Chesapeake Energy Corporation Updates Its 2012 Operating Plan in Response to Low Natural Gas Prices

Chesapeake Energy Corporation (NYSE:CHK) today provided an update on
additional steps it is taking to continue creating shareholder value in
response to the lowest natural gas prices in the past 10 years.

First, Chesapeake plans to further reduce its operated dry gas drilling
activity by 50% to approximately 24 rigs by the 2012 second quarter from
47 dry gas rigs currently in use and by 67% from an average of
approximately 75 dry gas rigs used during 2011. Chesapeake′s operated
dry gas drilling capital expenditures in 2012, net of drilling carries,
are expected to decrease to $0.9 billion, a decrease of approximately
70% from similar expenditures of $3.1 billion in 2011. This anticipated
level of dry gas drilling capital expenditures is the company′s lowest
since 2005. Specifically, during the 2012 second quarter, Chesapeake
plans to have reduced its drilling activity in both the Haynesville and
Barnett shales to six operated rigs each and to 12 operated rigs in the
dry gas area of the Marcellus Shale in northeastern Pennsylvania.

Second, the company plans to immediately curtail approximately 0.5
billion cubic feet (bcf) per day, or 8%, of its current operated gross
gas production of 6.3 bcf per day, which is about 9% of the nation′s
natural gas production. If conditions warrant, the company is prepared
to double this production curtailment to as much as 1.0 bcf per day. In
addition, wherever possible, Chesapeake plans to defer completions of
dry gas wells that have been drilled but not yet completed, and also
plans to defer pipeline connections of dry gas wells that have already
been completed.

As a result of lower drilling and completion activity and production
curtailments in the Haynesville and Barnett shales, Chesapeake projects
that its combined gross operated gas production in these plays will
decline during 2012. Because the Haynesville and Barnett shales have
accounted for virtually all of the nation′s approximate 14 bcf per day
of gas production growth during the past five years, lower production in
these two plays will likely lead to flat or lower total natural gas
production in the U.S. in 2012.

Third, the company intends to reallocate the capital savings from
reduced dry gas drilling, well completion and pipeline connection
activities to its liquids-rich plays that offer superior returns in the
current strong liquids price environment. This reallocation will result
in increased expenditures in certain of Chesapeake′s liquids-rich plays,
including the Eagle Ford Shale, Utica Shale, Mississippi Lime, Granite
Wash, Cleveland, Tonkawa, Niobrara, Bone Spring, Avalon, Wolfcamp, and
Wolfberry. The company estimates that approximately 85% of its 2012
total net operated drilling capital expenditures will be invested in its
liquids-rich plays.

Fourth, Chesapeake plans to further reduce its undeveloped leasehold
expenditures, the majority of which have been focused on liquids-rich
plays during the past three years. The company is now targeting to
invest approximately $1.4 billion in undeveloped leasehold expenditures
in 2012 (net of joint venture partner reimbursements), of which
approximately 90% will target liquids-rich plays and 100% will be in
plays where the company is already active. This compares to undeveloped
leasehold expenditures, net of joint venture partner reimbursements, of
approximately $3.4 billion and $5.8 billion in 2011 and 2010,
respectively.

Management Comments

Aubrey K. McClendon, Chesapeake′s Chief Executive Officer, commented,
'An exceptionally mild winter to date has pressured U.S. natural gas
prices to levels below our prior expectations and below levels that are
economically attractive for developing dry gas plays in the U.S., shale
or otherwise. Having led the industry in natural gas production growth
over the past 10 and five years, we recognize the need to demonstrate
leadership and take action now in order to protect value for our
shareholders. During the past five years, our gross operated natural gas
production has increased from approximately 2.1 bcf per day to 6.3 bcf
per day currently, and accounted for approximately 30% of the nation′s
total growth in natural gas production.

'In addition, we have elected to further increase the percentage of our
total net operated drilling capital expenditures allocated to
liquids-rich plays to approximately 85% in order to capture returns that
are currently far superior to dry gas plays. We have committed to cut
our dry gas drilling to bare minimum levels that are likely to be
maintained until expected drilling economics on dry gas plays return to
levels competitive with expected returns in Chesapeake′s lineup of
liquids-rich plays, which we believe is the best in the industry. As in
previous natural gas pricing downturns, Chesapeake is promptly
responding to rapidly changing market conditions, and we hope today′s
announcement helps disprove the view held by some industry observers
that producers fail to act rationally in times of unusually low natural
gas prices.

'Furthermore, we are very pleased that our strategic decisions over the
past four years have created the opportunity and flexibility for
Chesapeake to shift its focus from dry gas plays to liquids-rich plays.
Our liquids production has increased from an average of approximately
32,000 barrels (bbls) per day in 2009 to current production of almost
110,000 bbls per day. This performance is the second-best U.S. liquids
growth rate in the industry, both on an absolute and a relative basis.
As a result, we anticipate that more than 50% of Chesapeake′s 2012
revenue will come from its oil and natural gas liquids production, based
on current NYMEX strip prices and Chesapeake′s current hedging positions.

'Finally, we remain on track to meet our debt reduction target of $9.5
billion by year-end 2012 and to increase our liquids production to more
than 250,000 bbls per day by 2015, which should represent one of the
industry′s best liquids production growth stories during the next four
years. We have also captured the nation′s best natural gas resource
base, which will become increasingly valuable in the years ahead as
demand initiatives in the power generation, transportation, industrial
and export sectors gain further traction and enable consumers to more
completely embrace natural gas as a clean, affordable, abundant,
American resource to fuel an increasing portion of their energy futures.?

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, Mississippi Lime, Bone Spring,
Avalon, Wolfcamp, Wolfberry, Eagle Ford, Niobrara, Three Forks/Bakken
and Utica unconventional liquids-rich plays.The company
has also vertically integrated its operations and owns substantial
midstream, compression, drilling, trucking, pressure pumping and other
oilfield service assets directly and indirectly through its subsidiaries
Chesapeake Midstream Development, L.P. and Chesapeake Oilfield Services,
L.L.C. and its affiliate Chesapeake Midstream Partners, L.P. (NYSE:CHKM).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 news releases.

This news release includes 'forward-looking statements' that give
Chesapeake's current expectations or forecasts of future events,
including anticipated reductions in drilling and completion activities
in natural gas plays, curtailment of natural gas production, capital
reallocation to liquids-rich plays and further reductions in undeveloped
leasehold expenditures. Although Chesapeake believes the expectations
and forecasts reflected in these forward-looking statements are
reasonable, it 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 may cause actual results
to differ materially from expected results include a sudden rebound in
U.S. natural gas prices, changes in market demand and operational
constraints.Factors affecting Chesapeake′s business are
described under 'Risk Factors' in Chesapeake's 2010 Form 10-K filed with
the U.S. Securities and Exchange Commission on March 1, 2011. Chesapeake
cautions you not to place undue reliance on its forward-looking
statements, which speak only as of the date of this news release, and
undertakes no obligation to update this information.

Chesapeake Energy Corporation

Investor Contacts:

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