Profile: Chesapeake Energy Corp (CHK)

CHK on New York Consolidated

19.86USD
19 Dec 2014
Price Change (% chg)

$0.72 (+3.76%)
Prev Close
$19.14
Open
$19.28
Day's High
$19.89
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$18.65
Volume
23,481,131
Avg. Vol
14,176,265
52-wk High
$29.92
52-wk Low
$16.41

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Chesapeake Energy Corporation (Chesapeake) is a natural gas and oil exploration and production company. Chesapeake is engaged in the exploration, development and acquisition of properties for the production of natural gas and oil from underground reservoirs. It also provides substantial marketing, midstream, drilling and other oilfield services. Its operations are located onshore and in the continental United States. As of December 31, 2011, the Company owned interests in approximately 45,700 producing natural gas and oil wells that produced approximately 3.5 billion cubic feet of natural gas equivalent per day, net to its interest. The Company operates in three segments: exploration and production; marketing, gathering and compression, and oilfield services. In June 2011, the Company acquired Bronco Drilling Company, Inc. In December 2011, CMD sold its wholly owned subsidiary, Appalachia Midstream Services, L.L.C. (AMS). In March 2011, it sold all of its Fayetteville Shale assets. In July 2012, the Company sold its interest in Chesapeake Midstream Partners, L.P. to Global Infrastructure Partners. In October 2012, the Company sold asset packages in the Permian Basin. In August 2013, SemGroup Corporation completed acquisition of the gas gathering and processing assets owned by Chesapeake Energy Corporation. In January 2014, Chesapeake Energy Corp completed the sale of 100% of its ownership interest in Chaparral Energy, Inc.

The Company focuses on discovering and developing natural gas resources in the Haynesville and Bossier Shales in northwestern Louisiana and East Texas; the Marcellus Shale in the northern Appalachian Basin of West Virginia and Pennsylvania; the Barnett Shale in the Fort Worth Basin of north-central Texas, and the Pearsall Shale in South Texas. It also have operations in the plays of the Eagle Ford Shale in South Texas; the Utica Shale in Ohio and Pennsylvania; the Granite Wash, Cleveland, Tonkawa and Mississippi Lime plays in the Anadarko Basin in western Oklahoma and the Texas Panhandle; the Bone Spring, Avalon, Wolfcamp and Wolfberry plays in the Permian and Delaware Basins in West Texas and southern New Mexico, and the Niobrara Shale in the Powder River Basin in Wyoming. During the year ended December 31, 2011, it acquired 30 billion cubic feet natural gas equivalent of estimated proved reserves and divested 2.776 trillion cubic feet of natural gas equivalent of estimated proved reserves, including the disposition of 2.420 trillion cubic feet of natural gas equivalent associated with the sale of its Fayetteville Shale assets.

During 2011, Chesapeake’s estimated proved reserves were 18.789 trillion cubic feet of natural gas equivalent, 54% of which was proved developed and 100% was onshore in the United States. The Company replaced its 1.194 trillion cubic feet of natural gas equivalent of production with an estimated 2.887 trillion cubic feet of natural gas equivalent of new proved reserves for a reserve replacement rate of 242%. During 2011, the Company acquired 30 billion cubic feet of natural gas equivalent of estimated proved reserves and divested 2.776 trillion cubic feet of natural gas equivalent.

In February 2011, it entered into a joint venture with a wholly owned subsidiary of CNOOC Limited (CNOOC) to sell a 33.3% undivided interest in approximately 800,000 net acres of leasehold overlaying the Niobrara Shale, Codell Sand and various other formations in the Powder River and DJ basins in northeast Colorado and southeast Wyoming. Under the terms of the joint venture, CNOOC has the right to a 33.3% participation in any additional leasehold. CNOOC has the right to a 33.3% participation in any additional leasehold. In December 2011, it entered into a joint venture with Total E&P, USA, Inc., a wholly owned subsidiary of Total S.A. (Total), in the liquids-rich area of the Utica Shale. Under the terms of the joint venture, total acquired an undivided 25% interest in approximately 619,000 net acres of leasehold, of which Chesapeake contributed approximately 542,000 net acres and Enervest, Ltd.

The Company’s Southern division includes the Haynesville and Bossier Shales in northwestern Louisiana and East Texas and the Barnett Shale in the Fort Worth Basin of north-central Texas. Proved reserves in the Southern division were 8.039 trillion cubic feet of natural gas equivalent, or 43%, of its total proved reserves by volume as of December 31, 2011. During 2011, the Southern division assets produced 562 billion cubic feet of natural gas equivalent, or 47%, of its total. Its Northern division includes the Mid-Continent (principally the Anadarko Basin in western Oklahoma and the Texas Panhandle). Proved reserves in the Northern division were 5.416 trillion cubic feet of natural gas equivalent, or 29%, of its total proved reserves by volume as of December 31, 2011. During 2011, the Northern division assets produced 383 billion cubic feet of natural gas equivalent, or 32%, of its total production.

The Company’s Eastern division includes the Marcellus Shale in the northern Appalachian Basin of West Virginia and Pennsylvania and the Utica Shale in Ohio and Pennsylvania. Proved reserves in the Eastern division were 3.188 trillion cubic feet of natural gas equivalent, or 17%, of its total proved reserves by volume as of December 31, 2011. During 2011, the Eastern division assets produced 145 billion cubic feet of natural gas equivalent, or 12%, of its total production. Its Western division includes the Permian and Delaware Basins of West Texas and southern New Mexico, the Eagle Ford Shale in South Texas and the Rocky Mountain/Williston Basin plays, including the Niobrara Shale. Proved reserves in the Western division were 2.146 trillion cubic feet of natural gas equivalent, or 11%, of its total proved reserves by volume as of December 31, 2011. During 2011, the Western division assets produced 105 billion cubic feet of natural gas equivalent, or 9%, of its total production.

As of December 31, 2011, the Company had interests in approximately 45,700 gross (22,000 net) productive wells, including properties in which the Company held an overriding royalty interest, of which 38,000 gross (19,600 net) were classified as primarily natural gas productive wells and 7,700 gross (2,400 net) were classified as primarily oil productive wells. Chesapeake operates approximately 24,800 of its 45,700 productive wells. During 2011, it drilled 1,628 gross (1,069 net) wells and participated in another 1,351 gross (213 net) wells operated by other companies. As of December 31, 2011, it had 1,282 (537 net) wells in drilling. As of December 31, 2011, its reserve estimates included 8.683 trillion cubic feet equivalent of reserves classified as proved undeveloped (PUD).

Chesapeake Energy Marketing, Inc. (CEMI), the Company’s wholly owned subsidiaries, provides natural gas and oil marketing services, including commodity price structuring, contract administration and nomination services for Chesapeake, its joint working interest owners and other producers. In addition, the Company’s midstream business provides services to joint working interest owners and other third-party customers. The Company also processes a portion of its natural gas at various third-party plants. Its midstream assets are held and operated by the Company’s wholly owned subsidiary, Chesapeake Midstream Development, L.P. (CMD), and its subsidiaries. The CMD systems are located in Oklahoma, Texas, New Mexico, New York, Ohio, Louisiana, Pennsylvania, Wyoming and West Virginia and consist of approximately 1,950 miles of gathering pipelines, servicing over 1,900 natural gas wells.

The Company formed Chesapeake Oilfield Services, L.L.C. (COS) during 2011, to own and operate its oilfield services assets. COS is a diversified oilfield services company that provides a range of well site services, primarily to Chesapeake and its working interest partners. These services include contract drilling, pressure pumping, tool rental, transportation and manufacturing of natural gas compressor packages and related production equipment. The drilling rigs have depth ratings between 3,000 and 25,000 feet and range in drilling horsepower from 450 to 2,000. As of December 31, 2011, it had a fleet of 39 owned and 93 leased land drilling rigs, 114 of which it were operating. It uses the pressure pumping assets to provide hydraulic fracturing and other well stimulation services.

The Company’s oilfield rentals segment provides premium rental tools for land oil and natural gas drilling and workover activities under the name Great Plains Oilfield Rental, L.L.C. It offers its customers a number of products and services, including drill pipe, drill collars, tubing, high and low pressure blowout preventers, water transfer, frac tanks, mud tanks and mud systems. As of December 31, 2011, it owned 2,074 frac tanks and 1.5 million feet of drill pipe. As of December 31, 2011, it owned one oilfield and heavy haul transportation companies in the industry under the names of Hodges Trucking, L.L.C. and Oilfield Trucking Solutions, L.L.C. Its trucking business provides rig relocation and logistics services, as well as fluid hauling services. Its trucks move drilling rigs, water, crude oil, other fluids and construction materials. As of December 31, 2011, it owned a fleet of 202 rig relocation trucks, 56 cranes and forklifts used in the movement of drilling rigs and other heavy equipment and 127 fluid service trucks. Its compressor manufacturing business operates under the name of Compass Manufacturing, L.L.C. and consists of natural gas compressor manufacturing operations, in which it design, engineer, fabricate, install and sell natural gas compression units, accessories and equipment used in the production, treatment and processing of natural gas and oil.

Company Address

Chesapeake Energy Corp

6100 N WESTERN AVE
OKLAHOMA CITY   OK   73118
P: +1405.8488000
F: +1405.8430573

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