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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES SUPPLEMENTARY INFORMATION – (Continued)

Supplemental Disclosures About Oil, Natural Gas and NGL Producing Activities (unaudited) Net Capitalized Costs Capitalized costs related to Chesapeake's oil, natural gas and NGL producing activities are summarized as follows: December 31, 2016 2015 ($ in millions) Oil and oil and natural gas properties: Proved ........................................................................................................................ Unproved .................................................................................................................... Total ...................................................................................................................... Less accumulated depreciation, depletion and amortization ........................................ Net capitalized costs ............................................................................................

$

66,451 4,802 71,253 (62,094) $ 9,159

$

63,843 6,798 70,641 (58,552) $ 12,089

Unproved properties not subject to amortization as of December 31, 2016 and 2015, consisted mainly of leasehold acquired through direct purchases of significant oil and natural gas property interests. We capitalized approximately $242 million, $410 million and $604 million of interest during 2016, 2015 and 2014, respectively, on significant investments in unproved properties that were not yet included in the amortization base of the full cost pool. We will continue to evaluate our unproved properties, and although the timing of the ultimate evaluation or disposition of the properties cannot be determined, we can expect the majority of our unproved properties not held by production to be transferred into the amortization base over the next five years. Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Costs incurred in oil and natural gas property acquisition, exploration and development activities which have been capitalized are summarized as follows: Years Ended December 31, 2016 2015 2014 ($ in millions) Acquisition of Properties: Proved properties ................................................................................ Unproved properties ............................................................................ Exploratory costs ..................................................................................... Development costs .................................................................................. Costs incurred(a)(b) .........................................................................

$

$

403 403 52 1,312 2,170

$

$

— 454 112 2,941 3,507

$

$

214 1,224 421 4,204 6,063

___________________________________________ (a)

Exploratory and development costs are net of $51 million and $679 million in drilling and completion carries received from our joint venture partners during 2015 and 2014, respectively.

(b)

Includes capitalized interest and asset retirement obligations as follows: Capitalized interest ........................................................................... Asset retirement obligations .............................................................

$ $

242 (57)

$ $

410 (15)

$ $

604 39

In 2016, we invested approximately $312 million, to convert 118 mmboe of PUDs to proved developed reserves.

144

Profile for Chesapeake Energy

2016 Annual Report  

2016 Annual Report