For the 2012 third quarter, the company’s year-over-year growth rate of natural gas production was 19%, or approximately 523 million cubic feet (mmcf) per day, and its year-over-year growth rate of liquids production was 51%, or approximately 48,450 bbls per day. Chesapeake’s year-over-year liquids production growth consisted of oil production growth of 96%, or approximately 47,900 bbls per day, and NGL production growth of 1%, or approximately 550 bbls per day. NGL production for the 2012 third quarter was reduced by approximately 467,000 bbls, or 5,075 bbls per day, due to the company’s election in certain basins to reject rather than process ethane, which was additive to natural gas production.

As a result of redirecting its drilling program from dry gas plays to liquids-rich plays, Chesapeake is projecting its natural gas production to decline approximately 7% in 2013 and is projecting its liquids production to increase approximately 29% in 2013. Management and the board of directors continue to review operational plans for 2013 and beyond, which could result in changes to the company’s drilling activity and projected production levels in 2013.

Average Realized Prices and Hedging Results and Positions Detailed

Average prices realized during the 2012 third quarter (including realized gains or losses from natural gas, oil and NGL derivatives and excluding unrealized gains or losses on such derivatives) were $1.97 per thousand cubic feet (mcf) of natural gas, $90.79 per bbl of oil and $31.22 per bbl of NGL, for a realized natural gas equivalent price of $4.04 per thousand cubic feet of natural gas equivalent (mcfe). Realized gains from natural gas, oil and NGL hedging activities during the 2012 third quarter generated a $0.17 gain per mcf of natural gas, a $2.72 gain per bbl of oil and a negligible loss per bbl of NGL for a 2012 third quarter realized hedging gain of $77 million, or $0.20 per mcfe.

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