Chesapeake Energy Corporation Reports Financial and Operational Results for the 2013 First Quarter

Chesapeake Energy Corporation (NYSE:CHK) today reported financial and
operational results for the 2013 first quarter. Key information related
to the quarter is as follows:

• Adjusted net income per fully diluted share of $0.30 increases
  67% year over year
• Adjusted ebitda of $1.134 billion increases 35% year over year
• Total production increases 9% year over year to 4.0 bcfe per day
• Oil production rises 56% year over year to 103,000 bbls per day
• Capital expenditure levels in line with or below budgeted levels
• Asset sales on track for year with $2.0 billion signed or closed
  to date and multiple other transactions in advanced stages of
  negotiation
• Conference call 9:00 am EDT today; dial-in 913-312-0844,
  passcode 8842603

Chesapeake reported net income available to common stockholders of $15
million, or $0.02 per fully diluted share. These results include the
effects of net unrealized noncash after-tax mark-to-market losses of $94
million from the company′s hedging programs and a net after-tax charge
of $83 million for employee retirement expense and other termination
benefits primarily resulting from a previously announced voluntary
separation program and senior management separations. Adjusting for
these and other items typically not included in earnings estimates by
securities analysts, Chesapeake reported adjusted net income available
to common stockholders of $183 million, an increase of 95% year over
year, and adjusted net income per fully diluted share of $0.30, an
increase of 67% year over year.

The company reported adjusted ebitda of $1.134 billion, an increase of
35% year over year. Operating cash flow, which is cash flow provided by
operating activities before changes in assets and liabilities, was $1.176billion, an increase of 29% year over year. Additional
definitions and reconciliations to comparable financial measures
calculated in accordance with generally accepted accounting principles
of adjusted net income available to common stockholders, operating cash
flow, ebitda and adjusted ebitda are provided on pages 13-15 of this
release.

Steven C. Dixon, Chesapeake′s Acting Chief Executive Officer, said,
'Chesapeake is off to a strong start in 2013. We are beginning to see
the benefits of our operational strategy shift from identifying and
capturing new assets to developing our extensive existing assets and
entering a new era of shareholder value realization. Our operational
focus on the core of the core is enabling our drilling program to
increasingly target the best reservoir rock in each of our key plays. We
are capitalizing on pad drilling efficiencies wherever possible and
leveraging our substantial investments in roads, well pads, gathering
lines, and compression and processing facilities. As a result, we are
generating more efficient production growth, stronger cash flow and
better returns on capital.?

2013 First Quarter Total Production Increases 9% Year over Year to
4.0 Bcfe per Day; Oil Production Increases 56% Year over Year to 103,000
Bbls per Day

Chesapeake′s daily production for the 2013 first quarter averaged
approximately 4.0 billion cubic feet of natural gas equivalent (bcfe),
an increase of 9% from the 2012 first quarter and an increase of 1% from
the 2012 fourth quarter. The company′s production consisted of
approximately 3.0 billion cubic feet (bcf) per day of natural gas and
approximately 157,000 barrels (bbls) per day of liquids, comprised of
approximately 103,000 bbls of oil and approximately 54,000 bbls of NGL.

Dixon noted, 'For the 2013 first quarter, our average daily oil
production increased more than 6% sequentially and 56% year over year,
and our average daily NGL production increased 8% sequentially and 14%
year over year. These increases were driven primarily by strong
contributions from the Eagle Ford Shale and Greater Anadarko Basin
plays. Our average daily natural gas production during the quarter was
flat sequentially and up 2% year over year as a result of strong growth
in the northern Marcellus Shale play offset by expected declines in the
Haynesville Shale play. Our liquids mix as a percentage of total
production was 24% during the 2013 first quarter, up from 19% in the
2012 first quarter.

'We are pleased to raise our 2013 oil production guidance by 1 million
barrels (mmbbls), largely as a result of improving performance in the
Eagle Ford Shale, where we are drilling longer laterals, achieving
better-than-expected well performance and encountering improved
gathering system pressures along with fewer gas processing constraints.
We are also increasing the mid-point of our 2013 natural gas production
guidance by 25 bcf, due primarily to strong well results in the
Marcellus Shale play. However, we are reducing our 2013 NGL production
guidance by 1 mmbbls, primarily due to infrastructure delays and a shift
in our drilling activity toward more oily plays.?

Capital Spending Review and Outlook

Chesapeake operated an average of 83 rigs in the 2013 first quarter and
invested approximately $1.5 billion in drilling and completion costs, a
run rate consistent with the $6 billion midpoint of the company′s full
year 2013 guidance. Net expenditures for the acquisition of unproved
properties were $45 million during the first quarter, putting the
company on track to be in line with or below its $400 million budget for
2013. Other capital expenditures totaled approximately $345 million,
including $62 million related to two midstream systems that the company
expects to recover as the assets are sold.

Domenic J. Dell′Osso, Jr., Chesapeake′s Chief Financial Officer,
commented, 'We plan to devote more than 80% of our total capital
expenditures to drilling and completion activities in 2013 as compared
to an average of approximately 50% over the last three years. Going
forward, we expect this capex trend to continue to improve as we
capitalize on our past investments in leasehold, oilfield services and
other assets to deliver meaningful improvements in returns on capital.?

The company reported that production expenses during the quarter
averaged $0.86 per thousand cubic feet of natural gas equivalent (mcfe),
a decrease of 18% year over year. General and administrative (G&A)
expenses (excluding stock-based compensation) were $0.25 per mcfe, a
decrease of 29% year over year.

Dell′Osso added, 'We have achieved good progress in controlling costs
and generating efficiency gains. As a result, we are reducing our 2013
guidance ranges for per unit production and G&A expenses for the second
consecutive quarter. We now project that production expenses will range
from $0.85 to $0.90 per mcfe for the year, down $0.05 per mcfe versus
prior guidance. We project that 2013 G&A expenses (excluding stock-based
compensation) will range from $0.30 to $0.35 per mcfe, down $0.04 per
mcfe versus prior guidance. These decreases in expense guidance amount
to an approximate $100 million improvement to our projected 2013
operating cash flow.?

Asset Sales Update

The company continues to make progress toward its goal of completing
$4.0?7.0 billion of asset sales in 2013, having closed or signed
approximately $2.0 billion of asset sales year to date. These consist of
$366 million of asset sale cash proceeds received during the first
quarter, $262 million of asset sales cash proceeds received thus far
during the second quarter and approximately $1.4 billion of cash
proceeds to be received from planned asset sales under contract, but not
yet closed. Chesapeake also has multiple other transactions in advanced
stages of negotiation.

Dixon remarked, 'We anticipate closing our previously announced
Mississippi Lime joint venture transaction with Sinopec before the end
of the second quarter and expect to sign agreements to sell our northern
Eagle Ford Shale assets, the majority of our remaining midstream assets
and other noncore properties during the second quarter. These
transactions will allow us to fund current capital expenditures and
reduce debt.?

Operational Update

Since 2000, Chesapeake has built a leading position in 10 of what it
believes are the top 15 unconventional plays in the U.S.: the Eagle Ford
Shale in South Texas; the Marcellus Shale in Pennsylvania and West
Virginia; the Utica Shale in Ohio, West Virginia and Pennsylvania; the
Granite Wash/Hogshooter, Cleveland, Tonkawa and Mississippi Lime plays
in the Greater Anadarko Basin in Oklahoma and the Texas Panhandle; the
Haynesville/Bossier shales in western Louisiana and East Texas; the
Barnett Shale in North Texas; and the Niobrara Shale in the Powder River
Basin in Wyoming. The company′s investments in these 10 plays represent
Chesapeake′s core assets, which are the nearly exclusive focus of its
planned future drilling activity. The company continues to achieve
strong operational results in its most active plays, as highlighted
below.

Eagle Ford Shale (South Texas): Chesapeake
continues to generate strong liquids production growth rates from its
Eagle Ford Shale play in South Texas. Net production during the 2013
first quarter averaged 75,000 barrels of oil equivalent (boe) per day
(166,000 gross operated boe per day). This represents an increase of
225% year over year and 20% sequentially. Approximately 65% of the
company′s Eagle Ford production during the 2013 first quarter was oil,
18% was NGL and 17% was natural gas.

As of March 31, 2013, Chesapeake had drilled a total of 887 wells in the
Eagle Ford, which included 650 producing wells, 34 additional wells
waiting on pipeline connection and 203 wells in various stages of
completion. The company is currently operating 15 rigs in the play and
plans to reduce its operated rig count to 13 rigs in the second half of
2013. Spud-to-spud cycle times during the quarter were 18 days, down
from 25 days year over year. Chesapeake plans to have substantially all
of its core Eagle Ford acreage held by production by the end of 2013.
The average peak daily production rate of the 111 wells that commenced
first production during the 2013 first quarter was approximately 950 boe
per day.

Three notable wells completed by Chesapeake in the Eagle Ford during the
2013 first quarter are as follows:

• 
  TheGates010-CHK-A TR3-J2Hin Webb County, TX
  achieved a peak rate of approximately 3,110 boe per day, which
  included 930 bbls of oil, 1,160 bbls of NGL and 6.1 million cubic feet
  (mmcf) of natural gas per day;
  
• 
  The PGE Browne G 4H in Webb County, TX achieved a peak rate of
  approximately 1,840 boe per day, which included 770 bbls of oil, 570
  bbls of NGL and 3.0 mmcf of natural gas per day; and
  
• 
  The Sultenfuss Unit 6Hin Dimmit County, TX achieved a peak
  rate of approximately 1,360 boe per day, which included 1,260 bbls of
  oil, 60 bbls of NGL and 0.2 mmcf of natural gas per day.
  

Chesapeake is in the process of selling a portion of its northern Eagle
Ford Shale leasehold and producing assets which are outside of its core
development area.

Utica Shale (eastern Ohio, Pennsylvania, West
Virginia): Chesapeake is currently operating 14 rigs
in the Utica Shale play. As of March 31, 2013, Chesapeake had drilled a
total of 249 wells in the Utica, which included 66 producing wells, 86
additional wells waiting on pipeline connection and 97 wells in various
stages of completion. Net production averaged approximately 60 million
cubic feet of natural gas equivalent (mmcfe) per day during the 2013
first quarter and the company continues to target a year-end 2013 net
production exit rate of 330 mmcfe per day. The average peak daily
production rate of the 13 wells that commenced first production during
the 2013 first quarter was approximately 1,200 boe per day.

Three notable wells completed by Chesapeake in the Utica during the 2013
first quarter are as follows:

• 
  The Coe 34-12-4 1H in Carroll County, OH achieved a peak rate of
  approximately 1,980 boe per day, which included 235 bbls of oil, 470
  bbls of NGL and 7.6 mmcf of natural gas per day;
  
• 
  The Henderson South 10-12-6 5H in Harrison County, OH achieved a peak
  rate of approximately 1,625 boe per day, which included 755 bbls of
  oil, 240 bbls of NGL and 3.8 mmcf of natural gas per day; and
  
• 
  The Scott 24-12-5 6H in Carroll County, OH achieved a peak rate of
  approximately 1,530 boe per day, which included 285 bbls of oil, 350
  bbls of NGL and 5.4 mmcf of natural gas per day.
  

Chesapeake is in the process of selling certain noncore Utica Shale
leasehold.

Greater Anadarko Basin (Oklahoma, Texas
Panhandle, southern Kansas): Chesapeake continues to
generate steady liquids production growth in the Greater Anadarko Basin
primarily from five plays: the Mississippi Lime, Granite Wash,
Cleveland, Tonkawa and Hogshooter. Aggregate net production from these
plays during the 2013 first quarter averaged 114,000 boe per day
(168,000 gross operated boe per day). This represents an increase of 30%
year over year and 9% sequentially. Approximately 38% of the company′s
Greater Anadarko Basin production during the 2013 first quarter was oil,
20% was NGL and 42% was natural gas. Chesapeake is currently operating
28 rigs across these plays and plans to maintain this level for the
remainder of the year. The average peak daily production rate of the 90
wells that commenced first production during the 2013 first quarter was
approximately 900 boe per day.

Five notable wells completed by Chesapeake in the Greater Anadarko Basin
during the 2013 first quarter are as follows:

• 
  In the Mississippi Lime, the TDR 12-25-12 1Hin Alfalfa County,
  OK achieved a peak rate of approximately 1,485 boe per day, which
  included 490 bbls of oil, 305 bbls of NGL and 4.1 mmcf of natural gas
  per day;
  
• 
  In the Colony Granite Wash, the Kenton 23-11-18 1Hin Washita
  County, OK achieved a peak rate of approximately 3,665 boe per day,
  which included 870 bbls of oil, 1,215 bbls of NGL and 9.5 mmcf of
  natural gas per day;
  
• 
  In the Cleveland, the Edward Mary23-16-20 1Hin Dewey
  County, OK achieved a peak rate of approximately 1,275 boe per day,
  which included 555 bbls of oil, 290 bbls of NGL and 2.6 mmcf of
  natural gas per day;
  
• 
  In the Tonkawa, the Beaudette 11-16-20 1H in Dewey County, OK achieved
  a peak rate of approximately 930 boe per day, which included 810 bbls
  of oil, 35 bbls of NGL and 0.5 mmcf of natural gas per day; and
  
• 
  In the Hogshooter, the Roark Trust 14-14-24 1Hin Roger Mills,
  OK achieved a peak rate of approximately 4,570 boe per day, which
  included 2,205 bbls of oil, 905 bbls of NGL and 8.8 mmcf of natural
  gas per day.
  

Marcellus Shale (Pennsylvania, West Virginia):
Chesapeake is the largest leasehold owner in the Marcellus Shale,
which spans from northern West Virginia across much of Pennsylvania into
southern New York. The company recently achieved a gross operated
natural gas production milestone of more than 2.0 bcf per day. As
natural gas prices have recovered from last year′s historically low
levels, the company has benefited from the strong growth and returns in
both the northern dry gas and the southern wet gas portions of the play.

During the 2013 first quarter, Chesapeake′s average daily net production
in the northern dry gas portion of the Marcellus was 710 mmcfe per day
(1,540 gross operated mmcfe per day), an increase of 70% year over year
and 10% sequentially. Chesapeake has reduced its operated rig count to
five rigs in the northern dry gas portion of the Marcellus and
anticipates maintaining that level of activity for the remainder of
2013. The average peak daily production rate of the 39 wells that
commenced first production during the 2013 first quarter in the northern
Marcellus was approximately 8.0 mmcfe per day.

Three notable wells completed by Chesapeake in the northern dry gas
portion of the Marcellus during the 2013 first quarter are as follows:

• 
  The Floydie NW 4H in Bradford County, PA achieved a peak rate of 12.7
  mmcf of natural gas per day;
  
• 
  The Matt 2H in Sullivan County, PA achieved a peak rate of 12.4 mmcf
  of natural gas per day; and
  
• 
  The Phillips 5H in Sullivan County, PA achieved a peak rate of 12.3
  mmcf of natural gas per day.
  

During the 2013 first quarter, Chesapeake′s average daily net production
in the southern wet gas portion of the play was approximately 170 mmcfe
per day (280 gross operated mmcfe per day), an increase of 21% year over
year and 9% sequentially. Chesapeake is currently operating three rigs
in the southern wet gas portion of the Marcellus and anticipates
maintaining that level of activity for the remainder of 2013. The
average peak daily production rate of the 13 wells that commenced first
production during the 2013 first quarter in the southern Marcellus was
approximately 6.0 mmcfe per day.

Three notable wells completed by Chesapeake in the southern wet gas
portion of the Marcellus during the 2013 first quarter are as follows:

• 
  The Shawn Couch 8Hin Ohio County, WV achieved a peak rate of
  approximately 1,360 boe per day, which included 505 bbls of oil, 290
  bbls of NGL and 3.4 mmcf of natural gas per day;
  
• 
  The Glenn Didriksen 1H in Ohio County, WV achieved a peak rate of
  approximately 1,355 boe per day, which included 395 bbls of oil, 195
  bbls of NGL and 4.6 mmcf of natural gas per day; and
  
• 
  The John Briggs 5H in Greene County, PA achieved a peak rate of
  approximately 1,340 boe per day, which included 270 bbls of NGL and
  6.4 mmcf of natural gas per day.
  

The company is in the process of selling certain noncore Marcellus Shale
leasehold.

2013 First Quarter Financial and Operational Results Conference Call
Information

A conference call to discuss this release has been scheduled for
Wednesday, May 1, 2013 at 9:00 am EDT. The telephone number to access
the conference call is 913-312-0844 or toll-free 888-811-5445.
The passcode for the call is 8842603. We encourage those who
would like to participate in the call to place calls between 8:50 and
9:00 am EDT. For those unable to participate in the conference call, a
replay will be available for audio playback at 2:00 pm EDT on Wednesday,
May 1, 2013 and will run through 2:00 pm EDT on Wednesday, May 15, 2013.
The number to access the conference call replay is 719-457-0820
or toll-free 888-203-1112. The passcode for the replay is 8842603.
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. The webcast of the conference will be available on the
company′s website for one year.

Chesapeake Energy Corporation (NYSE:CHK) is the second-largest
producer of natural gas, a Top 11 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 Eagle Ford,
Utica, Granite Wash, Cleveland, Tonkawa, Mississippi Lime and Niobrara
unconventional liquids plays and in the Marcellus, Haynesville/Bossier
and Barnett unconventional natural gas shale plays. The company has also
vertically integrated its operations and owns substantial marketing,
compression and oilfield services businesses through its subsidiaries
Chesapeake Energy Marketing, Inc., MidCon Compression, L.L.C. and
Chesapeake Oilfield Operating, L.L.C.Further information
is available at www.chk.com
where Chesapeake routinely posts announcements, updates, events,
investor information, presentations and news releases.

This news 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 are statements other than
statements of historical fact that give our current expectations or
forecasts of future events.They include production forecasts,
estimates of operating costs, planned development drilling and expected
capital expenditures, anticipated asset sales, projected cash flow and
liquidity, business strategy and other plans and objectives for future
operations. Although we believe the expectations and forecasts reflected
in the 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 1A of our
2012 annual report on Form 10-K filed with the U.S. Securities and
Exchange Commission on March 1, 2013.These risk factors include
the volatility of natural gas, oil and NGL prices; the limitations our
level of indebtedness may have on our financial flexibility; declines in
the prices of natural gas and oil potentially resulting in a write-down
of our asset carrying values; the availability of capital on an economic
basis, including through planned asset sales, to fund reserve
replacement costs; our ability to replace reserves and sustain
production; uncertainties inherent in estimating quantities of natural
gas, oil and NGL reserves and projecting future rates of production and
the amount and timing of development expenditures; our ability to
generate profits or achieve targeted results in drilling and well
operations; leasehold terms expiring before production can be
established; hedging activities resulting in lower prices realized on
natural gas, oil and NGL sales; the need to secure hedging liabilities
and the inability of hedging counterparties to satisfy their
obligations; drilling and operating risks, including potential
environmental liabilities; legislative and regulatory changes adversely
affecting our industry and our business, including initiatives related
to hydraulic fracturing, air emissions and endangered species; current
worldwide economic uncertainty which may have a material adverse effect
on our results of operations, liquidity and financial condition;
oilfield services shortages, gathering system and transportation
capacity constraints and various transportation interruptions that could
adversely affect our revenues and cash flow; losses possible from
pending or future litigation and regulatory investigations; cyber
attacks adversely impacting our operations; and a delay in naming a new
CEO, the loss of key operational personnel or inability to maintain our
corporate culture.In addition, disclosures concerning the
estimated contribution of derivative contracts to our future results of
operations are based upon market information as of a specific date.These
market prices are subject to significant volatility.Our
production forecasts are also dependent upon many assumptions, including
estimates of production decline rates from existing wells and the
outcome of future drilling activity.We do not have binding
agreements for all of our planned 2013 asset sales. Our ability to
consummate each of these transactions is subject to changes in market
conditions and other factors. If one or more of the transactions is not
completed in the anticipated time frame or at all or for less proceeds
than anticipated, our ability to fund budgeted capital expenditures and
reduce our indebtedness as planned could be adversely affected.We
caution you not to place undue reliance on our forward-looking
statements, which speak only as of the date of this news release, and we
undertake no obligation to update this information.

Key Financial and Operational Results

The table below summarizes Chesapeake′s key financial and operational
results during the 2013 first quarter and compares them to results
during the 2012 fourth quarter and the 2012 first quarter.

SCHEDULE 'A?

MANAGEMENT′S OUTLOOK AS OF MAY 1, 2013

Chesapeake periodically provides management guidance on certain factors
that affect its future financial performance. The primary changes from
the company′s February 21, 2013 Outlook are in italicized bold below.
The production guidance provided assumes Chesapeake closes asset sales
for proceeds of approximately $4 billion during 2013. Estimated
production decreases of approximately 42 bcfe in 2013 are associated
with these sales and are reflected in the production guidance set forth
below. To the extent the company completes asset sales in excess of $4
billion during 2013, production guidance may need to be reduced to
reflect such incremental sales.

Chesapeake Energy Corporation Consolidated Projections

Natural Gas, Oil and NGL Hedging Activities

Chesapeake enters into natural gas, oil and NGL derivative transactions
in order to mitigate a portion of its exposure to adverse changes in
market prices. Please see the quarterly reports on Form 10-Q and annual
reports on Form 10-K filed by Chesapeake with the SEC for detailed
information about derivative instruments the company uses, its
quarter-end derivative positions and the accounting for natural gas, oil
and NGL derivatives.

As of April 30, 2013, the company had the following open natural gas
swaps in place and gains (losses) related to closed natural gas trades
and premiums for call options for future production periods.