OKLAHOMA CITY, Feb. 13 /PRNewswire-FirstCall/ -- Chesapeake Energy
Corporation (NYSE: CHK) today provided an update on its oil and natural gas
hedging positions. During the past month, the company has increased its
hedging positions and has now hedged 71%, 36% and 22% of its anticipated 2006,
2007 and 2008 natural gas production through swaps at NYMEX prices of $9.43
per mmbtu, $9.85 per mmbtu and $9.10 per mmbtu, respectively. In total, the
company has hedged approximately 721 bcf of natural gas during the next three
years through swaps at an average NYMEX price of $9.49 per mmbtu.
In addition, Chesapeake has hedged 63%, 22% and 14% of its anticipated
2006, 2007 and 2008 oil production through swaps at NYMEX prices of $61.02 per
bbl, $62.42 per bbl and $65.48 per bbl, respectively. In total, the company
has hedged approximately 7.665 million bbls of oil during the next three years
through swaps at an average NYMEX price of $61.97 per bbl.
The following tables compare Chesapeake's hedged production volumes
through swaps as of February 10, 2006 to those as of January 17, 2006:
Swap Positions as of February 10, 2006
Natural Gas Oil
Quarter or Year % Hedged $ NYMEX % Hedged $ NYMEX
2006 1Q 74% $10.72 58% $60.03
2006 2Q 73% $8.82 67% $61.13
2006 3Q 74% $8.87 64% $61.50
2006 4Q 64% $9.36 62% $61.33
2006 Total 71% $9.43 63% $61.02
2007 36% $9.85 22% $62.42
2008 22% $9.10 14% $65.48
Swap Positions as of January 17, 2006
Natural Gas Oil
Quarter or Year % Hedged $ NYMEX % Hedged $ NYMEX
2006 1Q 74% $10.72 58% $60.03
2006 2Q 57% $8.71 60% $60.27
2006 3Q 56% $8.72 57% $60.56
2006 4Q 46% $9.01 55% $60.30
2006 Total 58% $9.38 57% $60.29
2007 23% $9.72 15% $59.79
2008 13% $8.82 7% $63.94
Depending on changes in oil and natural gas futures markets and
management's view of underlying oil and natural gas supply and demand trends,
Chesapeake may either increase or decrease its hedging positions at any time
in the future without notice.
Management Comment
Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented,
"Today's update of Chesapeake's attractive hedging positions is further
evidence that the company continues to take advantage of oil and natural gas
price volatility to lock in very attractive returns on the capital it invests
in both acquisitions and drilling. The hedging positions that Chesapeake has
entered into for 2006, 2007 and 2008 have a current positive mark-to-market
value of approximately $725 million. In addition, the mark-to-market
liability of the hedges assumed in the CNR acquisition have declined by almost
$100 million since the date of acquisition on November 14, 2005. We look
forward to reporting our fourth quarter and full-year 2005 results on February
23, 2006."
Chesapeake Energy Corporation is the second largest independent producer
of natural gas in the U.S. Headquartered in Oklahoma City, the company's
operations are focused on exploratory and developmental drilling and corporate
and property acquisitions in the Mid-Continent, Permian Basin, South Texas,
Texas Gulf Coast, Barnett Shale, Ark-La-Tex and Appalachian Basin regions of
the United States. The company's Internet address is http://www.chkenergy.com.
SOURCE Chesapeake Energy Corporation
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Related links:
http://www.chkenergy.com
CONTACT:
Investor Contact: Jeffrey L. Mobley, CFA,
Vice President - Investor Relations and Research,
+1-405-767-4763, jmobley@chkenergy.com; or Media Contact: Thomas
S. Price, Jr., Senior Vice President - Corporate Development,
+1-405-879-9257, tprice@chkenergy.com
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