Chesapeake Energy 1996 Annual Report Download - page 20

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PRIMARY OPERATING AREAS
Louisiana Austin Chalk Trend
TheLouisiana Trend is the new-
est of Chesapeake's three pri-
mary operating areas and will
be central to the company's explora-
tion and development activities for
the foreseeable future. In late 1994,
Occidental Petroleum Corporation
announced the completion of a hori-
zontal Austin Chalk well in central
Louisiana. This well, a rank wildcat
drilled more than 200 miles east of
the downdip Giddings area, alerted
the industry to the Masters Creek area
as a location of potentially large Aus-
tin Chalk reserves.
The success of Occidental's well
and the information provided by over
225 penetrations of the Austin Chalk
in Louisiana by older vertical wells
confirmed Chesapeake's geological
and engineering hypothesis: signifi-
cant quantities of oil and natural gas
reserves could be economically ex-
tracted from deep horizontal wells in
the Louisiana Austin Chalk Trend.
Because of our advanced geologi-
cal understanding of the Austin
Chalk and our entrepreneurial cul-
CHESAPEAKE ENERGY CORPORATION
ture, Chesapeake moved more
quickly than its competitors to accu-
mulate high quality acreage within
this trend. Now, some 18 months
later, Chesapeake is the leading lease-
hold owner in the Louisiana Trend
with over one million acres. The
company's early entry and aggressive
acquisition program enabled our land
AREAS OF OPERATION
department to acquire the Louisiana
Trend acreage at an average cost of
only $125 per acre, less than 20% of
its estimated replacement cost.
Chesapeake's rapid response to the
opportunity presented by the discov-
ery of significant quantities of oil and
natural gas in the Louisiana Austin
Chalk has provided the company