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Years Ended December 31, 2016 2015 2014 Expenses ($ per boe): Oil, natural gas and NGL production .................................................. Oil, natural gas and NGL gathering, processing and transportation.. Production taxes ................................................................................ General and administrative(e) ............................................................. Oil, natural gas and NGL depreciation, depletion and amortization ... Depreciation and amortization of other assets ................................... Interest expense(f) .............................................................................. Interest Expense ($ in millions): Interest expense ................................................................................ Interest rate derivatives – realized (gains) losses(g) ........................... Interest rate derivatives – unrealized (gains) losses(g) ....................... Total interest expense .............................................................

$ $ $ $ $ $ $

3.05 7.98 0.32 1.03 4.31 0.45 1.18

$ $ $ $ $ $ $

4.22 8.55 0.40 0.95 8.47 0.53 1.30

$ $ $ $ $ $ $

$

286 (11) 21 296

$

329 (6) (6) 317

$

$

$

$

4.69 8.43 0.90 1.25 10.41 0.90 0.63

173 (12) (72) 89

___________________________________________ (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)

Realized gains (losses) include the following items: (i) settlements and accruals for 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 (including current period settlements for option premiums and early terminated derivatives) offset by amounts reclassified as realized gains (losses) during the period.

(c)

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 segment.

(d)

For the years ended December 31, 2016 and 2015, we recorded unrealized losses of $297 million and unrealized gains of $296 million, respectively, on the fair value of our supply contract derivative. Additionally, in 2016, we sold the long-term natural gas supply contract to a third party for cash proceeds of $146 million. See Note 11 of the notes to our consolidated financial statements included in Item 8 of this report for discussion related to this instrument.

(e)

Excludes restructuring and other termination costs.

(f)

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.

(g)

Realized (gains) losses include interest rate derivative settlements related to current period interest 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.

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Profile for Chesapeake Energy

2016 Annual Report  

2016 Annual Report