The following table presents Chesapeake’s December 31, 2012 estimated proved reserves, estimated future net cash flows from proved reserves (discounted at an annual rate of 10% before income taxes (PV-10)) and proved developed percentage, each calculated based on the trailing 12-month average price required under SEC rules and the 10-year average NYMEX strip prices as of December 31, 2012. Additional information regarding the SEC case can be found on page 14.
|Pricing Method||Natural Gas Price ($/mcf)||Oil Price ($/bbl)||Proved Reserves (tcfe)||PV-10 (billions)||Proved Developed Percentage|
|Trailing 12-month avg (SEC) (a)||$2.76||$94.84||15.7||$17.8||57%|
|12/31/12 avg NYMEX strip (b)||$4.85||$87.90||19.6||$27.9||55%|
|a) Reserve volumes estimated using SEC reserve recognition standards and pricing assumptions based on the trailing 12-month average first-day-of-the-month prices as of December 31, 2012. This pricing assumption yields estimated proved reserves for SEC reporting purposes.|
|b) Natural gas and oil volumes estimated under the 10-year average NYMEX strip reflect an alternative pricing scenario that illustrates the sensitivity of proved reserves to a different pricing assumption. Futures prices represent an unbiased consensus estimate by market participants about the likely prices to be received for future production. Management believes that 10-year average NYMEX strip prices provide a better indicator of the likely economic producibility of the company’s proved reserves than the historical 12-month average price.|