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The Play: The Barnett Shale

Drilling Under the Radar
By Cheryl Hudak

On the surface, September 28, 2007, appeared to be a typical day at the bustling Dallas-Fort Worth International Airport. 

As usual, more than 165,000 passengers streamed through the nation’s third-busiest airport, rushing to catch one of 2,000 flights that arrive or depart every day.

For a select group of people, however, September 28 was not a typical day at all. 

It was the day Chesapeake turned on the gas at DFW.

For the members of Team DFW, it was a day of celebration – the culmination of 14 months of preparation, negotiation, permitting, testing and drilling. And yet it was just one more landmark in what has become the largest drilling program ever accomplished at a major hub airport.

Symbol of high-flying Texas, an American Airlines jet
streams past the derrick of a Chesapeake drilling rig at
DFW International Airport. The company’s historic DFW
natural gas project is being conducted under such stringent
standards that most passengers are unaware of its progress.

It was not a typical day beneath the ground, either.  There, a mile and a-half below the earth’s surface, natural gas trapped for 300 million years within the stingy formation called the Barnett Shale began moving up a wellhead to begin its journey to heat homes, generate electricity and propel the economies of Texas and the nation.

The DFW Airport project is a history-making partnership that began in October 2006, when the DFW Airport Board of Directors entered into an exploration and drilling lease with Chesapeake.  The lease covers 18,453 acres of airport property, located on one of the largest remaining contiguous prospective areas in the energy-rich Barnett Shale natural gas play.

Today there are approximately 30 wells producing at DFW Airport, with production of approximately 50 million cubic feet of natural gas equivalent (mmcfe). The company has five rigs working day and night to complete a projected 327-well drilling program over the next five to six years. Assuming an estimated average recovery of approximately 2.6 billion cubic feet of natural gas equivalent (bcfe) gross reserves per well, the company believes that almost one trillion cubic feet of natural gas equivalent (tcfe) reserves can be produced from under the airport.

Chesapeake hopes to reach a peak production level from the airport lease of approximately 250 mmcfe per day by year-end 2011, and expects production to continue for the next 50 years.

Each of the horizontal wells will penetrate more than a mile vertically and then make a horizontal turn, extending another mile from its original drillsite. This pad drilling technique, which Chesapeake has perfected, allows wells to reach under roads, runways, buildings and other structures, leaving surface activities undisturbed.

This is the caption

Drilling multiple wells from one pad site also minimizes the footprint of gas development while containing costs.  Up to 14 wells may be drilled from each single pad on DFW.

The entire project is a marvel of modern technology – and a testament to the power of building win-win partnerships.

“Blending the cultures of Chesapeake, DFW Airport and the FAA (Federal Aviation Agency) was really the key to making this project work,” said Dave Leopold, Chesapeake’s DFW Project Manager. “This project was the first of its kind to be attempted on such a large scale.  Our partners had no experience to go by, and had to learn to overcome their preconceptions of oil and gas development. Basically, we came to understand each others’ businesses.  Now, after building a relationship, we work together very well.”

Each phase of the project required a stack of paperwork and permits. As one phase was being executed, permits for the next were being worked out between the three partners.

This is the caption

 “DFW alone has eight administrative departments that have to approve every step of every process. The FAA also has eight. We’d get approval from a couple departments and think we were good to go,” Leopold said.  “Then another department would say it wouldn’t work, and we’d be back at the drawing board. Once we all determined exactly what we needed it became much easier.”

Less than two months after the lease was signed, Chesapeake began 3-D seismic testing on the property. Seismic data are gathered when sound waves are shot deep into the ground by vibrator trucks located on the surface – in this case, on airport grounds, terminals, runways and taxiways. Echoes from those sound waves provide a subterranean map to help determine the best drilling locations in the low-permeability shale.

It was a tricky operation, conducted under the scrutiny of airport security officials, the FAA, numerous environmental and safety watchdogs and the Airport Board. The seismic testing took three months and was conducted during nighttime hours between 11 p.m. and 6 a.m., when air and land traffic slow down at the bustling facility. 

Plans for collecting the high-fold, high-resolution seismic survey often had to be modified on the fly to accommodate buildings, hazards and airport regulations. Despite the challenges, the crew was able to acquire 32 square miles of high-density 3-D seismic under the direction of Larry Lunardi, Chesapeake Vice President of Geophysics. 

With the 3-D survey completed, the first DFW well was spud May 2, 2007, in the north sector of the airport.  Airport emission limits require the use of three electric and two diesel-powered rigs.  Four 173-foot-tall rigs are operated by Chesapeake’s drilling subsidiary, Nomac. The fifth, an Italian-built rig supplied by Mountain Drilling, is drilling where regulations specify a 100-foot rig height limit.  All drilling locations use closed-loop mud systems, which eliminate the need for open pits to hold water and drilling fluids.

“Chesapeake has put together a great team for this project,” Leopold said. “Our management is completely on board. We have a supportive and talented technical and geoscience staff – and of course a terrific team in Fort Worth.  It takes a team atmosphere to succeed on this scale.”

As drilling crews work, the sound of equipment is overridden by the roar of low-flying jets making their way through the air space.  From above, frequent fliers will see some new additions to the DFW landscape during take-offs and landings – drilling rigs.

Airport users will also benefit from the royalties from natural gas development on the site. The airport plans to use royalty income to improve its terminals, reduce debt, invest in new infrastructure and make DFW one of the more cost-competitive large hub airports in the world.

“This is a monumental deal for DFW that will bring non-aviation revenue to new highs for the next couple of decades,” said Jeff Fegan, CEO of DFW International Airport. “Our passengers, our owner cities and the North Texas economy will all be benefactors of DFW’s great fortune.”

Despite the challenges of conducting operations during
nighttime hours and constantly changing plans to
accommodate buildings, hazards and airport regulations,
Chesapeake’s team acquired 32 square miles of high-density
3-D seismic data to help determine the best drilling locations.

Milestones

October 5, 2006
Lease signed between DFW International Airport and Chesapeake Energy Corporation

December 16, 2006
3-D seismic testing begins

March 8, 2007
Completion of 3-D seismic testing

March 29, 2007
Environmental assessment approved by FAA

April 4, 2007
First airspace permit approved by FAA

May 2, 2007
First well spud by Chesapeake

August 21, 2007
First well fracturing begins

September 28, 2007
First gas produced

Creating opportunities for prosperity

Chesapeake’s DFW project is setting new standards in the energy industry for minority subcontractor and minority investor participation, creating new opportunities for economic prosperity that will last for decades to come.

As part of its lease with DFW International Airport, Chesapeake agreed to meet two goals for the M/WBE
(Minority/Women-owned Business Enterprise) Program: M/WBE investment participation in the project should be 20%, and M/WBE subcontractors should represent 20% of total dollars.

The company exceeded the investment goal by reaching 20.17%.  The subcontractor participation rate changes monthly but is currently at 26%.

For its efforts, Chesapeake was presented with DFW International Airport Small and Emerging Business Department’s Excellence in Innovation and Technology Award recognizing its efforts to increase diversity in a nontraditional industry.  The company was also recognized for implementing innovative development programs which promote diversity at DFW and in the community.

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The Play: The Fayetteville Shale

A river runs through it:

Environmentally sensitive operations in the Natural State

Arkansas’ Little Red River is a mecca to fishermen who revel in its serene atmosphere, clear rushing waters and abundance of feisty trout.

Each year as it flows through the Natural State, the Little Red River carries along
78,345 acre feet of excess water that passes out of Arkansas and is  eventually used by other states or discharged into the Gulf of Mexico.

In 2008, Chesapeake is planning to divert a small portion of that excess water – about 1,550 acre feet per year – into a private lake for use in the company’s drilling and frac stimulation activities.  

Pride of the Little Red River a gleaming trout is held by
David Rupe, a biologist working with the Arkansas
Game and Fish Commission on a fisheries study that
will determine the existing status of fish populations
and provide regular water quality monitoring during the
operation of the holding lake.

Since Chesapeake began exploring and drilling for natural gas in the Fayetteville Shale play of north-central Arkansas, the company has been purchasing water from privately owned sources, primarily ponds, and from city or rural water systems.  That process works well when water is available, but it requires hauling water by tanker truck from the source to operating sites, which creates wear and tear on county roads.

 “The Arkansas Natural Resources Commission (ANRC) has wanted someone to build this kind of storage lake for a long time to more effectively use the state’s water resources,” said Dave Krueger, Chesapeake Senior Asset Manager – Arkansas.  “Chesapeake is a good neighbor to the community and we’ve worked with numerous agencies to make this project come to life, including the U.S. Army Corps of Engineers, the Arkansas Department of Environmental Quality (ADEQ), the Arkansas Oil and Gas Commission and the Arkansas Game and Fish Commission (ARGFC).”

Water for the project will only be pumped from the river during periods of high flow as designated by the ANRC.  It will reach the lake through a large-diameter, low-flow intake pipe made of the same corrosion-resistant material used in municipal water systems. The opening of the pipe will be angled upstream and covered with metal mesh to avoid harming fish.

Electrical pumps, enclosed in a noise-reducing insulated building, will move water from the river into the lake.  From there, the water will transverse a gravity-fed pipeline for distribution
to drilling and stimulation sites.

“We have installed more than 40,000 feet of pipeline for this project,” said Mike Churchwell, Production Superintendent for Chesapeake’s Searcy Field Office.  “We will have 14 hydrants located at road crossings where we can fill tanker trucks.  This will definitely save wear and tear on roads.”

Shaping the future, an electronic rendering is superimposed on the future
lake site, showing its configuration.  Excess water from the Little Red River,
pictured at left, will be pumped into the lake and then dispersed through a
pipeline network to significantly reduce wear and tear on county roads while
providing adequate water for Chesapeake’s drilling and completion operations.

The hydrants also will provide much-needed water for rural fire departments in the area. 

The Chesapeake lake will be completed later this year, and will encompass more than 18 acres of water surface within a grass-covered earthen dam and fully revegetated landscape.  Specially designed filling systems will keep its fresh water clear.

The impact on the Little Red River?  A U. S. Fish and Wildlife Service study concluded the Chesapeake project will not alter the water temperature of the river.  The private lake’s intake location, in an unaffected transition zone between the trout fishery upstream and the native fishery downstream, will have no significant adverse impact on trout or other fish or wildlife in and around the river. 

Environmental esthetics were also considered: all visible rip-rap will be made of natural rock and river cane will be planted after construction to provide a more natural stream bank view for boaters, whose numbers may increase as Chesapeake plans to provide a public access boat ramp. 

The new water storage facility was designed to accommodate all the people – and trout – who use and love the Little Red River.  At the same time, it will allow Chesapeake to maximize production of the Fayetteville Shale’s rich deposits of natural gas, leaving the smallest possible environmental footprint.

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The Play: The Technology

The Code
By Cheryl Hudak

Chesapeake’s Reservoir Technology Center team helps define and develop natural gas from shale formations as they find new ways of cracking The Code.

Twenty years ago, a drilling team encountering shale might have shaken their heads and called it A “Dry Hole” or “non-productive.”  Today, 30% of Chesapeake’s natural gas production comes from shale and about 50% of its drilling activities are in shale plays.

Pyrite framboids in a fractured shale
at 3,000 times actual size.

Although this dark, unimpressive looking shale rock makes up almost half the earth’s stratigraphic record, a portion of it sometimes contains hydrocarbons. When it does contain hydrocarbons, the rock’s ultra-tight fabric means that it is reluctant to release the natural gas or oil that resides within. Advanced technologies, such as horizontal drilling and fracture stimulation, have made shale production economically attractive and have opened the door to extensive development.

Shale is often considered a mystery, and today the experts in Chesapeake Energy’s unique Reservoir Technology Center (RTC) in Oklahoma City are determined to solve it. Outside, the RTC structure is as dark as the stone itself.  Inside, the company’s scientific team is shedding new light on the stingy dark gray rock.

“The CHK core lab is unique within the industry,” said Don Harville, Reservoir Technology Center Manager. “We know of no other company that is doing tight rock analysis. We exist because Chesapeake seized the initiative to do what the industry as a whole has failed to do – to properly analyze shale plays as opportunities – and that is understandable because it is a difficult rock to analyze.”

Don Harville, RTC Manager.

The 8,000-square-foot center opened in spring 2007 to provide tight rock measurements in unconventional reservoirs like shale and tight gas sands.  Although there are commercial labs that analyze shale core, the surging interest in shale development has put such pressure on them that exploration companies are waiting as long as a year to get results, and the volume of work has brought the quality of their analysis into question.

Many of the analyses done in Chesapeake’s center directly influence the company’s operational decisions: what plays it selects for development and which completion methods will be used to maximize and sustain production.

The Reservoir Technology Center analyzes shale cores that are pulled from various depths during the drilling process. Using highly sophisticated equipment, they determine how porous a rock is, how permeable, its gas and fluid saturations, grain density and other key characteristics.

A screen capture is a false-colored image
highlighting pore samples in shale.
Analyzing such data enables the company
to associate porosity with shale types and
ultimately, predict reservoir quality.

Their evaluations provide valuable information on whether the rock will yield gas or liquid hydrocarbons. A scanning electron microscope and X-ray diffractometer are used to determine the sample’s composition, texture and pore size distribution.  Still other tools measure the mechanical properties of the rock, including its fracture orientation, sonic velocity and toughness. 

The lab simulates fracture stimulations and measures each core sample’s sensitivity to frac fluids, “proppants” (sand-like particles forced into the fractures to prop open the breaks) and closure pressures.

“We’re doing cutting-edge research here in the RTC,” Harville said. “Not only do we have the newest technology to get the most accurate results, but the integration of our work with the company’s petrophysicists, geologists, engineers and drilling teams is unique.”

Rick Svor, Chesapeake’s Chief Petrophysicist, explained how the RTC works with his group.

“When completed, the log data are analyzed by our petroscientists to determine the rock’s resource potential and which fracing fluid will work best to break open the rock and allow gas to exit,” Svor said. “They also will use data to decide what proppants will hold the fractures open over the producing life of the well – which can be 50 years or more.

Lead Scientist John Kieschnick points out details on the
screen of a scanning electron microscope to Leo Alcantar-
Lopez, Geochemist, as they study the pore network
of a shale sample.

“There are companies spending huge amounts of money on currently uneconomic plays,” Svor noted. “In the Barnett Shale, Chesapeake has been able to avoid wasting time and resources by focusing on truly productive portions of this play. The amazing abilities of our Reservoir Technology Center team have assisted in that success.”

A central figure in the RTC’s development is John Kieschnick, Lead Scientist. Kieschnick has been an innovator in the industry for decades.

“We knew we needed John Kieschnick for our lab,” said Jeff Miller, Chesapeake’s Unconventional Geoscience Manager.  “He’s been on the leading edge of research for tight rock analysis on gas shales.”

The RTC today has 15 scientists and technicians who bring vast experience to the team: an XRD mineralogist from Los Alamos labs, a chemist from Kerr-McGee, a rock mechanics expert from Mobil Research, a reservoir flow expert from CoreLab, each of them bringing a specific expertise to the table as they study how rock will behave when it is stimulated to enhance productivity.

Duplicating the impact of fracture stimulation, Lab
Technician Holly Derousse measures the flow of gas
through a simulated fracture proppant pack. The sample
is squeezed at ultra-high pressure to determine how
the proppant holds open the rock and allows gas to flow
up the well.

“We’ve tried to build a world-class lab with a spirit of excellence,” Kieschnick said. “If anyone out there is duplicating the things we’re doing, they are not doing it with the integration, speed and accuracy we bring to the process.”

That fact can be seen in their results – the lab completed more than 2,300 feet of core analysis in its first six months of operation and saved in excess of a million dollars in outside service costs – not including the impact its efforts have had on Chesapeake’s bottom line by providing timely results and helping solve problems in numerous plays.

“This kind of work gives us a lot of pride,” Kieschnick said. “It’s our closeness to the operations that makes it fun, supplying data to our own company’s operating people and contributing to the bottom line.”
After decades of science, he still loves the learning process.

“It’s a big puzzle with millions of pieces. What we learn helps in our evaluation of a reservoir’s quality and ability to produce.

“Then you have to transfer that knowledge from one shale play to another. All shales are different.  For instance, not every shale is like the Barnett, but when we know how one shale behaves, we can better understand the next. That’s very important for this company’s future because Chesapeake is highly committed to unconventional plays. The Fayetteville Shale in Arkansas, the Delaware Basin shales in West Texas, the Marcellus in Appalachia and the Woodford in Oklahoma – those are our future, and we’ve done analysis for all of them.”

Lab Technician Dustin Drew prepares core
samples for testing in the RTC.

Four exploratory geologists work in Miller’s group to generate new prospects in unconventional reservoirs, relying on the data generated by the scientists in the Reservoir Technology Center.

“The joint efforts of the RTC lab and our scientific and operations groups contribute to our efforts in unconventional plays in many ways,” Miller observed. “They keep Chesapeake focused in the sweet spots (most economic parts) of plays, they help the company screen submitted prospects and generate new unconventional plays. It’s a one-of-a-kind combination.”

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The Play: Appalachia

Chesapeake's Eastern Region teams are redefining Appalachia

The most recent addition to Chesapeake’s operations may have the longest history of natural gas production.

Long before the drilling rig was an everyday sight in the Mid-Continent, natural gas had been discovered in the green mountains of modern-day West Virginia.  More than 200 years ago, Thomas Jefferson wrote about a curious hole in the earth in western Virginia where, when a candle was held nearby, it would produce a beautiful flame.
 
Today that flame is glowing in West Virginia, Pennsylvania, New York, Ohio and Kentucky as Chesapeake redefines the Appalachian Basin’s rich legacy of resource development.

Up to the job, Chesapeake crews are drilling
deeper wells than the region has ever seen before,
including a 22,000-foot well that will spud this year.
Pictured here are Yost crew members (left to right)
C.W. Morgan, Robert Wagoner, Eugene Morgan,
Chris Morgan, Jimmy Linger and John Kastelic.

Oklahoma City-based Chesapeake entered the area in November 2005, acquiring Columbia Natural Resources (CNR), a natural gas developer primarily involved in supplying fuel for local utility companies.  CNR, with headquarters in Charleston, West Virginia, was a well-established company with a history dating back more than 100 years when it was part of John D. Rockefeller’s Standard Oil Trust.  But its game plan has dramatically changed in the past 24 months.  Today, Chesapeake is implementing operational advances and taking advantage of attractive gas prices in the region to create value through its Eastern Division activities.

“As Chesapeake, we are bringing new technology and capital to the area,” said Mike John, Vice President of Operations – Eastern Division, “which will allow us to unlock its real potential.”

Chesapeake has proved reserves of approximately 1.5 trillion cubic feet of equivalent on its 3.7 million net acre position that holds multiple play types, including the Devonian Shale and tight sands, the Trenton-Black River, Oriskany deep horizons and CBM plays. Chesapeake is rapidly surpassing other operators in the region through the quantity and quality of its 3-D seismic, which is opening new possibilities in this well-drilled but under-explored region.

The company gained broad scientific expertise in similar unconventional sand gas plays in other regions.  Now it is leveraging that collective knowledge in emerging Appalachian Basin plays such as the Marcellus and Huron Shales. Chesapeake has drilled five horizontal wells in the area with a sixth currently underway, two of which target the Marcellus Shale.

Millions of years of erosion formed
Seneca Rocks, a landmark of West
Virginia’s Monongahela National Forest.
Climbers have mapped more than 375
different routes to scale the rocks,
varying in difficulty from easy to expert.

Despite the Appalachian Basin’s long history as a natural gas producing region, less than one-half of one percent of the wells in the area have been drilled below 7,500 feet.

“There are rocks with potential here below 20,000 feet, and that is not a widely recognized fact,” John explained.  “We are drilling our second well to a target more than 10,000 feet deep.  In 2008, we are planning a 22,000-foot well, the deepest ever drilled in the region.”

The company’s employee base is expanding to support this aggressive growth. While CNR employed around 330 people at the time of its acquisition, Chesapeake now has 575 people in the Eastern Division. Some of those are native West Virginians returning to the state.

 “In this mature basin, many Eastern-educated people didn’t think oil and gas development here was very high tech, so they pursued careers in the industry elsewhere,” said John.  “Now that Chesapeake is in West Virginia we are encouraging them to come back home – and they are responding!”

The company has eight rigs drilling in the region, five of which are operated by Yost Drilling, a well-respected drilling service company based in Mt. Morris, Pennsylvania. Chesapeake acquired Yost shortly after Columbia Natural Resources.  The Yost fleet has recently been supplemented with two rigs formerly owned by Nomac,
Chesapeake’s Mid-Continent focused drilling subsidiary, in order to accommodate the division’s horizontal drilling projects.

Today Chesapeake’s Eastern Division has 8,600 wells, 4,900 of which are in West Virginia. Tucked among the forested ridges and hollows of the rural landscape, they are almost invisible. That is no accident. The company has a strong commitment to environmental stewardship throughout its operations.

Drillsites in the region are carefully prepared with fields skirted and sediment control measures implemented to stabilize soil and minimize the environmental impact of drilling and production activities. Such measures are intended to maintain environmental quality of the Appalachian Basin region while contributing to the area’s economic growth, employment opportunities and quality of life.

Lighting up the dawn near the border of West Virginia and Pennsylvania, a Chesapeake rig drills a new chapter in
the long history of resource development in the Appalachian Basin.

Building for the future

Chesapeake’s new Eastern Division
headquarters, shown in renderings
above and below, will be an
environmentally green building.

High on a ridge above Charleston, West Virginia, a clearing in the trees marks the future location of Chesapeake’s Eastern Division headquarters.  Ground was broken in September 2007 for the new structure, which is an example of Chesapeake’s long-term commitment to its Eastern Division operations. Although it will require approximately two years for completion, the building’s concept and design are already considered a corporate showplace for the region.

The new headquarters will not only be located in a green environment, it will be “green” in its own right, meeting LEED Rating System standards.  The Leadership in Energy and Environmental Design (LEED) Green Building Rating System is the nationally accepted benchmark for the design, construction and operation of high-performance green buildings.

The 120,000-square-foot facility was designed by Oklahoma City architects Elliott and Associates with assistance from Silling Associates of Charleston.

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Inside CHK

Pipeline crew makes new friends in Arkansas

There’s a new supervisor near the Fowler Well off Highway 16 north of Searcy, Arkansas. He doesn’t wear a hardhat or drive a white Chesapeake truck, but he’s in charge nonetheless.  He’s stubborn – though it comes naturally – but tends to be more cooperative if given a breakfast biscuit.

The winsome pet of Paul Parker and
Christine Walker is shown supervising
a pipeline crew.

His name is Curly.  He’s a donkey.

Curly lives on a beautiful 14-acre spread owned by Paul Parker and his wife, Christine Walker. When drilling began on the adjacent Fowler property, workers had to run a gas line from the rigsite, which required disturbing Curly’s fenced area.

“We told the workers to make sure that Curly didn’t get away,” said Christine Walker.  But when no one was looking, Curly took advantage of a brief window of opportunity and trotted off.

“The workers told us what had happened. I was mad at first, but the way the guys responded was unbelievable,” Walker said. A posse of Chesapeake contract workers spread out far and wide to search for Curly.  He was found about a half-mile away – and from that moment on, Curly became a priority.

A donkey of distinction, Curly became a
celebrity after his story appeared in a recent

Arkansas edition of Chesapeake’s
“Community Ties” newsletter. In this photo he
is “on camera” for a television news magazine
currently in production.

Anytime there’s work around Curly’s area, guards are positioned to make sure he doesn’t escape again. But that’s not likely to happen. If you’re pampered like Curly, why would you want to leave?

“They give him all kinds of attention,” said Paul Parker. “Most every morning, one of the workers will bring him a breakfast biscuit – he loves them.”

Curly has also become one of the guys, following them around the property and lending a helping hoof every now and then – looking like a supervisor.

Walker says she dreads the day when all workers are gone.

“Curly will miss them terribly. He’s developed a friendship with those guys and they really care about him,” she said.

Chesapeake joins Natural Gas STAR Program

Chesapeake has joined the Environmental Protection Agency’s (EPA) Natural Gas STAR Program, a voluntary initiative encouraging oil and natural gas companies to work with the government and each other to reduce methane emissions by adopting environmentally sound technologies and techniques.

 “We have recognized for a number of years the importance of adopting environmentally sound practices and technologies throughout our operations,” said Aubrey McClendon, Chairman and CEO.  “We have already adopted many of the practices promoted by the program.  Our participation in the EPA Natural Gas STAR Program will broaden our efforts to make sure we are doing everything we can to reduce emissions and operate in an environmentally responsible manner.”

The company has appointed Andrew McCalmont, Senior Asset Manager – Permian North, to head the EPA Natural Gas STAR Program introduction and management throughout Chesapeake’s 16-state operation.

“The EPA’s Natural Gas STAR Program complements Chesapeake’s commitment to a clean environment.  We intend to be an active participant in the program and look forward to reporting and sharing our successes and best practices with industry partners, while achieving further efficiencies from the experiences of companies already involved in the program.  We are confident our continued emphasis on adopting environmentally responsible practices and technologies will have a positive impact on our financial and operational performance.”

Employees go over the top in record-breaking United Way campaigns

More than 2,600 rubber ducks cascade
into the creek running through
Chesapeake’s Oklahoma City campus
in the annual Duck Derby. The event
kicked off the company’s 2007 United
Way campaign.

More than 1,300 United Way organizations in the United States help millions of people each year. Thanks to the generosity of Chesapeake employees, families in communities where the company operates will have more resources available through United Way p4rdartner agencies. 

Employees across the country, from Texas to West Virginia, pitched in to raise money for their local United Way campaigns. Chesapeake matched employee donations 100%, and total contributions for 2007 reached more than $2.14 million – $600,000 more than last year.

“Our employees’ generosity and compassion for those in need is commendable. We do what we can in each region to encourage people to give. However, at the end of the day, our employees choose to give above and beyond, and I am proud of them for that,” said Aubrey McClendon.

In Oklahoma City, more than 2,600 rubber ducks cascaded into the creek running through Chesapeake’s corporate campus in the annual Duck Derby that kicks off the company’s United Way campaign. After racing down the creek, the first 10 ducks to cross the finish line earned their owners a prize – and launched what would become the company’s most successful United Way campaign. 

Employees from the Eastern Division office in
Charleston, West Virginia, spent a day volunteering
at the Hubbard Hospice House as part of United
Way’s Day of Caring.

At the company’s Eastern Division headquarters in Charleston, West Virginia, employees did more than give money – they also lent a helping hand through their annual United Way Day of Caring. Loaded with wheelbarrows, flowers and shovels, Chesapeake employees planted flowers and created a soothing and colorful landscape at the Hubbard Hospice House.

For Administrative Assistant Natasha Caines, it was her first time to visit a hospice center.

“The United Way Day of Caring was an opportunity to step outside of what you may normally do. During our visit we took a tour of the hospice house. It was good to see how our contributions are really helping people in need,” she said.

Supporting United Way agencies in the communities where Chesapeake operates is part of the company’s commitment to being a good neighbor. Not only are healthy communities good for business, they are good for our country. Whether it’s a family in financial crisis or an elderly person needing basic care, Chesapeake employees know by supporting United Way, they are improving life for thousands of people every day.

Platts Global Energy Award honors Chesapeake as Hydrocarbon Producer of the Year

Jeff Mobley, Senior Vice President –
Investor Relations and Research, at the
Platts Global Energy Awards.

Chesapeake was named Hydrocarbon Producer of the Year at the ninth annual Platts Global Energy Awards. In addition, Chesapeake was ranked as the 14th fastest-growing company in Platts’ 2007 Top 250 Global Energy Companies list.

The Platts Global Energy Awards recognize excellence and innovation by companies and executives in more than a dozen sectors within the global energy industry. The Hydrocarbon Producer of the Year award recognizes excellence in the upstream energy industries. Criteria for the award included:

• Demonstration that activities in exploration and production set world-class standards in one or all of a range of activities exploring for and finding new resources;
• Pushing the boundaries of technical excellence and innovation in resource extraction;
• Bringing in complex or difficult projects on schedule and within budget;
• Having an exemplary safety and environmental record; and
• Delivering consistent and growing returns to its shareholders or owners.

Judges in the competition commented hat they were impressed with Chesapeake’s committed strategy of identifying and developing nontraditional natural gas plays, its ability to successfully execute acquisitions, its strong financial management and performance track record.

 “We are honored to be selected as the Hydrocarbon Producer of the Year and are proud of our accomplishments in building the nation’s largest independent natural gas producer and the nation’s most active drilling program,” said Aubrey McClendon. “We are pleased that the hard work and dedication of Chesapeake’s 6,300 employees have been recognized on the world stage and we look forward to continuing to provide substantial new supplies of clean-burning American natural gas in an increasingly energy-short world."