Chesapeake Energy 1999 Annual Report Download - page 33

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ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
The following table sets forth certain operating data of the Company for the periods presented:
Results of Operations
Years Ended December 31, 1999, 1998 and 1997
General. In 1999, the Company had net income of $33.3 million, or $0. 16 per diluted common share, on total
revenues of $354.9 million. This compares to a net loss of $933.9 million, or a loss of $9.97 per diluted common
share, on total revenues of $377.9 million during the year ended December 31, 1998 ("1998"), and a net loss of
$233.4 million, or a loss of $3.30 per diluted common share, on total revenues of $302.8 million during the year
ended December 31, 1997 ("1997"). The loss in 1998 was caused primarily by an $826.0 million oil and gas
property writedown recorded under the full-cost method of accounting and a $55.0 million writedown of other assets.
The loss in 1997 was caused primarily by a $346 million oil and gas property writedown. See "Impairment of Oil
and Gas Properties" and "Impairment of Other Assets".
Oil and Gas Sales. During 1999, oil and gas sales increased to $280.4 million versus $256.9 million in 1998 and
$198.4 million in 1997. In 1999, the Company produced 133.5 Bcfe at a weighted average price of $2.10 per Mcfe,
compared to 130.3 Bcfe produced in 1998 at aweighted average price of $1.97 per Mcfe, and 80.3 Bcfe produced in
1997 at a weighted average price of $2.47 per Mcfe.
The following table shows the Company's production by region for 1999, 1998 and 1997:
-23-
Natural gas production represented approximately 81% of the Company's total production volume on an
equivalent basis in 1999, compared to 72% in 1998 and 74% in 1997.
Years Ended
December 31,
1999 1998 1997
Net Production Data:
Oil (MBbI) 4,147 5,976 3,511
Gas (MMcf) 108,610 94,421 59,236
Gas equivalent (MMcfe) 133,492 130,277 80,302
Oil and Gas Sales (S in 000's):
Oil $66,413 $ 75,877 $ 68,079
Gas 214.032 181 010 130.331
Total oil and gas sales $ 280.445 $256,887 S 198.410
Average Sales Price:
Oil ($ per Bbl) $16.01 $12.70 $19.39
Gas ($ per Met) $1.97 $1.92 $2.20
Gas equivalent ($ per Mcfe) $2.10 $1.97 $2.47
Oil and Gas Costs (S per Mcfe):
Production expenses and taxes $.45 $.45 $.24
General and administrative $.10 $.15 $.14
Depreciation, depletion and amortization $.71 $1.13 $1.59
Net Wells Drilled:
Horizontal wells 11 20 69
Vertical wells 109 116 32
Net Wells at End of Period 2,242 2,405 401
For the Years Ended December 31,
1999 1998 1997
MMcfe Percent MMcfe Percent MMcfe Percent
Mid-Continent 69,946 52% 61,930 48% 17,685 22%
GulfCoast 44,822 34 52,793 40 60,662 76
Canada 11,737 97,746 6- -
All other areas 6,987 57,808 62
Total production 133.492 ..J00% 130 277 100% 80,302 100%