Field. This field has produced more than one billion barrels of oil and one
trillion cubic feet of gas since its discovery more than 80 years ago. We have drilled
two successful wells in the Sholem Alechem joint venture and have budgeted $2
million to drill two net (six gross) wells in fiscal 1995. If this year's drilling activities
are successful, we believe the Sholem Alechem area is large enough to support the
drilling of more than 50 horizontal wells. We believe our horizontal drilling joint
venture with Texaco also demonstrates Chesapeake's ability to utilize its expertise in
advanced technologies to develop strong relationships with major oil companies.
CONSISTENT STRATEGY
Our decision to reproduce last year's cover and continue the conservative theme for
Chesapeake's annual report is evidence of the consistency of our corporate strategy.
Since Chesapeake's inception in 1 989, all of the company's reserves and assets have
been built through drilling activities. We plan to continue this proven strategy of
growth through the drillbit.
Our plan centers on an aggressive undeveloped leasehold acquisition program. It
currently provides a three-year inventory of undrilled locations on which we
intend to utilize advanced horizontal and vertical drilling technologies to generate
continuing production and reserve growth. We believe this strategy will create
substantial value for our shareholders.
LOOKING TO THE FUTURE
As impressive as our growth has been in fiscal 1994, we believe we have the
appropriate strategy and infrastructure to improve further in fiscal 1995. Our large
undeveloped acreage inventory, improving drilling technologies, and creative,
DRILLING MORE WELLS
IN THE GOLDEN TREND
Wells deIled per peer)
LOCATING DEEPER
RESERVES IN THE
GOLDEN TREND
)Averge depth
drilled ie Leer)
CHESAPEAKE ENERGY CORPORATION 11
92 93 94 95 )E)