Chesapeake Energy 2009 Annual Report Download - page 12

10 CHESAPEAKE ENERGY CORPORATION
CLEAN The growing
number of natural gas-
powered electrical generation
plants is testimony to their
environmental and economic
advantages.
AFFORDABLE Consumers
filling their tanks with com-
pressed natural gas (CNG)
often save 50% over the cost
of gasoline.
ABUNDANT Natural gas
pipelines transport Ameri-
ca into the “Age of Natural
Gas” with almost a 200-year
supply.
AMERICAN Workers
like Aaron Harris, Nomac
Derrickman, help supply ap-
proximately 90% of America’s
natural gas needs from domes-
tic sources.
AMERICAN
ABUNDANTAFFORDABLE
returns of 100–150% and generally reach payout in less
than a year.
We are already producing from approximately 100
net Granite Wash wells and estimate we could drill
up to 1,200 additional net wells on our 190,000 net
acres of leasehold in the years ahead. Based on cur-
rent NYMEX futures prices for natural gas and oil, each
Granite Wash well should generate approximately
$8–11 million of present value per well (or $10–13 bil-
lion for all 1,200 wells), making it obvious that finding,
leasing and developing more oil plays with Granite
Wash-type returns will be Chesapeake’s number one
priority for 2010.
OUR PEOPLE
Great assets would not and cannot exist with-
out great people, so we take great pride in hiring,
training, motivating, rewarding and retaining great
people. From our beginning 20 years ago with 10
employees in Oklahoma to employing 8,600 people
in 16 states today, Chesapeake has always focused on
GRANITE WASH PLAYS
The Colony and Texas Panhandle Granite Wash plays
provide insight into what could happen if Chesa-
peake is successful in finding new unconventional
oil plays. As good as the per-well Big 6 gas shale
economics are, the economics are even better in the
Colony Wash and Texas Panhandle Granite Wash plays
because they possess the best of both worlds: high-
volume natural gas production as in the Big 6 gas shale
plays, along with significant volumes of oil and natu-
ral gas liquids that dramatically increase investment
returns. For example, while our per-well economics for
Big 6 shale wells generally provide returns of 20–60%,
wells drilled in these two Granite Wash plays provide
We are already producing from approximately 100 net Granite
Wash wells and estimate we could drill up to 1,200 additional net
wells on our 190,000 net acres of leasehold in the years ahead.
CLEAN
ANGA: A NEW NATIONAL VOICE FOR NATURAL GAS
In March 2009, Chesapeake joined with a group of the nation’s leading independent
producers to create one dynamic voice for increasing demand for American natural gas.
The mission of America’s Natural Gas Alliance (ANGA) is to increase understanding and
appreciation for the environmental, economic and national security benefits of clean, abun-
dant, dependable and cost-efficient American natural gas. Its 34 members represent more
than 40% of the total U.S. natural gas supply, producing about nine trillion cubic feet per year.
Chesapeake has long been a champion for natural gas. We are proud to be a founding
member of ANGA and share its core belief that America’s clean energy future
will increasingly be fueled by the enormous domestic natural gas resources now
available to generate electricity, power industry, provide energy for heating and
cooking, and offer a cleaner, more affordable fuel for transportation vehicles.
For more information, please visit www.anga.us.