Chesapeake Energy 2012 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2012 Chesapeake Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 196

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196

61
A change in natural gas, oil and NGL prices has a significant impact on our revenues and cash flows. Assuming
the 2012 production levels, an increase or decrease of $0.10 per mcf of natural gas sold would result in an increase
or decrease in 2012 revenues and cash flows of approximately $113 million and $110 million, respectively, and an
increase or decrease of $1.00 per barrel of liquids sold would result in an increase or decrease in 2012 revenues and
cash flows of approximately $49 million and $47 million, respectively, without considering the effect of hedging activities.
The following tables show our production and average sales prices received by operating division for 2012, 2011
and 2010:
2012
Natural Gas Oil NGL Total
(bcf) ($/mcf)(a) (mmbbl) ($/bbl)(a) (mmbbl) ($/bbl)(a) (bcfe) % ($/mcfe)(a)
Southern(b) 611.2 1.65 1.8 95.45 1.5 28.35 631.1 44 1.94
Northern 205.1 2.16 14.6 88.74 10.8 28.40 357.7 25 5.72
Eastern(c) 260.1 1.94 0.5 78.67 1.7 39.19 273.1 20 2.23
Western(d) 52.4 0.92 14.4 91.92 3.6 30.60 160.2 11 9.24
Total(e) 1,128.8 1.77 31.3 90.45 17.6 29.89 1,422.1 100% 3.77
2011
Natural Gas Oil NGL Total
(bcf) ($/mcf)(a) (mmbbl) ($/bbl)(a) (mmbbl) ($/bbl)(a) (bcfe) % ($/mcfe)(a)
Southern(b) 554.7 2.83 0.1 108.15 1.1 36.63 561.8 47 2.89
Northern 258.2 3.55 10.2 90.03 10.6 40.26 383.0 32 5.90
Eastern(c) 135.8 3.27 0.3 79.90 1.2 55.44 144.8 12 3.69
Western(d) 55.4 3.58 6.4 89.68 1.8 37.46 104.6 9 8.05
Total(e) 1,004.1 3.12 17.0 89.90 14.7 40.96 1,194.2 100% 4.40
2010
Natural Gas Oil NGL Total
(bcf) ($/mcf)(a) (mmbbl) ($/bbl)(a) (mmbbl) ($/bbl)(a) (bcfe) % ($/mcfe)(a)
Southern(b) 418.6 2.97 0.1 82.79 0.7 27.82 423.5 42 2.99
Northern 368.8 3.71 7.4 75.11 6.3 34.84 451.3 43 4.76
Eastern(c) 74.1 3.91 0.2 66.41 0.3 35.17 76.7 7 4.07
Western(d) 63.4 1.25 3.2 76.07 0.1 32.04 83.7 8 6.23
Total(e) 924.9 3.43 10.9 75.29 7.4 34.38 1,035.2 100% 4.10
___________________________________________
(a) The average sales price excludes gains (losses) on derivatives.
(b) Our Barnett Shale production is concentrated in urban areas where the cost to develop the necessary infrastructure
to gather and deliver the natural gas to intrastate pipelines significantly exceeds the cost of similar infrastructure
in non-urban areas. Additionally, the rapid development of the Barnett Shale required the construction of new
pipelines to provide an adequate market for these new gas reserves. In order to support the timely construction
of these new pipelines, we entered into firm transportation contracts that have resulted in lower natural gas price
realizations in the Barnett Shale than in our other major natural gas plays.
(c) Our Eastern division primarily includes the Marcellus Shale, which held approximately 23% of our estimated
proved reserves by volume as of December 31, 2012. Production for the Marcellus Shale for the years ended
2012, 2011 and 2010 was 243.3 bcfe, 121.1 bcfe and 52.9 bcfe, respectively.