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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 our oil, natural gas and NGL producing activities are summarized as follows: December 31, 2018 2017 ($ in millions) Oil and oil and natural gas properties: Proved Unproved Total Less accumulated depreciation, depletion and amortization Net capitalized costs

$

69,642 2,337 71,979 (64,055) $ 7,924

$

68,858 3,484 72,342 (62,992) $ 9,350

Unproved properties not subject to amortization as of December 31, 2018 and 2017, consisted mainly of leasehold acquired through direct purchases of significant oil and natural gas property interests. We capitalized approximately $162 million, $194 million and $242 million of interest during 2018, 2017 and 2016, respectively, on significant investments in unproved properties that were not yet included in the amortization base of the full cost pool. We will continue to evaluate our unproved properties, and although the timing of the ultimate evaluation or disposition of the properties cannot be determined, we can expect the majority of our unproved properties not held by production to be transferred into the amortization base over the next five years. Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development Costs incurred in oil and natural gas property acquisition, exploration and development activities which have been capitalized are summarized as follows: Years Ended December 31, 2018 2017 2016 ($ in millions) Acquisition of Properties: Proved properties Unproved properties Exploratory costs Development costs Costs incurred(a)

$

$

80 216 132 2,009 2,437

$

162 8

$ $

$

23 271 21 2,146 2,461

$

$

403 403 52 1,312 2,170

___________________________________________ (a)

Includes capitalized interest and asset retirement obligations as follows: Capitalized interest Asset retirement obligations(b)

(b)

$ $

194 (34)

$ $

242 (57)

Activity in 2017 and 2016 primarily reflects revisions as the result of decreased plugging and abandonment costs in certain of our operating areas. In 2018, we invested approximately $807 million to convert 115 mmboe of PUDs to proved developed reserves.

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Profile for Chesapeake Energy

2018 Annual Report  

2018 Annual Report