Chesapeake Energy Corporation Announces $510 Million of Acquisitions, Adds Significantly to Hedging Positions and Increases 2004 Production Forecasts
Agreements With Concho Resources and Two Others Further Strengthen Chesapeake's Positions in the Mid-Continent, Permian Basin and Onshore Gulf Coast Regions
Chesapeake Hedges 100% of Projected Gas Production Volumes from the Acquired Properties at $5.68 Per Mcf for 2004 and $5.37 Per Mcf for 2005
PRNewswire-FirstCall
OKLAHOMA CITY, Okla.

Chesapeake Energy Corporation today announced that it has entered into agreements to acquire $510 million of Mid-Continent, Permian Basin and onshore Gulf Coast oil and natural gas assets through recent agreements to acquire privately- owned Concho Resources Inc. for $420 million and two smaller property acquisitions totaling $90 million. In these transactions, Chesapeake has acquired or agreed to acquire an internally estimated 320 billion cubic feet of gas equivalent proved reserves (bcfe), 195 bcfe of probable and possible reserves and current production of 70 million cubic feet of natural gas equivalent production (mmcfe) per day. Chesapeake's anticipated year-end 2003 proved oil and natural gas reserves, pro forma for these acquisitions, are expected to exceed 3.4 trillion cubic feet of natural gas equivalent (tcfe).

After allocating $70 million of the purchase price to unevaluated leasehold, probable and possible reserves, and gas gathering systems, Chesapeake's acquisition cost per thousand cubic feet of gas equivalent (mcfe) of proved reserves will be $1.38. Including leasehold and anticipated future drilling costs for fully developing the proved, probable and possible reserves, the company estimates that its all-in acquisition cost for the 515 bcfe of estimated reserves will be $1.59 per mcfe.

The proved reserves have a reserves-to-production index of 12.5 years, are 75% natural gas and are 67% proved developed. Initial lease operating expenses on the acquired properties are expected to average $0.56 per mcfe, which compares favorably to the $0.52 per mcfe reported by Chesapeake during the first three quarters of 2003 and the $0.65 per mcfe reported by the company's peer group during the first three quarters of 2003.

The Concho acquisition is expected to close on January 30, 2004 and is subject to customary closing conditions. One of the other two transactions has recently closed and the other will close in January 2004. The company intends to finance the acquisitions using approximately 50% common equity and 50% short-term and/or long-term borrowings.

Background Information on Concho Resources Inc.

Concho Resources Inc. is a privately-owned Midland-based independent oil and natural gas producer co-founded by Timothy A. Leach, Steven L. Beal, David W. Copeland and David A. Chroback in association with New York-based Yorktown Energy Partners and certain other investors. In 2002, Concho acquired the assets of Oklahoma City-based independent oil and natural gas producer Ricks Exploration, Inc., which formed the core of Concho's assets. Ricks Exploration was formed in 1984 by Art L. Swanson and Ran Ricks, Jr. and it was the successor to independent oil and natural gas operations first begun in 1970 in Oklahoma City by Ran Ricks, Jr. Over the years, Ricks and Concho's areas of operational focus have been primarily in the Permian Basin and the Mid-Continent regions.

In the Mid-Continent region, Chesapeake is the largest natural gas producer with approximately a 14% market share and daily production of approximately 725 mmcfe and internally estimated proved reserves of approximately 2,950 bcfe (pro forma for today's transactions). In the Permian Basin, Chesapeake believes it will rank among the 20 largest producers in the region after completion of the Concho acquisition. Pro forma for Concho, Chesapeake estimates its daily production in the Permian Basin will exceed 75 mmcfe per day and its proved reserves will exceed 350 bcfe. Chesapeake believes its ownership of the acquired properties will create operational efficiencies, administrative expense savings and additional developmental and exploratory drilling opportunities.

The assets acquired in the two smaller transactions are located in the Permian Basin and in the Goliad County, Texas area of Chesapeake's onshore Gulf Coast region. In Goliad County, Chesapeake has agreed to purchase a 50% interest in and operations of a large prospect area in which it had previously acquired a 37.5% working interest through its acquisition of Canaan Energy Corporation in 2002.

 Chesapeake Increases 2004 Production Guidance and Announces Significant
          Increases in its Oil and Natural Gas Hedging Positions

To account for the transactions announced today, Chesapeake is increasing its 2004 production forecast by 9% from a range of 297-303 bcfe (820 mmcfe per day at the mid-point) to a range of 323-329 (890 mmcfe per day at the mid- point). Approximately 89% of the company's production is expected to be natural gas with 11% from oil and natural gas liquids.

During the past several weeks, Chesapeake has significantly increased its oil and natural gas hedging positions for 2004 and 2005. During this time, the company has hedged an additional 108 bcf of natural gas at an average NYMEX price of $5.38 per mcf and an additional 121 mbo at $31.16. The following tables compare Chesapeake's projected 2004-2007 oil and natural gas production volumes that have been hedged as of December 19, 2003 to what had been hedged as of November 12, 2003:

                  Hedged Positions as of December 19, 2003
                                   Oil                      Natural Gas
  Quarter or Year         % Hedged      $ NYMEX        % Hedged      $ NYMEX
  2004 1Q                    88 %       $28.58            98 %       $5.97
  2004 2Q                    88 %       $28.81            74 %       $4.97
  2004 3Q                    72 %       $28.75            59 %       $4.89
  2004 4Q                    63 %       $28.46            47 %       $5.08
  2004 Total                 78 %       $28.66            69 %       $5.32
  2005                        -              -            27 %       $5.04
  2006                        -              -            11 %       $4.88
  2007                        -              -             8 %       $4.76


                  Hedged Positions as of November 12, 2003
                                  Oil                      Natural Gas
  Quarter or Year        % Hedged      $ NYMEX        % Hedged      $ NYMEX
  2004 1Q                   100 %       $28.58            70 %       $5.93
  2004 2Q                    99 %       $28.62            58 %       $4.95
  2004 3Q                    91 %       $28.75            47 %       $4.84
  2004 4Q                    84 %       $28.46            37 %       $4.99
  2004 Total                 94 %       $28.61            53 %       $5.25
  2005                        -              -            16 %       $4.82
  2006                        -              -             9 %       $4.74
  2007                        -              -             8 %       $4.76

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 Comments

Aubrey K. McClendon, Chesapeake's Chief Executive Officer, commented, "Today's announcements provide further evidence of our ongoing commitment to creating industry-leading shareholder value through a sharp strategic focus on further consolidation of high-quality oil and natural gas assets and on identifying and executing opportunistic hedging opportunities. Today's announced acquisitions fit very well with our existing Mid-Continent stronghold and further strengthen our growing Permian Basin and onshore Gulf Coast asset holdings. In addition, these transactions are consistent with Chesapeake's business strategy of creating value by delivering profitable organic growth from our developmental and exploratory drilling programs and by acquiring and developing low-cost, long-lived, under-exploited oil and natural gas assets.

In addition, the dramatic increase in oil and natural gas prices during the past few weeks has given us the ability to lock-in 100% of our anticipated gas production volumes from today's acquisitions at prices well above the price decks we used to purchase these properties. In this time of tight oil and natural gas markets, we believe accretive returns to our shareholders can be generated from acquisitions by being willing and able to hedge the acquired production volumes at very attractive prices during periodic price spikes. We believe our focused acquisitions of high-quality properties followed by opportunistic hedging and combined with our value-added drilling programs will continue to be a winning strategy for our shareholders in the years ahead."

Conference Call Information

A conference call has been scheduled for this morning, December 22, 2003 at 9:00 a.m. EST to discuss this press release. The telephone number to access the conference call is 913.981.5518 and the passcode is 209876. For those unable to participate in the conference call, a replay will be available from 12:00 p.m. EST on Monday, December 22, 2003 through midnight EST on Tuesday, January 6, 2004. The number to access the conference call replay is 719.457.0820 and the passcode is 209876. The conference call will also be simulcast live on the Internet and can be accessed at www.chkenergy.com by selecting "Conference Calls" under the "Investor Relations" section. The webcast of the conference call will be available on the website for one year.

This press release and the accompanying Outlooks include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our current expectations or forecasts of future events. They include estimates of oil and gas reserves, expected oil and gas production and future expenses, projections of future oil and gas prices, planned capital expenditures for drilling, leasehold acquisitions and seismic data, and statements concerning anticipated cash flow and liquidity, business strategy and other plans and objectives for future operations. Disclosures concerning derivative contracts and their estimated contribution to our future results of operations are based upon market information as of a specific date. These market prices are subject to significant volatility. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results are described under "Risk Factors" in Item 1 of our 2002 Form 10-K/A and subsequent filings with the Securities and Exchange Commission. They include the volatility of oil and gas prices; adverse effects our substantial indebtedness could have on our operations and future growth; our ability to compete effectively against strong independent oil and gas companies and majors; the cost and availability of drilling and production services; possible financial losses as a result of our commodity price and interest rate risk management activities; uncertainties inherent in estimating quantities of oil and gas reserves, including reserves we acquire, projecting future rates of production and the timing of development expenditures; exposure to potential liabilities of acquired properties; our ability to replace reserves; the availability of capital; changes in interest rates; and drilling and operating risks. We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release, and we undertake no obligation to update this information.

The Securities and Exchange Commission has generally permitted oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use the terms "probable" and "possible" reserves or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC's guidelines may prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the company.

Chesapeake Energy Corporation is one of the six largest independent U.S. natural gas producers. 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 www.chkenergy.com .

                               SCHEDULE "A"

               CHESAPEAKE'S OUTLOOK AS OF DECEMBER 22, 2003

  Quarter Ending March 31, 2004; Year Ending December 31, 2004.

We have adopted a policy of periodically providing investors with guidance on certain factors that affect our future financial performance. As of December 22, 2003, we are using the following key assumptions in our projections for the first quarter of 2004 and the full-year 2004.

The primary changes from our November 12, 2003 guidance are explained as follows:

   1) We have increased our production forecasts to reflect the three
      acquisitions announced today.
   2) We have updated the projected effects from changes in our hedging
      positions.
   3) We have included our expectations for future NYMEX oil and gas prices
      to illustrate hedging effects only.  They are not a forecast of our
      expectations for 2004 oil and natural gas prices.
   4) We have included the pro forma effects of additional equity and debt
      issuance to fund the acquisitions announced today.


                                          Quarter Ending   Year Ending
                                          March 31, 2004    December 31,
                                                            2004
  Estimated Production:
    Oil - Mbo                                 1,450           5,800
    Gas - Bcf                                 69 - 70         288 - 294
    Gas Equivalent - Bcfe                     78 - 79         323 - 329
    Daily gas equivalent midpoint - in
     Mmcfe                                    875             890
  NYMEX Prices (for calculation of
   realized hedging effects only):
    Oil - $/Bo                               $25.00          $25.00
    Gas - $/Mcf                              $4.50           $4.50
  Estimated Differentials to NYMEX
   Prices:
    Oil - $/Bo                              -$2.50          -$2.50
    Gas - $/Mcf                             -$0.60          -$0.60
  Estimated Realized Hedging Effects
   (based on expected
  NYMEX prices above):
    Oil - $/Bo                              +$3.13          +$2.72
    Gas - $/Mcf                             +$1.48          +$0.68
  Operating Costs per Mcfe of Projected
   Production:
    Production expense                     $0.55 - 0.60      $0.55 - 0.60
    Production taxes (generally 7% of
     O&G revenues)                         $0.25 - 0.29      $0.25 - 0.29
    General and administrative             $0.10 - 0.11      $0.10 - 0.11
    DD&A - oil and gas                     $1.42 - 1.46      $1.42 - 1.46
    Depreciation of other assets           $0.07 - 0.09      $0.07 - 0.09
    Interest expense(a)                    $0.49 - 0.53      $0.49 - 0.53
  Other Income and Expense per Mcfe: (b)
    Marketing and other income             $0.02 - 0.04      $0.02 - 0.04

  Book Tax Rate                             38 %              38 %
  Equivalent Shares Outstanding:
    Basic                                   240,000 m         244,000 m
    Diluted                                 300,000 m         302,000 m

  Capital Expenditures:
    Drilling, Land and Seismic            $175 - $195 mm    $725 - $775 mm

  (a) Does not include gains or losses on interest rate derivatives (SFAS
      133).
  (b) Does not include the cumulative effect of the adoption of SFAS 143 as
      of January 1, 2003.

  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)   For swap instruments, we receive a fixed price for the hedged
        commodity and pay a floating market price, as     defined in each
        instrument, to the counterparty.  The fixed-price payment and the
        floating-price payment are netted, resulting in a net amount due to
        or from the counterparty.

  (ii)  For cap-swaps, Chesapeake receives a fixed price and pays a floating
        market price.  The fixed price received by Chesapeake includes a
        premium in exchange for a "cap" limiting the counterparty's
        exposure.
        In other words, there is no limit to Chesapeake's exposure but there
        is a limit to the downside exposure of the counterparty.

  (iii) Basis protection swaps are arrangements that guarantee a price
        differential of oil or gas from a specified  delivery point.
        Chesapeake receives a payment from the counterparty if the price
        differential is greater than  the stated terms of the contract and
        pays the counterparty if the price differential is less than the
        stated terms of the contract.

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, lock in the gain or loss on the transaction.

Chesapeake enters into oil and natural gas derivative transactions in order to mitigate a portion of its exposure to adverse market changes in oil and natural gas prices. Accordingly, associated gains or loses from the derivative transactions are reflected as adjustments to oil and gas sales. All realized gains and losses from oil and natural gas derivatives are included in oil and gas sales in the month of related production. Pursuant to SFAS 133, certain derivatives do not qualify for designation as cash flow hedges. Changes in the fair value of these non-qualifying derivatives that occur prior to their maturity (i.e. because of temporary fluctuations in value) are reported currently in the consolidated statement of operations as unrealized gains (losses) within oil and gas sales.

Following provisions of SFAS 133, changes in the fair value of derivative instruments designated as cash flow hedges, to the extent effective in offsetting cash flows attributable to hedged risk, are recorded in other comprehensive income until the hedged item is recognized in earnings. Any change in fair value resulting from ineffectiveness is recognized currently in oil and natural gas sales.

  The Company currently has in place the following natural gas swaps:

                                                          % Hedged
                                                                Open Swap
                                          Avg. NYMEX           Positions as
                     Avg. NYMEX             Price     Assuming     a %
                       Strike             Including     Gas    of Estimated
              Open     Price    Gain from   Open &   Production   Total
              Swaps   Of Open     Locked    Locked    in Bcf's     Gas
            in Bcf's   Swaps      Swaps   Positions     of:     Production

  2004:
  1st Qtr     69.5     $5.94      $0.03     $5.97       70.9        98 %
  2nd Qtr     52.8     $4.97      $0.00     $4.97       71.9        74 %
  3rd Qtr     43.2     $4.89      $0.00     $4.89       73.6        59 %
  4th Qtr     35.0     $5.08      $0.00     $5.08       74.6        47 %
  Total
   2004      200.5     $5.31      $0.01     $5.32      291.0        69 %

  Total
   2005       82.1     $5.04      $0.00     $5.04      300.0        27 %

  Total
   2006       32.9     $4.88      $0.00     $4.88      310.0        11 %

  Total
   2007       25.6     $4.76      $0.00     $4.76      320.0         8 %

  TOTALS
  2004-2007  341.1     $5.16      $0.01     $5.17    1,220.0        28 %


Chesapeake has also entered into the following natural gas basis protection swaps:

                                               Assuming Gas
                    Annual                     Production in
                  Volume in        NYMEX          Bcf's
                    Bcf's          less:           of:          % Hedged
  2004              157.4          0.173          291.0            54 %
  2005              109.5          0.156          300.0            37 %
  2006               47.5          0.155          310.0            15 %
  2007               63.9          0.166          320.0            20 %
  2008               64.0          0.166          330.0            19 %
  2009               37.0          0.160          340.0            11 %
  Totals            479.3         $0.164*       1,891.0            25 %

  * weighted average


  The Company has entered into the following crude oil hedging arrangements:

                                                         % Hedged
                                               Assuming        Open Swap
                                      Avg.     Oil            Positions as
                          Open       NYMEX     Production      % of Total
                        Swaps in     Strike    in Mmbo's       Estimated
                         Mmbo's      Price         of:         Production

  Q1 - 2004*             1,270      $28.58        1,450           88 %

  Q2 - 2004*             1,282      $28.86        1,450           88 %

  Q3 - 2004*             1,044      $28.75        1,450           72 %

  Q4 - 2004*               920      $28.46        1,450           63 %

  Total 2004             4,516      $28.68        5,800           78 %

  * Swaps with a knockout price of $21.00, with the exception of 2,000 bopd
    in 2004 with a knockout price of $24.00, with an additional 1,000 bopd
    in Q2 2004 at $24, 1,000 bopd in Q3 and Q4 2004 with a knockout price of
    $23.00, 2,000 bopd for 1/04 and 3-8/04 at a knockout price of $22.00,
    and 3,000 bopd in 2/04 at a knockout price of $22.00.


                               SCHEDULE "B"

          CHESAPEAKE'S PREVIOUS OUTLOOK AS OF NOVEMBER 12, 2003
                      (Provided for Reference only)

            NOW SUPERSEDED BY OUTLOOK AS OF DECEMBER 22, 2003

  Quarter Ending December 31, 2003;  Year Ending December 31, 2003;  Year
   Ending December 31, 2004.

We have adopted a policy of periodically providing investors with guidance on certain factors that affect our future financial performance. As of November 12, 2003, we are using the following key operating assumptions in our projections for the fourth quarter of 2003, full year 2003, and full year 2004.

The primary changes from our October 30, 2003 guidance are explained as follows:

  1) We are including the effects of recently announced capital transactions
     on interest expense and share count.
  2) We have updated the projected effects from changes in our hedging
     positions.
  3) We have included our expectations for future NYMEX oil and gas prices
     to illustrate hedging effects only.
     They are not a forecast of our expectations for 2003 or 2004 oil and
     natural gas prices.

                                 Quarter Ending  Year Ending   Year Ending
                                  December 31,   December 31,  December 31,
                                     2003(c)        2003          2004
  Estimated Production:
    Oil - Mbo                       1,200         4,700         4,700
    Gas - Bcf                       66.8-67.3     241 - 242     269 - 275
    Gas Equivalent - Bcfe           74.0-74.5     269 - 270     297 - 303
    Daily gas equivalent midpoint
     - in  Mmcfe                    807           738           820
  NYMEX Prices (for calculation of
   realized hedging effects only):
    Oil - $/Bo                     $27.45        $30.11        $24.00
    Gas - $/Mcf                    $4.47         $5.36         $4.25
  Estimated Differentials to NYMEX
   Prices:
    Oil - $/Bo                    -$2.50        -$2.11        -$2.50
    Gas - $/Mcf                   -$0.60        -$0.55        -$0.60
  Estimated Realized Hedging
   Effects (based on expected
  NYMEX prices above):
    Oil - $/Bo                    +$1.47        -$1.52        +$4.22
    Gas - $/Mcf                   +$1.02        +$0.01        +$0.65
  Operating Costs per Mcfe of
   Projected Production:
    Production expense            $0.53 - 0.57   $0.53 - 0.57  $0.57 - $0.60
    Production taxes (generally
     7% of O&G revenues)          $0.31 - 0.33   $0.31 - 0.33  $0.27 - $0.30
    General and administrative    $0.09 - 0.10   $0.09 - 0.10  $0.09 - $0.10
    DD&A - oil and gas            $1.38 - 1.40   $1.38 - 1.40  $1.40 - $1.45
    Depreciation of other assets  $0.08 - 0.10   $0.08 - 0.10  $0.08 - $0.10
    Interest expense(a)           $0.50 - 0.55   $0.55 - 0.60  $0.45 - $0.50
  Other Income and Expense per
   Mcfe: (b)
    Marketing and other income    $0.02 - 0.04   $0.02 - 0.04  $0.02 - $0.04

  Book Tax Rate                    38 %           38 %          38 %
  Equivalent Shares Outstanding:
    Basic                          217,000 m     212,000 m     220,000 m
    Diluted                        273,000 m     258,000 m     280,000 m

  Capital Expenditures:
    Drilling, Land and Seismic    $175 - $200mm  $675 - $725mm $675 - $725mm

  (a) Does not include gains or losses on interest rate derivatives (SFAS
      133).
  (b) Does not include the cumulative effect of the adoption of SFAS 143 as
      of January 1, 2003.
  (c) Does not include charges to be taken in current quarter related to
      debt tender.

  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)   For swap instruments, we receive a fixed price for the hedged
        commodity and pay a floating market price, as defined in each
        instrument, to the counterparty.  The fixed-price payment and the
        floating-price payment are netted, resulting in a net amount due to
        or from the counterparty.

  (ii)  For cap-swaps, Chesapeake receives a fixed price and pays a floating
        market price.  The fixed price received by Chesapeake includes a
        premium in exchange for a "cap" limiting the counterparty's
        exposure.
        In other words, there is no limit to Chesapeake's exposure but there
        is a limit to the downside exposure of the counterparty.

  (iii) Basis protection swaps are arrangements that guarantee a price
        differential of oil or gas from a specified  delivery point.
        Chesapeake receives a payment from the counterparty if the price
        differential is greater than the stated terms of the contract and
        pays the counterparty if the price differential is less than the
        stated terms of the contract.

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, lock in the gain or loss on the transaction.

Chesapeake enters into oil and natural gas derivative transactions in order to mitigate a portion of its exposure to adverse market changes in oil and natural gas prices. Accordingly, associated gains or loses from the derivative transactions are reflected as adjustments to oil and gas sales. All realized gains and losses from oil and natural gas derivatives are included in oil and gas sales in the month of related production. Pursuant to SFAS 133, certain derivatives do not qualify for designation as cash flow hedges. Changes in the fair value of these non-qualifying derivatives that occur prior to their maturity (i.e. because of temporary fluctuations in value) are reported currently in the consolidated statement of operations as unrealized gains (losses) within oil and gas sales.

Following provisions of SFAS 133, changes in the fair value of derivative instruments designated as cash flow hedges, to the extent effective in offsetting cash flows attributable to hedged risk, are recorded in other comprehensive income until the hedged item is recognized in earnings. Any change in fair value resulting from ineffectiveness is recognized currently in oil and natural gas sales.

  The Company currently has in place the following natural gas swaps:

                                                           % Hedged
                                                                Open Swap
                                          Avg. NYMEX           Positions as
                     Avg. NYMEX             Price     Assuming    a % of
                       Strike             Including     Gas     Estimated
               Open    Price    Gain from   Open &   Production   Total
              Swaps   Of Open     Locked    Locked    in Bcf's     Gas
            in Bcf's   Swaps      Swaps   Positions     of:     Production
  2003:
  4th Qtr     55.4     $5.59      $0.05     $5.64       67.0       83 %

  2004:
  1st Qtr     47.3     $5.89      $0.04     $5.93       67.6       70 %
  2nd Qtr     39.1     $4.95      $0.00     $4.95       67.6       58 %
  3rd Qtr     32.2     $4.84      $0.00     $4.84       68.4       47 %
  4th Qtr     25.2     $4.99      $0.00     $4.99       68.4       37 %
  Total
   2004      143.8     $5.24      $0.01     $5.25      272.0       53 %

  Total
   2005       45.6     $4.82      $0.00     $4.82      282.0       16 %

  Total
   2006       25.6     $4.74      $0.00     $4.74      292.0        9 %

  Total
   2007       25.6     $4.76      $0.00     $4.76      302.0        8 %

  TOTALS
  2003-2007  296.0     $5.16      $0.01     $5.17      1,215       24 %


Chesapeake has also entered into the following natural gas basis protection swaps:

                                                 Assuming Gas
                        Annual                   Production in
                      Volume in        NYMEX         Bcf's
                        Bcf's          less:          of:       % Hedged
  2003 Remaining         41.4         $0.190         67.0          62 %
  2004                  157.4          0.173        272.0          58 %
  2005                  109.5          0.156        282.0          39 %
  2006                   47.5          0.155        292.0          16 %
  2007                   63.9          0.166        302.0          21 %
  2008                   64.0          0.166        312.0          21 %
  2009                   37.0          0.160        322.0          11 %
  Totals                520.7        $0.167*      1,849.0          28 %

  * weighted average


  The Company has entered into the following crude oil hedging arrangements:

                                                       % Hedged
                                               Assuming        Open Swap
                                      Avg.     Oil            Positions as
                          Open       NYMEX     Production      % of Total
                        Swaps in     Strike    in Mmbo's       Estimated
                         Mmbo's      Price         of:         Production

  Q4 - 2003*              1,223      $28.69       1,225          100 %

  Q1 - 2004*              1,270      $28.58       1,275          100 %

  Q2 - 2004*              1,161      $28.62       1,175           99 %

  Q3 - 2004*              1,044      $28.75       1,150           91 %

  Q4 - 2004*                920      $28.46       1,100           84 %

  Total 2004              4,395      $28.61       4,700           94 %

  * Swaps with a knockout price of $21.00, with the exception of 2,000 bopd
    in 2004 with a knockout price of $24.00, 1,000 bopd in Q3 and Q4 2004
    with a knockout price of $23.00, 1,000 bopd in Q4 2003 with a knockout
    price of $26.00, 3,000 bopd for 11/03 and 12/03 at a knockout price of
    $22.00, 2,000 bopd for 1/04 and 3-8/04 at a knockout price of $22.00,
    and 3,000 bopd in 2/04 at a knockout price of $22.00.

SOURCE: Chesapeake Energy Corporation

CONTACT: Marc Rowland, Executive Vice President and Chief Financial
Officer, +1-405-879-9232, or Tom Price, Jr., Senior Vice President, Investor
Relations, +1-405-879-9257, both of Chesapeake Energy Corporation