Chesapeake Energy 2014 Annual Report Download - page 55

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Uses of Funds
The following table presents the uses of our cash and cash equivalents for 2014, 2013 and 2012:
Years Ended December 31,
2014 2013 2012
($ in millions)
Oil and Natural Gas Expenditures:
Drilling and completion costs(a) $ 4,495 $ 5,490 $ 8,707
Acquisitions of proved and unproved properties 758 302 2,385
Geological and geophysical costs 35 33 170
Interest capitalized on unproved properties 604 811 829
Total Oil and Natural Gas Expenditures 5,892 6,636 12,091
Other Uses of Cash and Cash Equivalents:
Cash paid to repurchase debt 3,362 2,141 4,000
Additions to other property and equipment 227 732 2,615
Payments on credit facility borrowings, net 382 13 1,332
Cash paid to purchase leased rigs and compressors 499 240 36
Cash paid for prepayment of mortgage — 55 —
Cash paid to purchase preferred shares of subsidiary 1,254 212 —
Dividends paid 405 404 398
Distributions to noncontrolling interest owners 173 215 218
Cash paid to extinguish other financing — 141 —
Cash paid for financing derivatives(b) 53 91 37
Additions to investments 17 44 395
Other 45 105 474
Total Other Uses of Cash and Cash Equivalents 6,417 4,393 9,505
Total Uses of Cash and Cash Equivalents $ 12,309 $ 11,029 $ 21,596
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(a) Net of $679 million, $884 million and $784 million in drilling and completion carries received from our joint venture
partners during 2014, 2013 and 2012, respectively.
(b) Reflects derivatives deemed to contain, for accounting purposes, a significant financing element at contract
inception.
Our primary use of funds is for capital expenditures for drilling and completion costs on our oil and natural gas
properties. Historically, a significant use was also for the acquisition of leasehold and construction and acquisition of
other property and equipment. During 2014, our average operated rig count was 64 rigs compared to an average rig
count of 71 operated rigs in 2013 and 131 operated rigs in 2012.
Our proved and unproved property acquisition costs were $758 million in 2014 compared to $302 million in 2013
and $2.385 billion in 2012. The increase in 2014 compared to 2013 was primarily due to the Powder River Basin
transaction discussed in 2014 Strategic Transactions. Through 2012, we invested heavily in proved and unproved
properties and now hold a substantial inventory of resources that provide a foundation for future growth.
Capital expenditures related to our midstream, oilfield services and other fixed assets were $227 million in 2014
compared to $732 million in 2013 and $2.615 billion in 2012, respectively. The reduction of these expenditures in 2014
as compared to 2013 and 2012 is primarily the result of the spin-off of our oilfield services business, divestiture of our
midstream and gathering business and reductions in construction expenditures on our corporate headquarters and
field offices.
In 2014, we used $3.362 billion of cash to reduce debt. For a discussion of the debt repaid, see 2014 Refinancings
above.