Chesapeake Energy 2010 Annual Report Download - page 97

For 2010, we realized an average price per mcf of natural gas of $5.57, compared to $5.93 in 2009 and
$8.09 in 2008 (weighted average prices for all years discussed exclude the effect of unrealized gains or losses
on derivatives). Included in the 2010 realized price of natural gas are gains related to swaps that had an above-
market fixed price on the origination date. We obtained these above-market swaps by selling out-year call
options on a portion of our projected natural gas and oil production. See Item 7A for a complete listing of all of
our derivative instruments. Oil prices realized per barrel (excluding unrealized gains or losses on derivatives)
were $62.71, $58.38 and $70.48 in 2010, 2009 and 2008, respectively. Realized gains or losses from our
natural gas and oil derivatives resulted in a net increase in natural gas and oil revenues of $2.056 billion, or
$1.99 per mcfe, in 2010, a net increase of $2.346 billion, or $2.59 per mcfe, in 2009 and a net decrease of $8
million, or $0.01 per mcfe, in 2008.
A change in natural gas and oil prices has a significant impact on our natural gas and oil revenues and
cash flows. Assuming 2010 production levels, an increase or decrease of $0.10 per mcf of natural gas sold
would result in an increase or decrease in 2010 revenues and cash flows of approximately $92 million and $89
million, respectively, and an increase or decrease of $1.00 per barrel of oil sold would result in an increase or
decrease in 2010 revenues and cash flows of approximately $18 million and $17 million, respectively, without
considering the effect of hedging activities.
The following tables show our production and prices by region for 2010, 2009 and 2008:
2010
Natural Gas Oil(a) Total
(bcf) ($/mcf)(b) (mmbbl) ($/bbl)(b) (bcfe) % ($/mcfe)(b)
Mid-Continent ............... 233.2 4.09 13.8 56.60 315.9 31% 5.49
Haynesville/Bossier Shale ..... 239.2 3.58 — — 239.2 23 3.58
Barnett Shale ............... 170.3 2.13 0.8 29.60 175.1 17 2.20
Fayetteville Shale ............ 136.8 3.15 — — 136.8 13 3.15
Permian and Delaware
Basins ................... 44.3 4.12 2.8 74.75 61.1 6 6.42
Marcellus Shale ............. 51.2 3.91 0.3 42.09 53.0 5 4.01
Eagle Ford Shale ............ 0.8 4.97 0.2 74.40 2.0 — 9.67
Rockies/Williston Basin ....... 0.6 3.17 0.1 71.17 1.2 — 7.50
Other ...................... 48.5 3.68 0.4 69.69 50.9 5 4.08
Total(c) ................. 924.9 3.43 18.4 58.67 1,035.2 100% 4.10
2009
Natural Gas Oil(a) Total
(bcf) ($/mcf)(b) (mmbbl) ($/bbl)(b) (bcfe) % ($/mcfe)(b)
Mid-Continent ............... 258.7 3.78 7.7 55.25 304.8 34% 4.60
Haynesville/Bossier Shale ..... 85.1 3.33 0.1 48.22 85.7 10 3.36
Barnett Shale ............... 237.8 2.11 0.1 69.85 238.4 25 2.12
Fayetteville Shale ............ 90.7 3.03 — — 90.7 10 3.03
Permian and Delaware
Basins ................... 56.2 3.51 3.0 57.26 74.2 8 4.98
Marcellus Shale ............. 21.9 4.30 — — 21.9 2 4.30
Eagle Ford Shale ............ — — — — — — —
Rockies/Williston Basin ....... 0.6 1.46 — — 0.6 1 1.46
Other ...................... 83.8 3.64 0.9 53.41 89.2 10 3.95
Total(c) ................. 834.8 3.16 11.8 55.60 905.5 100% 3.63
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