Chesapeake Energy Corporation Announces Updated Outlook and 1Q 2001 Earnings Release and Conference Call Date
PRNewswire
OKLAHOMA CITY

The following was released today by Chesapeake Energy Corporation:

Chesapeake Energy Corporation has scheduled its first quarter 2001 earnings release to be issued after the close of trading on the New York Stock Exchange on Thursday, April 26, 2001.

A conference call is scheduled for Friday morning, April 27, 2001 at 8:00 am CDT to discuss the release. The telephone number to access the conference call is 913.981.4911.

For those unable to participate in the conference call, a replay will be available for audio playback at 11:00 am CDT on April 27, 2001, and will run through midnight Thursday, May 10, 2001. The number to access the conference call replay is 719.457.0820; passcode for the replay is 709290.

The conference call will also be simulcast live on the internet and can be accessed either by going directly to the Chesapeake website at http://www.chkenergy.com/ and selecting "Shareholder Information", or by going directly to http://www.vcall.com/. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will be available for approximately ninety days thereafter.

The company also has scheduled the internet webcast of its presentation at the Independent Petroleum Association of America conference on Thursday, April 19, 2001 at 3:30 pm EDT. Interested parties may also access that simulcast by visiting our website and selecting "Shareholder Information."

Chesapeake Energy Corporation is among the 10 largest independent natural gas producers in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent region of the United States. The company's Internet address is http://www.chkenergy.com/.

                      CHESAPEAKE ENERGY CORPORATION
                                 OUTLOOK

                              April 16, 2001

Quarters Ending March 31 and June 30, 2001; Years Ending December 31, 2001 and 2002.

We have adopted a policy of providing investors with guidance on certain factors that affect our future financial performance. As of April 16, 2001, we are using the following key operating assumptions in our projections for the first two quarters of 2001 and full years 2001 and 2002. Please note that our outlook now incorporates earnings per share estimates. The key operating assumptions for 2001 include the completion of the merger with Gothic Energy Corporation which occurred on January 16, 2001.

               Qrtr Ending   Qrtr Ending    Year Ending       Year Ending
                March 31,     June 30,        Dec. 31,          Dec. 31,
                  2001          2001            2001              2002
  Estimated
   Production
    Oil - Mbo   600 - 675     700 - 750    2,750 - 3,250     3,000 - 3,500
    Gas - Bcf    35 - 36       34 - 36       154 - 160         162 - 168
    Gas
     Equivalent -
     Bcfe       38.5 - 40     38.5 - 41      170 - 180         183 - 187
  Estimated
   NYMEX Prices
    Oil - $/Bo   $28.73        $25.00          $25.43            $23.00
    Gas - $/Mcf   $7.05         $5.12          $5.61             $4.19
  Estimated
   Differentials
   to NYMEX
   Prices
    Oil - $/Bo   -$0.80        -$0.80          -$0.80            -$0.80
    Gas - $/Mcf  -$0.50        -$0.40          -$0.40            -$0.35
  Estimated Hedging
   Effects (based
   on expected
   NYMEX prices above)
    Oil - $/Bo   +$0.89        +$3.24          +$2.80            +$0.47
    Gas - $/Mcf  -$0.89        -$0.09          -$0.18            +$0.32
  Estimated Realized
   Prices (includes
   hedging)
    Oil - $/Bo   $29.28        $27.44          $27.38            $22.67
    Gas - $/Mcf   $5.60         $4.63          $4.97             $4.16
    Gas Equivalent -
     $/Mcfe       $5.53         $4.62          $4.92             $4.11
  Operating Costs
   per Mcfe
    Production
     expense  $0.45 - 0.50  $0.45 - 0.50    $0.45 - 0.50      $0.45 - 0.50
    Production
     taxes
     (6.5% of
     O&G
     revenues) $0.38 - 0.42  $0.28 - 0.32   $0.32 - 0.35      $0.23 - 0.27
    General and
     admini-
     strative $0.09 - 0.11  $0.09 - 0.11    $0.10 - 0.11      $0.09 - 0.11
    DD&A - oil
     and gas  $0.90 - 0.93  $0.96 - 0.99    $1.00 - 1.06      $1.08 - 1.12
    Depreciation
     of other
     assets   $0.05 - 0.06  $0.05 - 0.06    $0.05 - 0.06      $0.05 - 0.06
    Interest
     expense  $0.66 - 0.70  $0.74 - 0.78    $0.58 - 0.62      $0.45 - 0.49
  Other Income
   and expense
   per mcfe(B)(C)
    Marketing gross
     profit   $0.02 - 0.04  $0.02 - 0.04    $0.02 - 0.04      $0.02 - 0.04
    Other
     income   $0.01 - 0.03  $0.01 - 0.03    $0.01 - 0.05      $0.01 - 0.05
  Book Tax Rate -
   primarily
   deferred     35 - 40%      35 - 40%        35 - 40%          35 - 40%
  Equivalent
   shares
   outstanding
    Basic       157,500 m     162,200 m      162,500 m         166,000 m
    Diluted     170,800 m     170,800 m      171,000 m         173,000 m
    Earnings per
     share -
     fully
     diluted  $0.40 - 0.42  $0.27 - 0.29(C) $1.43 - 1.48(C)   $1.10 - 1.15

  Capital Expenditures:
    Drilling    $75,000 -     $78,000 -      $300,000 -        $315,000 -
                $80,000 m     $82,000 m      $325,000 m        $345,000 m
  Sensitivity to
   price change -
   for each $1.00/bbl
    PV 10%      $15 mm(A)     $15 mm(A)      $15 mm(A)         $15 mm(A)
    Cash flow
     from
     operations $0.7 mm(A)    $0.7 mm(A) $2.5 - $3.0 mm(A)$2.5 - $3.0 mm(A)
  Sensitivity to
   price change -
   for each $0.10/mcf
    PV 10%       $72 mm        $72 mm          $72 mm            $72 mm
    Cash flow from
     operations  $4.0 mm       $4.0 mm      $15 - $16 mm      $15 - $16 mm

  (A) Current reserves inclusive of Gothic reserves.
  (B) Does not include non-recurring charges of an estimated $3.4 million
      (pre-tax) related to the Gothic acquisition in quarter ended 3/31/01.
  (C) Does not include an anticipated extraordinary charge of $44 mm
      (after-tax) related to early debt extinguishment in quarter ended
      6/30/01.

  Commodity Hedging Activities

Periodically the Company utilizes hedging strategies to hedge the price of a portion of its future oil and gas production. These strategies include:

   (i)    swap arrangements that establish an index-related price above
          which the Company pays the counterparty and below which the
          Company is paid by the counterparty,
   (ii)   the purchase of index-related puts that provide for a "floor"
          price below which the counterparty pays the Company the amount by
          which the price of the commodity is below the contracted floor,
   (iii)  the sale of index-related calls that provide for a "ceiling"
          price above which the Company pays the counterparty the amount by
          which the price of the commodity is above the contracted ceiling,
   (iv)   basis protection swaps, which are arrangements that guarantee the
          price differential of oil or gas from a specified delivery point
          or points, and
   (v)    collar arrangements that establish an index-related price below
          which the counterparty pays the Company and a separate index-
          related price above which the Company pays the counterparty.

Commodity markets are volatile, and as a result, Chesapeake's hedging activity is dynamic. As market conditions warrant, the Company may elect to settle a hedging transaction prior to its scheduled maturity date and, as a result, realize a gain or loss on the transaction.

Results from commodity hedging transactions are reflected in oil and gas sales to the extent related to the Company's oil and gas production. The Company only enters into commodity hedging transactions related to the Company's oil and gas production volumes or CEMI's physical purchase or sale commitments. Gains or losses on crude oil and natural gas hedging transactions are recognized as price adjustments in the months of related production.

The Company has entered into the following "no-cost" natural gas collar transactions:

                                     Estimated   NYMEX-Index   NYMEX-Index
                        Monthly         % of     Floor Price  Ceiling Price
                     Volume (mmbtu)  Production  (per mmbtu)   (per mmbtu)
  2001
  April                1,800,000         15%        $4.00        $6.08
  May                  1,860,000         16%         4.00         6.08
  June                 2,400,000         19%         4.25         6.26
  July                 2,480,000         19%         4.25         6.26
  August               2,480,000         19%         4.25         6.26
  September            2,400,000         18%         4.25         6.26
  October              1,860,000         13%         4.00         6.08
  November             1,800,000         13%         4.00         6.08
  December             1,860,000         13%         4.00         6.08
  Totals/Averages     18,940,000         16%        $4.11        $6.16

  2002
  January                620,000          5%        $4.00        $5.75
  February               560,000          5%         4.00         5.75
  March                  620,000          4%         4.00         5.75
  April                1,200,000          9%         4.00         5.38
  May                  1,240,000          9%         4.00         5.38
  June                 1,200,000          9%         4.00         5.38
  July                 1,240,000          9%         4.00         5.38
  August               1,240,000          9%         4.00         5.38
  September            1,200,000          9%         4.00         5.38
  October              1,240,000          9%         4.00         5.38
  November               600,000          5%         4.00         5.75
  December               620,000          4%         4.00         5.75
  Totals/Averages     11,580,000          7%        $4.00        $5.53


  The Company has entered into the following natural gas swap arrangements:

                                                               NYMEX-
                              Monthly          Estimated       Index
               Months          Volume            % of       Strike Price
                              (MMBtu)         Production    (per MMBtu)

  January 2001               4,960,000            40%          $6.03
  February 2001              5,320,000            49%           6.12
  March 2001                 4,650,000            36%           5.11
  April 2001                 5,400,000            46%           4.84
  May 2001 (A)               8,060,000            69%           4.97
  June 2001 (A)              6,600,000            53%           5.04
  July 2001 (A)              6,820,000            51%           5.05
  August 2001 (A)            6,820,000            51%           5.05
  September 2001 (A)         6,600,000            50%           5.02
  October 2001 (A)           4,340,000            31%           5.58
  November 2001 (A)          4,200,000            30%           5.90
  December 2001 (A)          4,340,000            30%           6.01
  January 2002 (A)           4,650,000            34%           5.98
  February 2002 (A)          4,200,000            33%           5.78
  March 2002 (A)             4,650,000            33%           5.43
  April 2002 (A)             5,700,000            42%           4.85
  May 2002 (A)               5,890,000            42%           4.81
  June 2002 (A)              5,700,000            42%           4.80
  July 2002 (A)              5,890,000            42%           4.81
  August 2002 (A)            5,890,000            42%           4.81
  September 2002 (A)         5,700,000            42%           4.81
  October 2002 (A)           5,890,000            42%           4.80
  November 2002 (A)          2,100,000            16%           4.97
  December 2002 (A)          2,170,000            15%           5.06
  Totals/Averages
   (2001 & 2002 combined)  126,540,000            35%           5.23

  (A)  Cap swap - limits payment by counter party to $1.00-$1.50/mmbtu.

The Company has entered into crude oil swap arrangements designed to hedge 5,000 barrels per day at a NYMEX Index strike price of $29.76 per barrel in January through December 2001, and 10,000 barrels per month at an average price of $29.12 per barrel.

The information in this release includes certain forward-looking statements that are based on assumptions that in the future may prove not to have been accurate. Those statements, and Chesapeake Energy Corporation's business and prospects, are subject to a number of risks, including production variances from expectations, uncertainties about estimates of reserves, volatility of oil and gas prices, the need to develop and replace reserves, the substantial capital expenditures required to fund operations, environmental risks, drilling and operating risks, risks related to exploratory and developmental drilling, competition, government regulation, and the ability of the company to implement its business strategy. These and other risks are described in the company's documents and reports that are available from the United States Securities and Exchange Commission, including those discussed under Risk Factors in the report filed on Form 10-K for the year ended December 31, 2000.

SOURCE: Chesapeake Energy Corporation

Contact: Marc Rowland, Executive Vice President and Chief Financial
Officer, 405-879-9232, or Tom Price, Jr., Senior Vice President, Corporate
Development, 405-879-9257, both of Chesapeake Energy Corporation

Company News On-Call: http://www.prnewswire.com/comp/138877.html or fax,
800-758-5804, ext. 138877