Chesapeake Energy Corporation Reports Record Results for the First Quarter Of 2001

Company Posts First Quarter 2001 Net Income of $70 Million, Cash Flow Of

$162 Million and Ebitda of $187 Million on Revenue of $277 Million And

Production of 40 Bcfe



Apr 26, 2001, 01:00 ET from Chesapeake Energy Corporation

    OKLAHOMA CITY, April 26 /PRNewswire/ -- Chesapeake Energy Corporation
 (NYSE:   CHK) today reported its financial and operating results for the first
 quarter of 2001.  For the quarter, Chesapeake generated net income of
 $70.3 million ($0.44 per basic common share), operating cash flow of
 $161.5 million ($1.02 per basic common share), and ebitda (operating cash flow
 plus interest expense) of $187.4 million on revenue of $277.4 million.  These
 results reflect increases over the same period in 2000 of 232% in net income,
 239% in operating cash flow, 173% in ebitda and 142% in revenue.
     Excluding the $3.4 million non-recurring charge related to the Gothic
 Energy acquisition standby credit facility, Chesapeake's net income would have
 been $72.3 million, or $0.46 per basic common share and $0.42 per common share
 assuming dilution.
     Production for the first quarter of 2001 was 40.2 billion cubic feet of
 natural gas equivalent (bcfe), comprised of 36.0 billion cubic feet of natural
 gas (bcf) and 686 thousand barrels of oil (mbo).  This is an increase of 18%
 over production in the first quarter of 2000.  Average prices realized during
 the first quarter of 2001 were $29.01 per barrel of oil and $5.59 per thousand
 cubic feet (mcf) of natural gas, for a gas equivalent price of $5.51 per mcfe.
 Hedging activities during the first quarter increased oil revenue by $0.85 per
 barrel and reduced gas revenue by $0.86 per mcf, for a total revenue reduction
 of $30.5 million ($0.76 per mcfe).
     The table below summarizes Chesapeake's key statistics during the quarter
 and compares them to the first and fourth quarters of 2000:
 
                                                    Three Months Ended
                                             3/31/01     12/31/00      3/31/00
     Average daily production (in mmcfe)        446          353         373
     Gas as a % of total production              90           88          85
     Natural gas production (in bcf)           36.0         28.5        28.7
     Average gas sales price ($/mcf)           5.59         4.90        2.30
     Oil production (in mbbls)                  686          652         864
     Average oil sales price ($/bbl)          29.01        28.93       24.58
     Natural gas equivalent production
      (in bcfe)                                40.2         32.5        33.9
     Gas equivalent sales price ($/mcfe)       5.51         4.89        2.57
     General and administrative costs
      ($/mcfe)                                  .10          .11         .09
     Production taxes ($/mcfe)                  .36          .24         .15
     Lease operating expenses ($/mcfe)          .44          .41         .37
     Interest expense ($/mcfe)                  .64          .67         .61
     DD&A of oil and gas properties ($/mcfe)    .95          .82         .72
     Operating cash flow ($ in millions)      161.5        114.4        47.7
     Operating cash flow ($/mcfe)              4.02         3.52        1.40
     Ebitda ($ in millions)                   187.4        136.3        68.5
     Ebitda ($/mcfe)                           4.67         4.20        2.02
     Net income ($ in millions)                70.3        348.0        21.2
 
 
                  2001 Forecast and Forward-Looking Statements
 
     The following forecasts and estimates are based on projections previously
 made available to the public on April 16, 2001, revised only to include
 additional oil and natural gas hedging activities.  These forecasts and
 estimates are forward-looking statements within the meaning of the Private
 Securities Litigation Reform Act of 1995.  Actual results may differ
 materially due to the risks and uncertainties identified at the end of this
 release.  Furthermore, these projections do not reflect the potential impact
 of unforeseen events that may occur subsequent to the issuance of this
 release.
     Chesapeake's 2001 guidance is based on projected production of
 170-180 bcfe (90% gas) and projected per mcfe lease operating expenses of
 $0.45-$0.50, production taxes of $0.32-$0.35, interest expense of $0.58-$0.62,
 general and administrative costs of $0.10-$0.11 and DD&A of oil and gas
 properties of $1.00-$1.06.  In addition, Chesapeake expects its tax rate to
 average 40%, of which 95% should be deferred.
     If the mid-points of the forecasted ranges described above are achieved
 and if NYMEX oil and gas prices average $25.43 per bo and $5.61 per mcf in
 2001, Chesapeake expects to realize $4.92 per mcfe and generate ebitda of
 $700-725 million, operating cash flow of $600-625 million and net income of
 $250-275 million (before extraordinary charges related to early debt
 extinguishment to be recognized in the second quarter).
     The company's 2001 average NYMEX gas price projection of $5.61 per mcf is
 based on actual NYMEX index prices of $9.91 for January, $6.22 for February,
 $5.03 for March and $5.35 for April, and an average of $5.09 for the remaining
 eight months of 2001.  For the next eight months, Chesapeake has hedged 69% of
 its projected gas production via swaps at an average price of $5.31 per mcf
 and collars at prices ranging from $4.13 to $6.17 per mcf.  In addition,
 Chesapeake has hedged 63% of its expected oil production for the next eight
 months at an average NYMEX price of $29.64 per barrel.
     For 2002, Chesapeake has hedged 43% of its projected 165 bcf of gas
 production through swaps at an average price of $5.08 per mcf and collars at
 prices ranging from $4.00 to $5.53 per mcf.  In addition, the company has
 hedged 23% of its projected 3,250 mbo of oil production at an average price of
 $25.15 per barrel.
 
                               Operational Update
 
     Chesapeake's principal operating area is the Mid-Continent region, which
 accounts for 74% of the company's total proved reserves and where the company
 continues to be the third largest producer of natural gas, trailing only
 BPAmoco and Apache.  With over 1,000 identified drillsites remaining in its
 extensive Mid-Continent leasehold inventory, this area will remain the primary
 focus of Chesapeake's ongoing drilling and acquisition activities.
     Three areas in the Mid-Continent area deserve special mention.  First, on
 the exploration front, Chesapeake's 200 square miles of 3-D seismic covering
 the giant southern Oklahoma gas fields of Knox/Chitwood and Cement should
 continue to generate some of the highest potential reserve additions in the
 company's portfolio.  Chesapeake has recently drilled two deep exploratory
 wells in these areas that should develop over 25 bcfe of proved reserves.  Up
 to eight additional wells are projected to be drilled offsetting these new
 discoveries.
     In the company's rapidly growing southeast Oklahoma Arkoma Basin project,
 three successful Spiro formation wells were drilled during the first quarter.
 These wells, the Blue Mountain 1-30, Wheeler 2-25, and Golden 3-10 are
 producing at a combined daily rate of 7,000 mcfe.  The company plans to drill
 an additional 10 Arkoma wells during the balance of 2001.
     In Chesapeake's one million acre Sahara area of the Anadarko Basin Shelf
 region in northwest Oklahoma, Chesapeake continues to drill excellent low-cost
 developmental gas wells.  Most recent among these are the Dusty 1-19, Ela 1-8,
 Okie 1-11, Whitaker 3-36, and Whitlaw 1-12.  These wells are producing at a
 combined daily rate of 6,900 mcfe.  Estimated average reserves for these wells
 are 1.2 bcfe per well with finding costs of $0.50 per mcfe.  Since initiating
 the Sahara project in 1998, Chesapeake has drilled 213 wells, completing 95%
 of them as producers.  Chesapeake's plans for 2001 include the drilling of 70
 additional wells out of its current inventory of 500 undrilled locations in
 Sahara.
     After a promising start in the past five months, Chesapeake continues to
 ramp up its activity in the Georgetown project in the Deep Giddings Field of
 central Texas.  In this area, Chesapeake has drilled two highly productive
 natural gas wells, the Ricks 1-H and the Carl 1-H, and one marginal well, the
 Schulte 1-H.  At a total cost of $7 million, the Ricks and Carl have already
 produced 5.3 bcf of gas and generated total revenues of over $30 million.  The
 company has increased its Georgetown activity to three rigs drilling new wells
 and plans to add a fourth rig by mid-May.  The company's current drilling
 schedule projects a total of 15 Georgetown wells to be drilled during the next
 20 months.  With a production profile that generally produces over 50% of
 estimated reserves within the first year, Georgetown wells are ideal
 investments in today's higher priced natural gas market.
     Chesapeake's 2000-2001 winter drilling program on its 750,000 gross
 undeveloped acres in the Helmet area of northeastern British Columbia was
 recently completed with strong results from eight new net producers.  These
 new completions added net production of 15,000 mcfe per day, bringing
 Chesapeake's current Canadian production to 42,000 mcfe per day.  At the end
 of the first quarter, the company's total proved Canadian reserves had
 increased to 180 bcfe out of a total of over 1,700 bcfe of total proved
 reserves.
 
                               Management Summary
 
     Aubrey K. McClendon, Chesapeake's Chairman and Chief Executive Officer,
 commented, "We are very pleased with our strong performance during the first
 quarter of 2001.  During the quarter, we established new operating and
 financial records, closed the $350 million Gothic acquisition, strengthened
 our balance sheet by refinancing $800 million of long-term debt at a
 significantly reduced interest rate, and executed a well-timed hedging program
 that virtually ensures our company will generate more than $1.1 billion in
 cash flow during 2001 and 2002.  With this enormous level of cash flow,
 Chesapeake will continue to grow assets, reduce debt and generate significant
 increases in shareholder value."
 
                          Conference Call Information
 
     Chesapeake's management invites your participation in a conference call
 tomorrow morning, Friday, April 27 at 9:00 a.m. EDT to discuss the contents of
 this release and respond to questions.  Please call 913-981-4911 between 8:50
 and 9:00 am EDT tomorrow if you would like to participate in the call.  For
 those unable to participate, the call will also be available over the Internet
 by visiting our home page at chkenergy.com and clicking on the link under
 Shareholder Information or by going directly to Vcall.com.  A replay of the
 call will also be available by calling 719-457-0820 between 12:00 p.m. EDT
 Friday, April 27 through midnight Thursday, May 10, 2001.  The passcode for
 this call is 709290.
 
     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.
     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 www.chkenergy.com.
 
 
                 CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       ($ in 000s, except per share data)
                                  (unaudited)
 
      THREE MONTHS ENDED:                March 31, 2001        March 31, 2000
                                          $      $/mcfe        $       $/mcfe
     REVENUES:
       Oil and gas sales               221,219     5.51      87,293     2.57
       Oil and gas marketing sales      56,165     1.40      27,368     0.81
         Total revenues                277,384     6.91     114,661     3.38
     OPERATING COSTS:
       Production expenses              17,788     0.44      12,545     0.37
       Production taxes                 14,295     0.36       5,216     0.15
       General and administrative        4,001     0.10       3,032     0.09
       Oil and gas marketing expenses   54,478     1.36      26,544     0.78
       Depreciation, depletion, and
        amortization of oil and gas
        properties                      38,173     0.95      24,483     0.72
       Depreciation and amortization
        of other assets                  1,953     0.05       1,866     0.06
         Total operating costs         130,688     3.26      73,686     2.17
 
     INCOME FROM OPERATIONS            146,696     3.65      40,975     1.21
 
     OTHER INCOME (EXPENSE):
       Interest and other income           569     0.01       1,192     0.03
       Interest expense                (25,889)   (0.64)    (20,864)   (0.61)
       Gothic standby credit facility
        costs                           (3,392)   (0.08)        ---      ---
                                       (28,712)   (0.71)    (19,672)   (0.58)
 
     Income Before Income Taxes        117,984     2.94      21,303     0.63
     Income Tax Expense                 47,696     1.19         101     0.00
     NET INCOME                         70,288     1.75      21,202     0.63
 
     Preferred Stock Dividends           (546)      ---     (4,042)      ---
     Gain on Redemption of Preferred
      Stock                                ---      ---      10,414      ---
     Net Income Available to Common
      Shareholders                      69,742      ---      27,574      ---
 
     Earnings Per Common Share -
      Basic                               0.44      ---        0.27      ---
 
     Earnings Per Common Share -
      Assuming Dilution                   0.41      ---        0.15      ---
 
     Average Common Shares and Common
      Equivalent Shares Outstanding
       Basic                           157,707      ---     101,681      ---
       Assuming Dilution (A)           170,326      ---     140,130      ---
 
     Operating Cash Flow (B)           161,502     4.02      47,652     1.40
 
     EBITDA (C)                        187,391     4.67      68,516     2.02
 
     Thousands of barrels of oil
      (mbbl)                               686      -21%        864
     Millions of cubic feet of gas
      (mmcf)                            36,040       25%     28,747
     Millions of cubic feet of gas
      equivalents (mmcfe)               40,156       18%     33,931
     Mmcfe per day                         446       20%        373
 
     Average price/barrel               $29.01       18%     $24.58
     Average price/mcf                   $5.59      143%      $2.30
     Average gas equivalent price/mcfe   $5.51      114%      $2.57
 
     (A)  Earnings per share assuming dilution for the three months ended
          March 31, 2001 and 2000, includes the effect of dilutive stock
          options, and includes the effect of the assumed conversion of all
          preferred stock as of the beginning of the period.
     (B)  Income before income tax, Gothic standby credit facility costs, and
          depreciation, depletion and amortization.
     (C)  Income before income tax, Gothic standby credit facility costs,
          interest expense, and depreciation, depletion and amortization.
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Chesapeake Energy Corporation
    OKLAHOMA CITY, April 26 /PRNewswire/ -- Chesapeake Energy Corporation
 (NYSE:   CHK) today reported its financial and operating results for the first
 quarter of 2001.  For the quarter, Chesapeake generated net income of
 $70.3 million ($0.44 per basic common share), operating cash flow of
 $161.5 million ($1.02 per basic common share), and ebitda (operating cash flow
 plus interest expense) of $187.4 million on revenue of $277.4 million.  These
 results reflect increases over the same period in 2000 of 232% in net income,
 239% in operating cash flow, 173% in ebitda and 142% in revenue.
     Excluding the $3.4 million non-recurring charge related to the Gothic
 Energy acquisition standby credit facility, Chesapeake's net income would have
 been $72.3 million, or $0.46 per basic common share and $0.42 per common share
 assuming dilution.
     Production for the first quarter of 2001 was 40.2 billion cubic feet of
 natural gas equivalent (bcfe), comprised of 36.0 billion cubic feet of natural
 gas (bcf) and 686 thousand barrels of oil (mbo).  This is an increase of 18%
 over production in the first quarter of 2000.  Average prices realized during
 the first quarter of 2001 were $29.01 per barrel of oil and $5.59 per thousand
 cubic feet (mcf) of natural gas, for a gas equivalent price of $5.51 per mcfe.
 Hedging activities during the first quarter increased oil revenue by $0.85 per
 barrel and reduced gas revenue by $0.86 per mcf, for a total revenue reduction
 of $30.5 million ($0.76 per mcfe).
     The table below summarizes Chesapeake's key statistics during the quarter
 and compares them to the first and fourth quarters of 2000:
 
                                                    Three Months Ended
                                             3/31/01     12/31/00      3/31/00
     Average daily production (in mmcfe)        446          353         373
     Gas as a % of total production              90           88          85
     Natural gas production (in bcf)           36.0         28.5        28.7
     Average gas sales price ($/mcf)           5.59         4.90        2.30
     Oil production (in mbbls)                  686          652         864
     Average oil sales price ($/bbl)          29.01        28.93       24.58
     Natural gas equivalent production
      (in bcfe)                                40.2         32.5        33.9
     Gas equivalent sales price ($/mcfe)       5.51         4.89        2.57
     General and administrative costs
      ($/mcfe)                                  .10          .11         .09
     Production taxes ($/mcfe)                  .36          .24         .15
     Lease operating expenses ($/mcfe)          .44          .41         .37
     Interest expense ($/mcfe)                  .64          .67         .61
     DD&A of oil and gas properties ($/mcfe)    .95          .82         .72
     Operating cash flow ($ in millions)      161.5        114.4        47.7
     Operating cash flow ($/mcfe)              4.02         3.52        1.40
     Ebitda ($ in millions)                   187.4        136.3        68.5
     Ebitda ($/mcfe)                           4.67         4.20        2.02
     Net income ($ in millions)                70.3        348.0        21.2
 
 
                  2001 Forecast and Forward-Looking Statements
 
     The following forecasts and estimates are based on projections previously
 made available to the public on April 16, 2001, revised only to include
 additional oil and natural gas hedging activities.  These forecasts and
 estimates are forward-looking statements within the meaning of the Private
 Securities Litigation Reform Act of 1995.  Actual results may differ
 materially due to the risks and uncertainties identified at the end of this
 release.  Furthermore, these projections do not reflect the potential impact
 of unforeseen events that may occur subsequent to the issuance of this
 release.
     Chesapeake's 2001 guidance is based on projected production of
 170-180 bcfe (90% gas) and projected per mcfe lease operating expenses of
 $0.45-$0.50, production taxes of $0.32-$0.35, interest expense of $0.58-$0.62,
 general and administrative costs of $0.10-$0.11 and DD&A of oil and gas
 properties of $1.00-$1.06.  In addition, Chesapeake expects its tax rate to
 average 40%, of which 95% should be deferred.
     If the mid-points of the forecasted ranges described above are achieved
 and if NYMEX oil and gas prices average $25.43 per bo and $5.61 per mcf in
 2001, Chesapeake expects to realize $4.92 per mcfe and generate ebitda of
 $700-725 million, operating cash flow of $600-625 million and net income of
 $250-275 million (before extraordinary charges related to early debt
 extinguishment to be recognized in the second quarter).
     The company's 2001 average NYMEX gas price projection of $5.61 per mcf is
 based on actual NYMEX index prices of $9.91 for January, $6.22 for February,
 $5.03 for March and $5.35 for April, and an average of $5.09 for the remaining
 eight months of 2001.  For the next eight months, Chesapeake has hedged 69% of
 its projected gas production via swaps at an average price of $5.31 per mcf
 and collars at prices ranging from $4.13 to $6.17 per mcf.  In addition,
 Chesapeake has hedged 63% of its expected oil production for the next eight
 months at an average NYMEX price of $29.64 per barrel.
     For 2002, Chesapeake has hedged 43% of its projected 165 bcf of gas
 production through swaps at an average price of $5.08 per mcf and collars at
 prices ranging from $4.00 to $5.53 per mcf.  In addition, the company has
 hedged 23% of its projected 3,250 mbo of oil production at an average price of
 $25.15 per barrel.
 
                               Operational Update
 
     Chesapeake's principal operating area is the Mid-Continent region, which
 accounts for 74% of the company's total proved reserves and where the company
 continues to be the third largest producer of natural gas, trailing only
 BPAmoco and Apache.  With over 1,000 identified drillsites remaining in its
 extensive Mid-Continent leasehold inventory, this area will remain the primary
 focus of Chesapeake's ongoing drilling and acquisition activities.
     Three areas in the Mid-Continent area deserve special mention.  First, on
 the exploration front, Chesapeake's 200 square miles of 3-D seismic covering
 the giant southern Oklahoma gas fields of Knox/Chitwood and Cement should
 continue to generate some of the highest potential reserve additions in the
 company's portfolio.  Chesapeake has recently drilled two deep exploratory
 wells in these areas that should develop over 25 bcfe of proved reserves.  Up
 to eight additional wells are projected to be drilled offsetting these new
 discoveries.
     In the company's rapidly growing southeast Oklahoma Arkoma Basin project,
 three successful Spiro formation wells were drilled during the first quarter.
 These wells, the Blue Mountain 1-30, Wheeler 2-25, and Golden 3-10 are
 producing at a combined daily rate of 7,000 mcfe.  The company plans to drill
 an additional 10 Arkoma wells during the balance of 2001.
     In Chesapeake's one million acre Sahara area of the Anadarko Basin Shelf
 region in northwest Oklahoma, Chesapeake continues to drill excellent low-cost
 developmental gas wells.  Most recent among these are the Dusty 1-19, Ela 1-8,
 Okie 1-11, Whitaker 3-36, and Whitlaw 1-12.  These wells are producing at a
 combined daily rate of 6,900 mcfe.  Estimated average reserves for these wells
 are 1.2 bcfe per well with finding costs of $0.50 per mcfe.  Since initiating
 the Sahara project in 1998, Chesapeake has drilled 213 wells, completing 95%
 of them as producers.  Chesapeake's plans for 2001 include the drilling of 70
 additional wells out of its current inventory of 500 undrilled locations in
 Sahara.
     After a promising start in the past five months, Chesapeake continues to
 ramp up its activity in the Georgetown project in the Deep Giddings Field of
 central Texas.  In this area, Chesapeake has drilled two highly productive
 natural gas wells, the Ricks 1-H and the Carl 1-H, and one marginal well, the
 Schulte 1-H.  At a total cost of $7 million, the Ricks and Carl have already
 produced 5.3 bcf of gas and generated total revenues of over $30 million.  The
 company has increased its Georgetown activity to three rigs drilling new wells
 and plans to add a fourth rig by mid-May.  The company's current drilling
 schedule projects a total of 15 Georgetown wells to be drilled during the next
 20 months.  With a production profile that generally produces over 50% of
 estimated reserves within the first year, Georgetown wells are ideal
 investments in today's higher priced natural gas market.
     Chesapeake's 2000-2001 winter drilling program on its 750,000 gross
 undeveloped acres in the Helmet area of northeastern British Columbia was
 recently completed with strong results from eight new net producers.  These
 new completions added net production of 15,000 mcfe per day, bringing
 Chesapeake's current Canadian production to 42,000 mcfe per day.  At the end
 of the first quarter, the company's total proved Canadian reserves had
 increased to 180 bcfe out of a total of over 1,700 bcfe of total proved
 reserves.
 
                               Management Summary
 
     Aubrey K. McClendon, Chesapeake's Chairman and Chief Executive Officer,
 commented, "We are very pleased with our strong performance during the first
 quarter of 2001.  During the quarter, we established new operating and
 financial records, closed the $350 million Gothic acquisition, strengthened
 our balance sheet by refinancing $800 million of long-term debt at a
 significantly reduced interest rate, and executed a well-timed hedging program
 that virtually ensures our company will generate more than $1.1 billion in
 cash flow during 2001 and 2002.  With this enormous level of cash flow,
 Chesapeake will continue to grow assets, reduce debt and generate significant
 increases in shareholder value."
 
                          Conference Call Information
 
     Chesapeake's management invites your participation in a conference call
 tomorrow morning, Friday, April 27 at 9:00 a.m. EDT to discuss the contents of
 this release and respond to questions.  Please call 913-981-4911 between 8:50
 and 9:00 am EDT tomorrow if you would like to participate in the call.  For
 those unable to participate, the call will also be available over the Internet
 by visiting our home page at chkenergy.com and clicking on the link under
 Shareholder Information or by going directly to Vcall.com.  A replay of the
 call will also be available by calling 719-457-0820 between 12:00 p.m. EDT
 Friday, April 27 through midnight Thursday, May 10, 2001.  The passcode for
 this call is 709290.
 
     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.
     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 www.chkenergy.com.
 
 
                 CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                       ($ in 000s, except per share data)
                                  (unaudited)
 
      THREE MONTHS ENDED:                March 31, 2001        March 31, 2000
                                          $      $/mcfe        $       $/mcfe
     REVENUES:
       Oil and gas sales               221,219     5.51      87,293     2.57
       Oil and gas marketing sales      56,165     1.40      27,368     0.81
         Total revenues                277,384     6.91     114,661     3.38
     OPERATING COSTS:
       Production expenses              17,788     0.44      12,545     0.37
       Production taxes                 14,295     0.36       5,216     0.15
       General and administrative        4,001     0.10       3,032     0.09
       Oil and gas marketing expenses   54,478     1.36      26,544     0.78
       Depreciation, depletion, and
        amortization of oil and gas
        properties                      38,173     0.95      24,483     0.72
       Depreciation and amortization
        of other assets                  1,953     0.05       1,866     0.06
         Total operating costs         130,688     3.26      73,686     2.17
 
     INCOME FROM OPERATIONS            146,696     3.65      40,975     1.21
 
     OTHER INCOME (EXPENSE):
       Interest and other income           569     0.01       1,192     0.03
       Interest expense                (25,889)   (0.64)    (20,864)   (0.61)
       Gothic standby credit facility
        costs                           (3,392)   (0.08)        ---      ---
                                       (28,712)   (0.71)    (19,672)   (0.58)
 
     Income Before Income Taxes        117,984     2.94      21,303     0.63
     Income Tax Expense                 47,696     1.19         101     0.00
     NET INCOME                         70,288     1.75      21,202     0.63
 
     Preferred Stock Dividends           (546)      ---     (4,042)      ---
     Gain on Redemption of Preferred
      Stock                                ---      ---      10,414      ---
     Net Income Available to Common
      Shareholders                      69,742      ---      27,574      ---
 
     Earnings Per Common Share -
      Basic                               0.44      ---        0.27      ---
 
     Earnings Per Common Share -
      Assuming Dilution                   0.41      ---        0.15      ---
 
     Average Common Shares and Common
      Equivalent Shares Outstanding
       Basic                           157,707      ---     101,681      ---
       Assuming Dilution (A)           170,326      ---     140,130      ---
 
     Operating Cash Flow (B)           161,502     4.02      47,652     1.40
 
     EBITDA (C)                        187,391     4.67      68,516     2.02
 
     Thousands of barrels of oil
      (mbbl)                               686      -21%        864
     Millions of cubic feet of gas
      (mmcf)                            36,040       25%     28,747
     Millions of cubic feet of gas
      equivalents (mmcfe)               40,156       18%     33,931
     Mmcfe per day                         446       20%        373
 
     Average price/barrel               $29.01       18%     $24.58
     Average price/mcf                   $5.59      143%      $2.30
     Average gas equivalent price/mcfe   $5.51      114%      $2.57
 
     (A)  Earnings per share assuming dilution for the three months ended
          March 31, 2001 and 2000, includes the effect of dilutive stock
          options, and includes the effect of the assumed conversion of all
          preferred stock as of the beginning of the period.
     (B)  Income before income tax, Gothic standby credit facility costs, and
          depreciation, depletion and amortization.
     (C)  Income before income tax, Gothic standby credit facility costs,
          interest expense, and depreciation, depletion and amortization.
 
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 SOURCE  Chesapeake Energy Corporation