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Chesapeake Energy Corporation Reports Financial And Operational Results For The 2012 Third Quarter

Utica Shale (eastern Ohio) : Chesapeake continues to focus on developing the core wet gas window of the Utica Shale in eastern Ohio, a play in which the company holds approximately 1.3 million net acres of leasehold, the industry’s largest position. As of September 30, 2012, Chesapeake has drilled a total of 134 wells in the Utica play, which include 32 producing wells and 37 additional wells waiting on pipeline connection, with the other 65 wells in various stages of completion. Chesapeake is currently operating 13 rigs in the Utica play. Production from the Utica play is growing only moderately at this time because of the time and capital needed to build out gas processing and pipeline takeaway infrastructure. The company expects a much larger contribution to production growth from the Utica in 2013 and beyond as midstream constraints are reduced.

Three notable recent wells completed by Chesapeake in the Utica during the quarter are as follows:
  • The Houyouse 15-13-5 8H in Carroll County, OH achieved a peak rate of approximately 1,735 boe per day, consisting of 465 bbls of oil, 335 bbls of NGL and 5.6 mmcf of natural gas per day;
  • The White 17-13-5 8H in Carroll County, OH achieved a peak rate of approximately 1,360 boe per day, consisting of 390 bbls of oil, 285 bbls of NGL and 4.1 mmcf of natural gas per day; and
  • The Stuart Henderson 11-12-6 1H in Harrison County, OH achieved a peak rate of approximately 825 boe per day, consisting of 410 bbls of oil, 100 bbls of NGL and 1.9 mmcf of natural gas per day.

In December 2011, Chesapeake entered into a joint venture with Total to develop a portion of the Utica play. As of September 30, 2012, the company’s remaining drilling carry from Total was approximately $1.25 billion. Chesapeake anticipates using 100% of the remaining carry by year-end 2014, and the carry will pay for 60% of Chesapeake’s drilling costs during that time.

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