5. CHK and the Utica Shale, Fueling Ohio's Future, Mark Matusick, Chesapeake Energy

CHK & the Utica Shale Fueling Ohio’s Future Oil & Gas Business Development Seminar Presented April 11, 2012

Fueling the Future

Leading the industry one well at a time Leader in Production 2nd largest producer of U.S. natural gas & Top 15 producer of U.S. liquids

Leader in drilling #1 driller in the world of horizontal wells and horizontal shale wells Most active driller in the U.S. 164 operated rigs currently and ~102 non-operated rigs; collector of >15% of all daily drilling information generated in the U.S.

Leader in Employment >13,000 Employees in 17 states and the District of Columbia FORTUNE “100 Best Companies to Work For®” in the U.S for the fifth consecutive year.

Ranked #18 in 2012

Leader in Exploration In past 4 years, discovered 5 of America’s best unconventional plays Utica Shale ● Granite Wash ● Mississippi Lime ● Haynesville Shale ● Tonkawa Tight Sand

Leader in asset monetization Seven joint ventures, two complete play sales and nine VPPs for proceeds of >$28 billion

Leader in Vertical Integration Provides a hedge against higher service costs and enhances CHK profitability Ensures access to critical services, greater operational efficiencies and improves safety Provides confidence to JV partners in CHK’s ability to accelerate drilling and enhance returns

CHK’s track record of leadership and achievements during the past 22 years has been unique and has positioned the company for superior performance for years to come

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Energy Independence

Ending America’s dependence on foreign oil

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CHK’s Operating Areas

Low-risk, U.S. onshore asset base; not exposed to economic, geopolitical or technological risks Internationally or in the Gulf of Mexico

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The Utica Shale

Rejuvenating the Buckeye State ~ 1.5 – 2.0 miles below the surface of parts of Ohio, Pennsylvania & New York CHK has #1 position in Utica Shale ~1.4 million net acres

Chesapeake investment in Ohio1 ~$2 billion in leasehold bonus payments >$ ½ billion paid to Ohio suppliers & vendors

A partnership between CHK & Ohio Land Owners CHK has expertise & capital to produce and market resources Royalty payments to land owners from produced resources for life of the well (could be more than 50 years) 1

Last 5 years, through March 1, 2012

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The Process

Delivering resources from the ground to market Multiple Stages of Operation Process Leasing Site Development Site Construction Drilling Completion Production Transportation Compressor Stations & Oil Terminals Pipeline Construction Royalty Payments Reclamation

Process details, videos & animations can be found in our Educational Library located under media link at chk.com

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Protecting the Environment

Preserving the country’s beauty for future generations

Environmental Energy Footprint Comparison

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Protecting the Environment Advancements in Horizontal Drilling

Typical, 1,280 acre idealized unit 85% Less surface disruption, fewer well constructions, More Economically Efficient

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Protecting the Environment Water Efficient Power Generation

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Economic Impact & the Supply Chain Oil & Gas Business Development Seminar Presented April 11, 2012

This information is provided solely for the purpose of generating discussion & sharing industry terms to this specific audience. The presenter is not an economist, nor is this presentation intended to influence any business decisions that you may or may not make.

Global to Local Supply Chain GLOBAL

NATIONAL

REGIONAL

LOCAL

How can local residents & businesses maximize their role in the O&G supply Chain?

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Common examples of resource supply to typical shale play GLOBAL

E&P Company(s) Financing / JV’s Technology Oil Field Services Sales Market

NATIONAL

Capital Investment Senior Management Oil Field Services Technology & Science Professional Services

REGIONAL

Mid Management Oil Field Resources Indirect Resources Experienced Labor

LOCAL

Land Natural Resources Management Experienced Labor Trainable Labor Indirect Resources Induced Resources

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Economic & Supply Chain Impact How is Economic Impact Measured?

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DIRECT – Economic Impact JOBS ● LABOR INCOME ● VALUE ADDED Within the oil and natural gas industry.

Chart based upon North American Industry Classification System (NAICS)

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INDIRECT – Economic Impact JOBS ● LABOR INCOME ● VALUE ADDED Within the OTHER Industries.

That provide goods or services to the Oil & Natural Gas Industry

Who will recognize Indirect Economic Impact? Ohio Land Owners Site Construction (Excavation, fencing, landscaping, etc) Equipment Sales & Repair Transportation (Rail, Trucking, etc.) Steel, Aggregate, Sand, Water & other raw materials Professional service (Engineering, Legal, etc.) Federal, State & Local governments Retail Outlets - Caterers – Dry Cleaners – Office Supply – Commercial Cleaning – Hotels – Automotive repair – Commercial Real Estate – Insurance – Refuse & Recycling Cellular Telephones & Mobile Devices – Corporate Housing – Automobiles , countless others.

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INDUCED – Economic Impact JOBS ● LABOR INCOME ● VALUE ADDED Resulted from Household Spending of Employee Wages Earned either directly or indirectly from the Oil & Natural Gas Industry’s spending

•Home & Home Improvements •Banking & Investments •Groceries & Household Goods •Automobiles & Auto Repair •Education & Higher Learning •Vacations & Luxury Items •Much more!

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Sample of Induced Impact The following is an example of the induced impact of the Bonus and Royalty payments for a typical Marcellus Royalty Owner.

Source - Marcellus Shale Education & Training Center (MSETC) August 2011 study titled Economic Impacts of Marcellus Shale in Pennsylvania:

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The Vendor Process Master Service Agreement (MSA) Oil & Gas Business Development Seminar Presented April 11, 2012

MSA Qualifications Vendors/Contractors on any Chesapeake location at any time and/or during the course of operations include, but are not limited to: Operations: Drilling, Construction, Equipment Rental/Repair, Electrical Services, etc. Distribution of Materials or Equipment: Supply Companies utilizing 3rd Party Trucking/Freight companies i.e. Fed-Ex or UPS Trucking Companies-: Winch Trucks, Hot Shot Services, Disposal/Hauling of *Hazardous Substances, etc.

Professional Ser vices: Consulting, Engineering, Surveying, Inspection Services, General Supervision, Security, Training, etc.

General (Building Upkeep) Ser vices at Location: Lawn Maintenance, Janitorial Services, PHAC, Painting, Catering,, Fencing, etc.

*Any substance which is or becomes defined as ‘hazardous substance’, pollutant or contaminant and requires investigation or remediation under any federal, state or local statute or regulation. The presence of any substance on the property causes or threatens to cause a nuisance upon the property or to adjacent properties, or poses or threatens to pose a hazard to the health or safety of persons on or about the property, or could constitute trespass on adjacent properties, that contain but not limited to gasoline, diesel fuel, petroleum hydrocarbons.

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New Vendor Request An operational need must be demonstrated!

1. A Chesapeake Field Representative must initiate 2. District Manager Approval of that Region 3. MSA Form Distribution, request of OSHA Logs & ISNetworld® Information 4. Environmental Health & Safety (EH&S) Approval 5. Risk Management distribute the MSA to the Contractor to begin the MSA approval process. All insurance requirements set forth in the Master Service Agreement must be met before the agreement is executed and the vendor is placed on the Approved Vendors List. Including but not limited to: General Liability - Automobile - Workers Compensation

Prospective Vendors wishing to submit company information for review can do so at: AskChesapeake.com > CONTACT US > Utica Shale

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ISNetworld

®

3rd Party service commonly utilized by industry for the verification and assessment of Risk Management criteria Review and verification Ser vice (RAVS) reviews and – Written safety programs – Training Documents verifies: – Accident/Incident reports – EMR Certificates – Workers Comp Clearance Letters – Workers Comp Rate Sheets

– Insurance Certificates – Citation/Prosecution Search – Supplier Diversity Certificates

ISNetworld receives applicable third-par ty provider data: – Audits – Training – Operator Qualifications – Drug & Alcohol and Background Checks

ISNetworld.com for details

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Questions?

For more information:

Information provided is subject to change based on multiple factors