Chesapeake Energy 2015 Annual Report Download - page 37

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A deterioration in general economic, business or industry conditions would have a material adverse effect
on our results of operations, liquidity and financial condition.
In recent years, concerns over global economic conditions, energy costs, geopolitical issues, the availability and
cost of credit, and the U.S. real estate and financial markets have contributed to economic uncertainty and reduced
expectations for the global economy. Concerns about global economic growth have had a significant impact on global
financial markets and commodity prices. If the economic climate in the United States or abroad deteriorates, worldwide
demand for petroleum products could diminish, which could impact the price at which we can sell our production, affect
the ability of our vendors, suppliers and customers to continue operations and materially adversely impact our results
of operations, liquidity and financial condition.
Terrorist activities could materially and adversely affect our business and results of operations.
Terrorist attacks and the threat of terrorist attacks, whether domestic or foreign attacks, as well as military or other
actions taken in response to these acts, could cause instability in the global financial and energy markets. Continued
hostilities in the Middle East and the occurrence or threat of terrorist attacks in the United States or other countries
could adversely affect the global economy in unpredictable ways, including the disruption of energy supplies and
markets, increased volatility in commodity prices or the possibility that the infrastructure on which we rely could be a
direct target or an indirect casualty of an act of terrorism, and, in turn, could materially and adversely affect our business
and results of operations.
Negative public perception regarding us and/or our industry could have an adverse effect on our
operations.
Negative public perception regarding us and/or our industry resulting from, among other things, concerns raised
by advocacy groups about hydraulic fracturing, oil spills, and explosions of natural gas transmission lines may lead to
increased regulatory scrutiny, which may, in turn, lead to new state and federal safety and environmental laws,
regulations, guidelines and enforcement interpretations. These actions may cause operational delays or restrictions,
increased operating costs, additional regulatory burdens and increased risk of litigation. Moreover, governmental
authorities exercise considerable discretion in the timing and scope of permit issuance and the public may engage in
the permitting process, including through intervention in the courts. Negative public perception could cause the permits
we need to conduct our operations to be withheld, delayed, or burdened by requirements that restrict our ability to
profitably conduct our business.
We have limited control over the activities on properties we do not operate.
Other companies operate some of the properties in which we have an interest. For the year ended December
31, 2015, we did not operate approximately 8% of our daily production volumes. We have limited ability to influence
or control the operation or future development of these non-operated properties, including compliance with
environmental, safety and other regulations, or the amount of capital expenditures that we are required to fund with
respect to them. The failure of an operator of our wells to adequately perform operations, an operator's breach of the
applicable agreements or an operator's failure to act in ways that are in our best interest could reduce our production
and revenues. Our dependence on the operator and other working interest owners for these projects and our limited
ability to influence or control the operation and future development of these properties could materially adversely affect
the realization of our targeted returns on capital in drilling or acquisition activities and lead to unexpected future costs.
Our operations may be adversely affected by pipeline and gathering system capacity constraints.
In certain shale plays, the capacity of gathering systems and transportation pipelines is insufficient to accommodate
potential production from existing and new wells. We rely heavily on third parties to meet our oil, natural gas and NGL
gathering needs. Capital constraints could limit the construction of new pipelines and gathering systems by third parties,
and we may experience delays in building intrastate gathering systems necessary to transport our natural gas to
interstate pipelines. Until this new capacity is available, we may experience delays in producing and selling our oil,
natural gas and NGL. In such event, we might have to shut in our wells awaiting a pipeline connection or capacity and/
or sell oil, natural gas or NGL production at significantly lower prices than those quoted on NYMEX or than we currently
project, which would adversely affect our results of operations.