Chesapeake Energy 2010 Annual Report Download - page 68

Conventional Reserves. Natural gas and oil occurring as discrete accumulations in structural and
stratigraphic traps.
Developed Acreage. The number of acres which are allocated or assignable to producing wells or wells
capable of production.
Development Well. A well drilled within the proved area of an oil or natural gas reservoir to the depth of a
stratigraphic horizon known to be productive.
Drilling Carry Obligation. An obligation of one party to pay certain well costs attributable to another party.
Dry Hole; Dry Well. A well found to be incapable of producing either oil or natural gas in sufficient
quantities to justify completion as a natural gas or oil well.
Exploratory Well. A well drilled to find a new field or to find a new reservoir in a field previously found to be
productive of natural gas or oil in another reservoir.
Farmout. An assignment of an interest in a drilling location and related acreage conditional upon the
drilling of a well on that location.
Formation. A succession of sedimentary beds that were deposited under the same general geologic
conditions.
Full-Cost Pool. The full-cost pool consists of all costs associated with property acquisition, exploration and
development activities for a company using the full-cost method of accounting. Additionally, any internal costs
that can be directly identified with acquisition, exploration and development activities are included. Any costs
related to production, general corporate overhead or similar activities are not included.
Gross Acres or Gross Wells. The total acres or wells, as the case may be, in which a working interest is
owned.
Horizontal Wells. Wells which are drilled at angles greater than 70 degrees from vertical.
Infill Drilling. Drilling wells between established producing wells on a lease; a drilling program to reduce
the spacing between wells in order to increase production and/or recovery of in-place hydrocarbons from the
lease.
Karst. An area of irregular limestone in which erosion has produced fissures, sinkholes, underground
streams and caverns.
Mbbl. One thousand barrels of crude oil or other liquid hydrocarbons.
Mbtu. One thousand btus.
Mcf. One thousand cubic feet.
Mcfe. One thousand cubic feet of natural gas equivalent.
Mmbbl. One million barrels of crude oil or other liquid hydrocarbons.
Mmbtu. One million btus.
Mmcf. One million cubic feet.
Mmcfe. One million cubic feet of natural gas equivalent.
Natural Gas Liquids (NGL). Those hydrocarbons in natural gas that are separated from the gas as liquids
through the process of absorption, condensation, adsorption or other methods in gas processing or cycling
plants. Natural gas liquids primarily include ethane, propane, butane, isobutene, pentane, hexane and natural
gasoline.
Net Acres or Net Wells. The sum of the fractional working interests owned in gross acres or gross wells.
NYMEX. New York Mercantile Exchange.
Play. A term applied to a portion of the exploration and production cycle following the identification by
geologists and geophysicists of areas with potential natural gas and oil reserves.
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