Chesapeake Energy 2001 Annual Report Download - page 7

Key Operating Areas
Sahara
•167 bcfe of proved reserves
•44 mmcfe/d of production
•300+ bcfe of unbooked upside
Chesapeake’s Sahara project on the northwest
Anadarko Basin Shelf of Oklahoma remains one
of the company’s more active programs with 3-5
rigs generally in use. Encompassing all or portions
of Major, Woods, Woodward, Harper and Beaver
Counties, the Sahara project area has an enor-
mous resource base, having already produced
more than 7.6 tcfe since its discovery in the
1950’s. Chesapeake is by far the most active
operator in this field as a result of our dominant
land position of over 225,000 acres.
Primary objectives in this area are the
Pennsylvanian Morrow sands and the Chester
carbonates and sands, with additional potential
in the Pennsylvanian Tonkawa, Cottage Grove
and Red Fork sands and the Oswego lime. Typical
drilling depths are from 6,000’ to 8,500’ and
per-well reserves average about 0.6 bcfe. Finding
costs that remain consistently below $1.00 per
mcfe produce very attractive ROI’s.
Keys to success in this area are intensive geolog-
ical analysis of the multiple target formations,
aggressive land work and operational economies
of scale. Chesapeake operates over 600 wells
in this area and maintains a PUD inventory
of 200-300 locations out of a total of over 700
possible undrilled locations.
Watonga-Chickasha
•110 bcfe of proved reserves
•36 mmcfe/d of production
•100+ bcfe of unbooked upside
Located in the west-central Oklahoma counties
of Canadian, Blaine and Grady, the Watonga-
Chickasha Trend is one of the industry’s most pro-
lific gas fields, having produced 4.4 tcfe since
1960. Chesapeake acquired its initial foothold in
this area through the acquisition of Amoco’s
assets via the Gothic transactions in 1998
and 2001. Today the company is the most active
operator in the area, generally keeping 2-3 rigs
actively drilling.
Primary objectives in the Watonga-Chickasha
Trend are the Morrow and Springer sands. These
sands were deposited during early
Pennsylvanian time and subsequently uplifted
and truncated to the east and northeast resulting
in numerous Morrow and Springer subcrop traps
throughout the trend. Additional objectives
include other Pennsylvanian sands and pre-
Pennsylvanian Devonian and Ordovician carbon-
ates and sands.
Moreover, Chesapeake has also identified a large
number of pre-Pennsylvanian structural features
through the use of our 460 square miles of 3-D
seismic, of which 144 square miles is proprietary.
The deeper pre-Pennsylvanian stratigraphic
section in Watonga-Chickasha is virtually
unexplored and Chesapeake believes this deeper
portion of the Trend has tremendous upside.
Deep Anadarko
•240 bcfe of proved reserves
•34 mmcfe/d of production
•450+ bcfe of unbooked upside
The Deep Anadarko Basin, predominately located
in western Oklahoma, is the most prolific gas-
producing basin in the U.S., having produced
more than 100 tcfe of natural gas during the past
50 years. Starting with virtually no presence in
this area five years ago, Chesapeake today has
built one of the leading production and undevel-
oped leasehold positions in the Anadarko.
Chesapeake’s presence in the Anadarko is divid-
ed into three distinct areas: the Granite Wash
and Springer trends along the Mountain Front
area in Kiowa, Washita and Beckham Counties;
the Deep Morrow and Springer plays in Beckham
and Roger Mills Counties; and the ultra-deep
Hunton play in Beckham County.
In each of these areas, Chesapeake has carved
out a leading land and seismic inventory that is
driving an aggressive exploration program in
2002-03. During this time, the company expects
to drill up to 30 Anadarko wildcats that will target
more than 450 bcfe of unbooked reserve upside.
The signature asset for Chesapeake in the Deep
Anadarko is the company’s Comanche Lodge
prospect in the Deep Hunton play. Our initial
Comanche Lodge well, the Cat Creek 1-19,
recently reached total depth of 24,800’ and is
scheduled for testing during the second quarter.
Produced reserves from existing deep Hunton
fields exceed 2.1 tcfe, with average per well
recoveries of 28 bcfe and average field recoveries
of 304 bcfe.
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Sahara
Sahara
Deep
Anadarko
Deep
Anadarko
Watonga/
Chickasha
Watonga/
Chickasha
Oklahoma
Oklahoma