Chesapeake Energy 1995 Annual Report Download - page 16

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NEW OPERATING AREAS
ARKOMA JACKFORK
In fIscal 1995, Chesapeake initiated a seismic and leasehold acquisition program
in the Jackfork area of the Arkoma Basin of southeastern Oklahoma, the state's
second largest gas basin. The Jackfork is a 50,000 gross acre prospect located in
the southern portion of the Arkoma, a deeper and more geologically complex
area that has been less heavily explored than the updip northern portion.
Chesapeake developed this prospect on the belief that recent developments
in 2-D and 3-D seismic technology could identify large thrust sheets in the
Jackfork formation which had been previously difficult to image using
traditional 2-D seismic technology. The Jackfork prospect is targeting gas
reserves from multiple payzones at depths from 8,000 to 15,000 feet. As of
September 30, 1995, the company had drilled three Arkoma wells and was
drilling three additional wells. Chesapeake has budgeted $5 million to drill eight
gross (four net) wells during fiscal 1996.
PERMIAN BASIN
In fiscal 1995, Chesapeake initiated two new projects in the Permian Basin. The
first is the Lovington Project in Lea County; New Mexico. In this area, the
company is utilizing 3-D seismic technology to search for algal mound buildups
that management believes have been overlooked in this portion of the Permian
Basin because of inconclusive results provided by traditional 2-D seismic
technology.
Using this new technology, Chesapeake has identified approximately 25
prospects in the Lovington Project and is currently acquiring leasehold rights for
these prospects. The company is targeting oil reserves at depths from 11,000 to
13,000 feet in the project area. Chesapeake has budgeted $2 million for seismic
acquistion and for drilling its first well in the second quarter of fiscal 1996.
Chesapeake's second project area in the Permian Basin is the Haley Deep
Prospect in Winkler County; Texas. In this 4,500 gross acre prospect,
Chesapeake is drilling a 21,000 foot Ellenburger exploratory well to an untested
fault block. Chesapeake is the operator and owns a 30% working interest, Mobil
owns 40%, and two private companies own the remaining 30%. Chesapeake has
budgeted $1 million in fiscal 1996 for its share of drilling the initial well.
ARKOMA JACKFORK
50000 Acre Inventory
50 Undrilled Locations (11 Proven)
3 Producing Wells
Perinian Basin
Lovington (3D)
Haley Deep
MIDLAND, TX
14 CHESAPEAKE ENERGY CORPORATION