Chesapeake Energy Corporation Unveils Bold Plan to Transform U.S. Transportation Fuels Market and Reduce OPEC Oil Imports

In an effort to help break OPEC′s 38-year stranglehold on the U.S.
economy and to lower energy costs to American consumers, enhance
national security, stimulate economic growth, create hundreds of
thousands of high-paying jobs and improve the environment, Chesapeake
Energy Corporation (NYSE:CHK) today unveiled its plan for an achievable,
scalable and affordable pathway toward a transportation future that runs
on America′s own abundant supplies of natural gas and oil from deep
shale and other unconventional formations. Central to this
private-sector initiative to stimulate world-class technological
innovation and stronger economic growth is the creation of a $1.0
billion venture capital fund, Chesapeake NG Ventures Corporation (CNGV),
dedicated to identifying and investing in companies and technologies
that will replace the use of gasoline and diesel derived primarily from
OPEC oil with domestic oil, natural gas and natural gas-to-liquids (GTL)
fuels.

To fund this effort, Chesapeake will redirect approximately 1-2% of its
forecasted annual drilling budget away from efforts to increase natural
gas supply toward projects that will instead stimulate increased natural
gas demand. Over the next 10 years, the company anticipates committing
at least $1.0 billion to CNGV initiatives.

Aubrey K. McClendon, Chesapeake′s Chief Executive Officer, commented,
'We have analyzed the U.S. transportation sector during the past four
years to determine how to create the best pathway to move our country
away from dependence on OPEC oil and the resulting yearly transfer of
more than $400 billion of American wealth to foreign countries, many of
them often unfriendly to U.S. interests. As a result of our analysis,
Chesapeake has developed a three-pronged plan to move America toward
greater energy independence and enhanced national security during the
next 10 years:

• 
  Increase existing domestic onshore oil and natural gas liquids (NGLs)
  production of approximately 8 million barrels a day by 3-4 million
  barrels a day through the acceleration of horizontal drilling and
  hydraulic fracturing to develop the enormous unconventional oil and
  NGL resources that underlie many parts of our country;
  
• 
  Invest in enough publicly accessible compressed natural gas (CNG) and
  liquefied natural gas (LNG) fueling stations to reach a tipping point
  where original equipment manufacturers (OEMs) of all vehicular classes
  will have sufficient confidence to increase their production of CNG
  and LNG vehicles and provide American businesses and consumers access
  to vehicles that run on a cleaner fuel made by and for Americans that
  should be approximately $1.50 - $2.00 per gallon cheaper than gasoline
  and diesel; and
  
• 
  Deploy innovative and scalable GTL processes to convert natural gas
  into a room temperature, tank-ready, liquid transportation fuel that
  can be blended with existing supplies of gasoline and diesel or used
  as a stand-alone replacement product that is cleaner and more
  affordable and creates high-paying American jobs rather than foreign
  jobs.?
  

McClendon continued, 'Chesapeake is so convinced of the economic
attractiveness of this plan that we are redirecting approximately 1-2%
of our annual drilling cap-ex over the next 10 years, or at least $1.0
billion in total, to stimulate market adoption of CNG, LNG and GTL
fuels. We also intend to take full advantage of the associated cost
savings and emissions reductions by accelerating the conversion of all
4,500 of Chesapeake′s light duty and 400 of our heavy duty fleet
vehicles to run on CNG, which will reduce our fuel costs by an estimated
$15-20 million per year. In addition, we are converting at least 100 of
our drilling rigs and all of our planned hydraulic fracturing equipment
to run on LNG. Just converting our rigs and hydraulic fracturing
equipment will cut the company′s diesel fuel consumption by
approximately 350,000 gallons a day and save the company approximately
$230 million annually, bringing our overall CNG and LNG fuel savings to
approximately $250 million.?

Company Initiates Plan with its First Two Demand-Enhancement
Investments in CNGV

Investment #1: Clean Energy Fuels Corp. ? LNG
Fueling Infrastructure:

Chesapeake has agreed to invest $150 million in newly issued convertible
debt of Clean Energy Fuels Corp. (Nasdaq:CLNE), based in Seal Beach,
California. The investment, designed to provide a low-cost, low-carbon
American alternative to diesel fuel derived from foreign oil for
heavy-duty trucks, will be made in three equal $50 million tranches, the
first of which has been made and the other two are planned for June 2012
and June 2013. The convertible debt carries a 7.5% interest rate and a
22.5% conversion premium. Clean Energy will use Chesapeake′s $150
million investment to accelerate its build-out of LNG fueling
infrastructure for heavy-duty trucks at truck stops across interstate
highways in the U.S., thereby creating the foundation for 'America′s
Natural Gas Highway System.?

McClendon noted, 'This investment alone is projected to help underwrite
approximately 150 LNG truck fueling stations, increasing by more than
tenfold the number of publicly accessible LNG fueling stations and
providing a foundational grid for heavy-duty trucks to have ready access
to cleaner and more affordable American natural gas fuel along major
interstate highway corridors. As confidence grows in the build-out of a
national grid of CNG and LNG fueling infrastructure, we are confident
that OEMs of all vehicular classes will vastly increase their production
of CNG and LNG vehicles. Both businesses and consumers will then be able
on a large scale to acquire these vehicles and embrace a cleaner,
American fuel that costs about $1.50-$2.00 per gallon less than gasoline
and diesel. We believe that a coast-to-coast and border-to-border
build-out of CNG and LNG fueling stations will require approximately
$1.5-$2.0 billion to complete, and we believe that a combination of
private sector interests will step up to provide this capital in the
next few years. The prospect of delivering a clean, American-made diesel
fuel alternative at a substantial cost savings will be a sufficient
incentive for this capital to be invested.

'The conversion of the heavy-duty truck market to natural gas would also
provide very significant environmental benefits. According to EPA data,
use of natural gas in heavy-duty transportation will significantly cut
emissions of carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen oxide
(NOx) and particulates, substantially reducing air pollution and
improving public health.?

Investment #2: Sundrop Fuels, Inc. ? Biobased
'Green Gasoline? Made from Natural Gas and Cellulosic Material:

Chesapeake has agreed to invest $155 million in a 50% ownership stake in
Sundrop Fuels, Inc., a privately held cellulosic biofuels company based
in Louisville, Colorado. The investment over the next two years will
fund construction of the largest nonfood biomass-based 'green gasoline?
plant in the world, capable of annually producing more than 40 million
gallons of ultra-clean gasoline from natural gas and waste cellulosic
material. The investment promises to accelerate the development of an
affordable, stable, room-temperature, natural gas-based fuel for
immediate use in today′s automobiles, diesel engine vehicles and
aircraft.

The first $35 million tranche of Chesapeake′s investment has been funded
and the remaining tranches of preferred equity will be scheduled around
certain funding and operational milestones to be reached over the next
two years. The investment gives Chesapeake 50% of Sundrop Fuels′ equity
on a fully diluted basis. The CNGV investment will be augmented by an
additional $20 million pro rata investment by a current investor, Palo
Alto, California-based venture capital firm Oak Investment Partners,
which along with Sundrop Fuels′ management and Menlo Park,
California-based venture capital firm Kleiner Perkins Caufield & Byers,
have provided substantially all of Sundrop Fuels′ capital to date.

Sundrop Fuels′ plant is a critical strategic development to initiate the
commercialization of the company′s promising biofuels gasification
process, which is unique among all other conversion processes in
existence today. This gasification process is the foundational
technology for a number of chemical processes converting natural gas to
higher value chemicals and fuels. This technology will utilize a proven
methanol-to-gasoline process for producing tank-ready fuel, rather than
the more capital intensive Fischer-Tropsch (F-T) process.  The company
expects to break ground in early 2012 and be in full production by late
2013. Full-scale commercial plants are expected to be 5-10 times the
size of the initial plant, with the first such plant scheduled to break
ground approximately one year after start-up of the commercial
demonstration plant.

McClendon commented, 'The U.S. Department of Energy has placed a
priority on seeking advanced, cleaner-burning, sustainable biomass-based
fuels capable of becoming immediate drop-in replacements for gasoline
and diesel fuels and still use our nation′s existing liquid fuel-based
distribution infrastructure. After extensive evaluation and due
diligence of various GTL processes during the past three years, we
believe there is no doubt Sundrop Fuels′ proprietary approach will be a
breakthrough to achieving affordable and scalable GTL fuels using
America′s natural gas and America′s nonfood biomass to produce a
tank-ready green biogasoline replacement or supplemental fuel for
gasoline and diesel.

'The clean, abundant and affordable qualities of American shale natural
gas are well documented. With Sundrop Fuels′ efficient synthesis
gasification process, natural gas becomes the enabling technology for a
safer, stronger and greener economy. Natural gas supplies the missing
link ? hydrogen ? needed to turn our nation′s biomass waste stream into
a bountiful flow of truly green biogasoline that can fuel our cars,
trucks, aircraft and industry. This breakthrough technology creates
extraordinary economic and environmental upside for our country by
decreasing our dependence on OPEC oil and lowering greenhouse gas
emissions while at the same time creating thousands of high-paying
American jobs. It also creates significant upside for Chesapeake and its
shareholders by providing a large new demand driver for American natural
gas.

'The commercial readiness of Sundrop Fuels′ technology is indicative of
Chesapeake′s approach to investing in core technologies that address
fundamental process and economic issues historically associated with GTL
without taking on massive R&D expenditures. This transaction will enable
our country to begin producing tank-ready fuels from American natural
gas and start reducing OPEC oil imports.?

Management Summary

McClendon concluded, 'We expect to make investment opportunities with
CNGV available to other natural gas producers, venture capitalists,
private equity players and other large-scale energy and technology
investors, especially those looking for breakthroughs in scalable, green
energy technologies. Chesapeake believes CNG, LNG and GTL processes
provide the most rapid, economic and scalable green energy investment
alternatives. Our CNGV fund, which will be at least $1.0 billion in
size, will represent a large and reliable source of capital to
entrepreneurial companies with strong business models, validated
technologies and experienced management teams focused on creating value
by enhancing demand for American natural gas.

'We believe the long-term solution to America′s economic and energy
challenges will come from American natural resources combined with
American ingenuity and innovation. Our plan lays out a clear, affordable
and achievable pathway for the rejuvenation of the American economy, the
further greening of our environment and the reorientation of our foreign
policy away from being captive to OPEC oil dependence. Working together,
we can create a more prosperous, cleaner and safer America and, once and
for all, begin to develop a sustainable energy policy based on reliance
on and development of America′s own energy resource bounty and break the
stranglehold that OPEC oil has had on our country for nearly four
decades. Chesapeake is 100% committed to helping make this happen for
the benefit of our shareholders and for our country.?

Media Conference Call Details

Chesapeake has scheduled a conference call for news media at 5:00 p.m.
EDT on Monday, July 11, 2011. The telephone number to access the
conference call is 913-312-0639 or toll-free 888-637-7738.
The passcode for the call is 5210422. We encourage those who
would like to participate in the call to place calls between 4:50 and
5:00 p.m. EDT.

For those unable to participate in the conference call, a replay will be
available for audio playback at 9:00 p.m. EDT on Monday, July 11, 2011,
and will run through midnight Friday, July 15, 2011. The number to
access the conference call replay is 719-457-0820 or toll-free 888-203-1112.
The passcode for the replay is 5210422.

The audio portion of the conference call will also be webcast live on
Chesapeake′s website at www.chk.com
in the 'Events? subsection of the 'Investors? section of the company′s
website.

Chesapeake Energy Corporation
is the second-largest producer of natural gas, a Top 15 producer of oil
and natural gas liquids and the most active driller of new wells in the
U.S.Headquartered in Oklahoma City, the company's
operations are focused on discovering and developing unconventional
natural gas and oil fields onshore in the U.S. Chesapeake owns leading
positions in the Barnett, Haynesville, Bossier, Marcellus and Pearsall
natural gas shale plays and in the Granite Wash, Cleveland, Tonkawa,
Mississippian, Bone Spring, Avalon, Wolfcamp, Wolfberry, Eagle Ford,
Niobrara, Three Forks/Bakken and Utica unconventional liquids plays.The company has also vertically integrated its operations and owns
substantial midstream, compression, drilling and oilfield service assets.Chesapeake′s stock is listed on the New York Stock Exchange under
the symbol CHK.Further information is available at www.chk.com
where Chesapeake routinely posts announcements, updates, events,
investor information, presentations and press releases.

Clean Energy Fuels Corp.
is the largest provider of natural gas fuel for transportation in North
America and a global leader in the expanding natural gas vehicle market.
It has operations in CNG and LNG vehicle fueling, construction and
operation of CNG and LNG fueling stations, biomethane production,
vehicle conversion and compressor technology. Clean Energy fuels over
22,700 vehicles at 238 strategic locations across the United States and
Canada with a broad customer base in the refuse, transit, trucking,
shuttle, taxi, airport and municipal fleet markets. Clean Energy del
Peru, a joint venture, fuels vehicles at two stations and provides CNG
to commercial customers in Peru. Clean Energy owns (70%) and operates a
landfill gas facility in Dallas, Texas, that produces renewable natural
gas, or biomethane, for delivery in the nation′s gas pipeline network,
and has agreed to build a second facility in Michigan. Clean Energy owns
and operates LNG production plants in Willis, Texas, and Boron,
California, with combined capacity of 260,000 LNG gallons per day and
that are designed to expand to 340,000 LNG gallons per day as demand
increases. NorthStar, a wholly owned subsidiary, is the recognized
leader in LNG/LCNG (liquefied to compressed natural gas) fueling system
technologies and station construction and operations. BAF Technologies,
Inc., a wholly owned subsidiary, is a leading provider of natural gas
vehicle systems and conversions for taxis, vans, pick-up trucks and
shuttle buses. IMW Industries, Ltd., a wholly owned subsidiary based in
Canada, is a leading supplier of compressed natural gas equipment for
vehicle fueling and industrial applications with more than 1,200
installations in 24 countries. www.cleanenergyfuels.com

Sundrop Fuels, Inc. is
a gasification-based renewable energy company based in Louisville,
Colorado.The company uses an ultrahigh-temperature heat
transfer process to gasify virtually any cellulosic feedstock into
synthesis gas, which is then converted into clean, affordable drop-in
biogasoline and other liquid transportation biofuels for use in today′s
automobiles, diesel engines and aircraft via the nation′s existing
pipeline infrastructure.At the core of the company′s
intellectual property is its Sundrop Fuels RP Reactor?, a
high-efficiency radiant particle technology that is more than 20-times
faster than conventional convection heat transfer methods. By creating
ultrahigh temperatures to drive the endothermic gasification reaction,
Sundrop Fuels technology lowers significantly the high capital cost and
intensive energy use that have been barriers to large-scale application
of gas-to-liquid technologies in nonstranded gas markets like the U.S.In addition, Sundrop Fuels is able to maximize its synthesis gas
production by integrating clean, abundant, American natural gas with
biomass feedstock, facilitating the most efficient utilization of
hydrogen from both the biomass and natural gas to produce higher yields
than any other biomass processes.The combination of
Sundrop Fuels technology with American natural gas will provide the
foundation for large-scale biorefineries that will dramatically reduce
both the nation′s dependence on OPEC oil and the amount of greenhouse
gases and other pollutants released into the atmosphere.Sundrop
Fuels plans to break ground in 2012 demonstrating its RP Reactor?
technology with ExxonMobil′s Methanol-to-Gasoline (MTG) process. The
company expects to go into full production 24-30 months after
groundbreaking.

Backing for Sundrop Fuels comes from its strategic partner,
Chesapeake Energy Corporation, and by two of the world′s premier venture
firms, Oak Investment Partners and Kleiner Perkins Caulfield & Byers.Sundrop Fuels plans to build and operate large-scale biorefineries
each generating more than 200 million gallons of drop-in transportation
biofuels annually.For more information visit www.sundropfuels.com.

Chesapeake Energy

Jeffrey L. Mobley, CFA, 405-767-4763

jeff.mobley@chk.com

or

John
J. Kilgallon, 405-935-4441

john.kilgallon@chk.com

or

Media
Contacts:

Michael Kehs, 405-935-2560

michael.kehs@chk.com

or

Jim
Gipson, 405-935-1310

jim.gipson@chk.com

or

Clean
Energy

Bruce Russell, 310-559-4955 ext. 101

brussell@cleanenergyfuels.com

or

Sundrop
Fuels

Steven Silvers, 303-596-9960

stevensilvers@gbsm.com