Chesapeake Energy 2013 Annual Report Download - page 161

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION – (Continued)
153
Supplemental Disclosures About Natural Gas, Oil and NGL Producing Activities (unaudited)
Net Capitalized Costs
Capitalized costs related to Chesapeake's natural gas, oil and NGL producing activities are summarized as follows:
December 31,
2013 2012
($ in millions)
Natural gas and oil properties:
Proved .......................................................................................................................... $ 56,157 $ 50,172
Unproved ...................................................................................................................... 12,013 14,755
Total .......................................................................................................................... 68,170 64,927
Less accumulated depreciation, depletion and amortization ........................................ (35,577) (33,009)
Net capitalized costs .................................................................................................... $ 32,593 $ 31,918
Unproved properties not subject to amortization at December 31, 2013, 2012 and 2011 consisted mainly of
leasehold acquired through direct purchases of significant natural gas and oil property interests. We capitalized
approximately $815 million, $976 million and $727 million of interest during 2013, 2012 and 2011, respectively, on
significant investments in unproved properties that were not yet included in the amortization base of the full cost pool.
We will continue to evaluate our unproved properties, and although the timing of the ultimate evaluation or disposition
of the properties cannot be determined, we can expect the majority of our unproved properties not held by production
to be transferred into the amortization base over the next five years.
Costs Incurred in Natural Gas and Oil Property Acquisition, Exploration and Development
Costs incurred in natural gas and oil property acquisition, exploration and development activities which have been
capitalized are summarized as follows:
Years Ended December 31,
2013 2012 2011
($ in millions)
Acquisitions of properties:
Proved properties .................................................................................. $ 22 $ 332 $ 48
Unproved properties .............................................................................. 997 2,981 4,736
Exploratory costs ..................................................................................... 699 2,353 2,261
Development costs .................................................................................. 4,888 6,733 5,497
Costs incurred(a)(b) .............................................................................. $ 6,606 $ 12,399 $ 12,542
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(a) Exploratory and development costs are net of joint venture drilling and completion cost carries of $884 million,
$784 million and $2.570 billion in 2013, 2012 and 2011, respectively.
(b) Includes capitalized interest and asset retirement cost as follows:
Capitalized interest .................................................................................. $ 815 $ 976 $ 727
Asset retirement obligations ..................................................................... $ 7 $ 32 $ 3
In 2013, we invested approximately $1.472 billion, net of drilling and completion cost carries of $79 million, to
convert 169 mmboe of PUDs to proved developed reserves.