Chesapeake Energy 2015 Annual Report Download - page 159

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION – (Continued)
155
Supplemental Disclosures About Oil, Natural Gas and NGL Producing Activities (unaudited)
Net Capitalized Costs
Capitalized costs related to Chesapeake's oil, natural gas and NGL producing activities are summarized as follows:
December 31,
2015 2014
($ in millions)
Oil and oil and natural gas properties:
Proved ........................................................................................................................ $ 63,843 $ 58,594
Unproved .................................................................................................................... 6,798 9,788
Total ...................................................................................................................... 70,641 68,382
Less accumulated depreciation, depletion and amortization ........................................ (58,552) (38,238)
Net capitalized costs ............................................................................................ $ 12,089 $ 30,144
Unproved properties not subject to amortization as of December 31, 2015, 2014 and 2013 consisted mainly of
leasehold acquired through direct purchases of significant oil and natural gas property interests. We capitalized
approximately $410 million, $604 million and $815 million of interest during 2015, 2014 and 2013, respectively, on
significant investments in unproved properties that were not yet included in the amortization base of the full cost pool.
We will continue to evaluate our unproved properties, and although the timing of the ultimate evaluation or disposition
of the properties cannot be determined, we can expect the majority of our unproved properties not held by production
to be transferred into the amortization base over the next five years.
Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development
Costs incurred in oil and natural gas property acquisition, exploration and development activities which have been
capitalized are summarized as follows:
Years Ended December 31,
2015 2014 2013
($ in millions)
Acquisition of Properties:
Proved properties ................................................................................ $ — $ 214 $ 22
Unproved properties ............................................................................ 454 1,224 997
Exploratory costs ..................................................................................... 112 421 699
Development costs .................................................................................. 2,941 4,204 4,888
Costs incurred(a)(b) ......................................................................... $ 3,507 $ 6,063 $ 6,606
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(a) Exploratory and development costs are net of $51 million, $679 million and $884 million in drilling and completion
carries received from our joint venture partners during 2015, 2014 and 2013, respectively.
(b) Includes capitalized interest and asset retirement obligations as follows:
Capitalized interest ........................................................................... $ 410 $ 604 $ 815
Asset retirement obligations ............................................................. $ (15) $ 39 $ 7
In 2015, we invested approximately $720 million, net of drilling and completion cost carries of $18 million, to
convert 67 mmboe of PUDs to proved developed reserves.