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into a five year drilling and acquisitions participation agreement with Gothic. As part of the transactions, Gothic transferred to Chesapeake approximately 30 Bcfe of proved undeveloped reserves. The transaction has an effective date of January 1, 1998, and is scheduled to close in late April 1998. In March 1998, Chesapeake agreed to acquire approximately 35 Bcfe of estimated proved reserves in the Mid-Continent Region from two parties for $34 million. The properties are 85% natural gas and have an estimated reserves-to-production index of 10 years. The transactions have an effective date of January 1, 1998, and are scheduled to close in May 1998.

Drilling Activity The following table sets forth the wells drilled by the Company during the periods indicated. In the table, "gross" refers to the total wells in which the Company has a working interest and "het" refers to gross wells multiplied by the Company's working interest therein. Six Months Ended December 31, 1997 Gross Net

1997 Gross Net

Year Ended June 30, 1996 1995 Gross Net Gross Net

Development: Productive ................... Non-productive ...............

55 1 -

24.4 .3

90 2

55.0 .2

111 4 -

49.5 1.6

133 5

42.6 2.8

Total ........................

56

24.7

92

55.2

115

51.1

138

45.4

Exploratory: Productive ................... Non-productive ...............

28 2

15.5 0.9

71 8

46.1 5.7

29 4 -

16.5 1.4

11

5.3 .7 --

Total ........................

30

16.4

79

51.8

33

17.9

12

6.0

At December 31,1997, the Company was drilling 13 gross (10.1 net) wells, of which one gross (one net) well has been successfully completed and 11 gross (9.1 net) wells are still being drilled or tested. The Company was also participating with minority interests in 19 non-operated wells being drilled at that date.

Well Data At December 31, 1997, the Company had interests in approximately 1,113 (401.0 net) producing wells, of which 152 (68.6 net) were classified as primarily oil producing wells and 961 (332.4 net) were classified as primarily gas producing wells.

8

Profile for Chesapeake Energy

Transition Report 1997  

Transition Report 1997