Chesapeake Energy 2010 Annual Report Download - page 155
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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
10. Supplemental Disclosures About Natural Gas and Oil Producing Activities
Net Capitalized Costs
Evaluated and unevaluated capitalized costs related to Chesapeake’s natural gas and oil producing
activities are summarized as follows:
December 31,
2010 2009
($ in millions)
Natural gas and oil properties:
Proved ............................................................. $ 38,952 $ 35,007
Unproved ........................................................... 14,469 10,005
Total ............................................................. 53,421 45,012
Less accumulated depreciation, depletion and amortization .................. (25,595) (24,220)
Net capitalized costs .................................................. $ 27,826 $ 20,792
Unproved properties not subject to amortization at December 31, 2010, 2009 and 2008 consisted mainly of
leasehold acquired through corporate and significant natural gas and oil property acquisitions and through
direct purchases of leasehold. We capitalized approximately $711 million, $627 million and $585 million of
interest during 2010, 2009 and 2008, respectively, on significant investments in unproved properties that were
not yet included in the amortization base of the full-cost pool. We will continue to evaluate our unproved
properties and seismic projects; however, the timing of the ultimate evaluation and disposition of the properties
has not been determined.
The table below sets forth the cost of unproved properties excluded from the amortization base as of
December 31, 2010 and notes the year in which the associated costs were incurred:
Year of Acquisition
2010 2009 2008 Prior Total
($ in millions)
Leasehold acquisition cost .................... $ 5,619 $ 1,634 $ 3,992 $ 1,157 $ 12,402
Exploration cost ............................. 526 42 81 56 705
Capitalized interest ........................... 617 180 438 127 1,362
Total ............................... $ 6,762 $ 1,856 $ 4,511 $ 1,340 $ 14,469
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