Chesapeake Energy 2015 Annual Report Download - page 45

Download and view the complete annual report

Please find page 45 of the 2015 Chesapeake Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 175

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175

41
Years Ended December 31,
2015 2014 2013
Other Operating Income(d) ($ in millions):
Marketing, gathering and compression net margin(e) ................................ $ 243 $ (11) $ 98
Oilfield services net margin ....................................................................... $ — $ 115 $ 159
Expenses ($ per boe):
Oil, natural gas and NGL production ......................................................... $ 4.22 $ 4.69 $ 4.74
Oil, natural gas and NGL gathering, processing and transportation......... $ 8.55 $ 8.43 $ 6.44
Production taxes ....................................................................................... $ 0.40 $ 0.90 $ 0.94
General and administrative(f) ..................................................................... $ 0.95 $ 1.25 $ 1.86
Oil, natural gas and NGL depreciation, depletion and amortization .......... $ 8.47 $ 10.41 $ 10.59
Depreciation and amortization of other assets .......................................... $ 0.53 $ 0.90 $ 1.28
Interest expense(g) ..................................................................................... $ 1.30 $ 0.63 $ 0.65
Interest Expense ($ in millions):
Interest expense ....................................................................................... $ 329 $ 173 $ 169
Interest rate derivatives – realized (gains) losses(h) .................................. $ (6) $ (12) $ (9)
Interest rate derivatives – unrealized (gains) losses(h) .............................. $ (6) $ (72) $ 67
Total interest expense .................................................................... $ 317 $ 89 $ 227
___________________________________________
(a) Oil equivalent is based on six mcf of natural gas to one barrel of oil or one barrel of NGL. This ratio reflects an
energy content equivalency and not a price or revenue equivalency.
(b) Beginning in the 2015 fourth quarter, we have reclassified our presentation of third party oil, natural gas and NGL
gathering, processing and transportation costs to report the costs as a component of operating expenses in the
accompanying statements of operations. Previously, these costs were reflected as deductions to oil, natural gas
and NGL sales. The net effect of this reclassification did not impact our previously reported net income,
stockholders’ equity or cash flows; however, previously reported oil, natural gas and NGL sales and consequently
total revenues have increased from the previously reported, and total operating expenses have increased by
these same amounts. For additional information regarding this reclassification, see Note 1 of the notes to our
consolidated financial statements included in Item 8 of this report.
(c) Realized gains (losses) include the following items: (i) settlements of undesignated derivatives related to current
period production revenues, (ii) prior period settlements for option premiums and for early-terminated derivatives
originally scheduled to settle against current period production revenues, and (iii) gains (losses) related to de-
designated cash flow hedges originally designated to settle against current period production revenues. Unrealized
gains (losses) include the change in fair value of open derivatives scheduled to settle against future period
production revenues offset by amounts reclassified as realized gains (losses) during the period.
(d) Includes revenue and operating costs. See Depreciation and Amortization of Other Assets under Results of
Operations for details of the depreciation and amortization associated with our marketing, gathering and
compression and former oilfield services operating segments.
(e) For the year ended December 31, 2015, we recorded unrealized gains of $296 million on the fair value of our
supply contract derivatives. See Note 11 of the notes to our consolidated financial statements included in Item 8
of Part I of this report for discussion related to these instruments.
(f) Includes share-based compensation but excludes restructuring and other termination costs.
(g) Includes the effects of realized (gains) losses from interest rate derivatives, excludes the effects of unrealized
(gains) losses from interest rate derivatives and is shown net of amounts capitalized.
(h) Realized (gains) losses include settlements related to the current period interest accrual and the effect of (gains)
losses on early-terminated trades. Settlements of early-terminated trades are reflected in realized (gains) losses
over the original life of the hedged item. Unrealized (gains) losses include changes in the fair value of open interest
rate derivatives offset by amounts reclassified to realized (gains) losses during the period.