Chesapeake Energy 2015 Annual Report Download - page 164

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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION – (Continued)
160
The following summary sets forth our future net cash flows relating to proved oil, natural gas and NGL reserves
based on the standardized measure:
Years Ended December 31,
2015 2014 2013
($ in millions)
Future cash inflows ............................................................................ $ 20,247 (a) $ 72,557 (b) $ 76,094 (c)
Future production costs ..................................................................... (7,391) (17,036) (18,196)
Future development costs.................................................................. (1,518) (7,556) (9,563)
Future income tax provisions ............................................................. (228) (12,494) (12,196)
Future net cash flows ......................................................................... 11,110 35,471 36,139
Less effect of a 10% discount factor .................................................. (6,417) (18,338) (18,749)
Standardized measure of discounted future net cash flows(d) ..... $ 4,693 $ 17,133 $ 17,390
___________________________________________
(a) Calculated using prices of $5.28 per bbl of oil and $2.58 per mcf of natural gas, before field differentials.
(b) Calculated using prices of $94.98 per bbl of oil and $4.35 per mcf of natural gas, before field differentials.
(c) Calculated using prices of $96.82 per bbl of oil and $3.67 per mcf of natural gas, before field differentials.
(d) Excludes future cash inflows attributable to production volumes sold to VPP buyers and includes future cash
outflows attributable to the costs of production. See Note 12.
The principal sources of change in the standardized measure of discounted future net cash flows are as follows:
Years Ended December 31,
2015 2014 2013
($ in millions)
Standardized measure, beginning of period(a) .............................................. $ 17,133 $ 17,390 $ 14,666
Sales of oil and natural gas produced, net of production costs and
gathering, processing and transportation(b) .......................................... (1,503) (5,722) (5,535)
Net changes in prices and production costs ........................................ (18,070) (634) 2,021
Extensions and discoveries, net of production and
development costs ............................................................................ 1,005 5,156 6,008
Changes in future development costs .................................................. 3,198 1,946 1,287
Development costs incurred during the period that reduced
future development costs .................................................................. 873 1,178 1,582
Revisions of previous quantity estimates ............................................. (3,472) (715) (805)
Purchase of reserves-in-place ............................................................. 1 215 26
Sales of reserves-in-place ................................................................... (938) (1,788) (1,976)
Accretion of discount ............................................................................ 2,201 2,168 1,777
Net change in income taxes ................................................................. 4,845 (593) (1,180)
Changes in production rates and other ................................................ (580) (1,468) (481)
Standardized measure, end of period(a)(c)(d) ................................................... $ 4,693 $ 17,133 $ 17,390
___________________________________________
(a) The impact of cash flow hedges has not been included in any of the periods presented.
(b) Excluding gains (losses) on derivatives.
(c) Effect of noncontrolling interest of the Chesapeake Granite Wash Trust is immaterial.
(d) The standardized measure of discounted future net cash flows does not include estimated future cash inflows
attributable to future production of VPP volumes sold and does include estimated future cash outflows attributable
to the costs of future production of VPP volumes sold.