Chesapeake Energy 1995 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 1995 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 57

  • 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
  • 53
  • 54
  • 55
  • 56
  • 57

LETTER TO SHAREHOLDERS
1995 i Achievements
During the year, Chesapeake:
Increased oil and natural gas production 215% to 32 Bcfe.
Increased total revenues 126% to $67.3 million.
Increased earnings 200% to $11.7 million and earnings per
share 161% to $0.94.
Tncreased operating cash flow 198% to $45.1 million.
Reduced operating costs (DD&A, lease operating expenses,
production taxes, and G&A) 30% to $1.04 per Mcfe.
Increased capital resources through a $90 million senior note
offering and expanded bank credit facilities.
COMPETITIVE ADVANTAGES
1b succeed in any industry, a company must have certain core competencies
which provide distinct competitive advantages. This is especially true in the
independent energy sector where more than 200 major and independent public
companies compete to find, develop, and produce oil and natural gas reserves.
We believe Chesapeake's five competitive advantages help explain how the
company has thrived during this challenging period in the energy industry.
GROWTH THROUGH THE DRILLBIT
We have chosen to build Chesapeake through our expertise with the drilibit
rather than by acquiring other companies' producing properties. We believe
this strategy makes Chesapeake fundamentally different and stronger than most
independent energy companies for three reasons.
CHESAPEAKE ENERGY CORPORATION
EARNINGS GROWTH
in thousands)
512,000
10,000
8,000
6.000
4,000
2,000
Chesapeake's earnings have
increased by a compound
growth rate of 90%...
AVERAGE OIL & GAS PRICES
($ per Mcfe)
0
91 92 93 94 95
Iii
91 92 93 94 95
despite a 33% commodity
price decline.
3
$3.25
3.00
2.75
2.50
2.25
2.00
1.7$
1.50
1.00
.50
0