Average prices realized were $7.41 per mcf of natural gas and $69.25 per bbl of oil, for a realized natural gas equivalent price of $7.76 per mcfe.

Realized gains from oil and natural gas hedging activities during the 2007 third quarter generated a $1.70 gain per mcf and a $1.51 loss per bbl for a 2007 third-quarter realized hedging gain of $286 million, or $1.53 per mcfe. Excluding hedging activity, Chesapeake’s average realized pricing differentials to NYMEX during the 2007 third quarter were a negative $0.45 per mcf and a negative $4.62 per bbl.

By comparison, average prices realized during the 2006 third quarter were $8.39 per mcf of natural gas and $60.62 per bbl of oil, for a realized natural gas equivalent price of $8.54 per mcfe. Realized gains from oil and natural gas hedging activities during the 2006 third quarter generated a $2.33 gain per mcf and a $4.43 loss per bbl for a 2006 third-quarter realized hedging gain of $301 million, or $2.05 per mcfe. Excluding hedging activity, Chesapeake’s average realized pricing differentials to NYMEX during the 2006 third quarter were a negative $0.52 per mcf and a negative $5.43 per bbl.

Chesapeake’s Leasehold and 3-D Seismic Inventories Increased to 12.5 Million Net Acres and 18.5 Million Acres.

Since 2000, Chesapeake has invested $8.8 billion in new leasehold and 3-D seismic acquisitions and now owns the largest combined inventories of onshore leasehold (12.5 million net acres) and 3-D seismic (18.5 million acres) in the U.S. On this leasehold, the company has approximately 28,000 net drilling locations, representing an approximate 10-year inventory of drilling projects, on which it believes it can develop an estimated 3.8 tcfe of proved undeveloped reserves and approximately 23 tcfe of risked unproved reserves (90 tcfe of unrisked unproved reserves). Chesapeake’s 10.6 tcfe of estimated proved reserves and its 23 tcfe of estimated risked unproved reserves total approximately 34 tcfe.

To aggressively develop these assets, Chesapeake has continued to significantly strengthen its technical capabilities by increasing its land, geoscience and engineering staff to more than 1,300 employees. Today, the company has approximately 6,000 employees, of whom approximately 60% work in the company’s E&P operations and approximately 40% work in the company’s oilfield service operations.

In its unconventional gas resource plays, the company is producing approximately 1 bcfe net per day.

Chesapeake owns 3.4 million net acres in unconventional gas resource plays on which it has an estimated 2.7 tcfe of proved developed reserves, 2.4 tcfe of proved undeveloped reserves and approximately 15.3 tcfe of estimated risked unproved reserves and is currently using 96 operated drilling rigs to further develop its inventory of approximately 15,300 net drillsites.

Fort Worth Barnett Shale (North Texas) is the largest and most prolific unconventional gas resource play in the U.S. In this play, Chesapeake is the third-largest producer of natural gas, the most active driller and the largest leasehold owner in the Core and Tier 1 sweet spot of Tarrant, Johnson and western Dallas counties. Chesapeake is producing approximately 330 mmcfe net per day from the Fort Worth Barnett Shale. Over the past three months, Chesapeake’s net production in the Fort Worth Barnett Shale play has increased by approximately 100 mmcfe per day, or 43%, as a result the company’s favorably positioned leasehold and its accelerated drilling program. Chesapeake is currently using 38 operated rigs to further develop its 235,000 net acres of leasehold, of which 200,000 net acres are located in the prime Core and Tier 1 areas. At its current pace of drilling, Chesapeake expects to be completing, on average, one new Barnett Shale well approximately every 15 hours through at least 2009. Chesapeake’s proved developed reserves in the Fort Worth Barnett Shale are an estimated 979 bcfe, its proved undeveloped reserves are an estimated 806 bcfe and its estimated risked unproved reserves are approximately 4.4 tcfe after applying a 15% risk factor in the Core and Tier 1 areas and a 30% risk factor in other areas and assuming an additional 2,700 net wells are drilled in the years ahead. The company has increased its targeted results for Core and Tier 1 horizontal Fort Worth Barnett Shale wells to 2.65 bcfe at a cost of $2.6 million on approximately 60-acre spacing utilizing wellbores that are generally 3,000’ in length and 500’ apart. Chesapeake’s targeted results for Tier 2 horizontal Fort Worth Barnett Shale wells are $2.25 million to develop 1.5 bcfe.

Fayetteville Shale (Arkansas): In this region of growing importance to Chesapeake, the company is the second-largest leasehold owner in the Core area of the play and is producing approximately 60 mmcfe net per day. Chesapeake’s net production levels have doubled over the past three months as a result of the company’s accelerated drilling program and better-than-expected well results. Chesapeake is currently using 11 operated rigs to further develop its 420,000 net acres of leasehold in the Core area of the play. Chesapeake’s proved developed reserves in the Fayetteville Shale are an estimated 117 bcfe, its proved undeveloped reserves are an estimated 97 bcfe and its estimated risked unproved reserves are approximately 5 tcfe after applying a 40% risk factor and assuming an additional 3,100 net wells are drilled in the years ahead. The company has increased its targeted results for horizontal Fayetteville Shale wells to 2 bcfe at a cost of $3 million on approximately 80-acre spacing using approximately 3,000’ horizontal laterals.

Deep Haley: In this West Texas Delaware Basin area, Chesapeake is the second-largest leasehold owner and the most active driller. Chesapeake’s production from Deep Haley is approximately 105 mmcfe net per day. The company is exploring on more than 1 million gross acres and is currently using nine operated rigs to further develop its 560,000 net acres of leasehold. Chesapeake’s proved developed reserves in Deep Haley are an estimated 137 bcfe, its proved undeveloped reserves are an estimated 145 bcfe and its estimated risked unproved reserves are approximately 1.4 tcfe after applying a 80% risk factor and assuming an additional 340 net wells are drilled in the years ahead. The company’s targeted results for vertical Deep Haley wells are $12 million to develop 6 bcfe on approximately 320-acre spacing.

During the 2007 third quarter, Chesapeake completed its third sale/leaseback transaction on 37 drilling rigs for net proceeds of approximately $235 million.

The company has now completed sale/leaseback transactions on a total of 70 rigs and anticipates completing similar transactions on its remaining 11 rigs during the fourth quarter of 2007. Also during the 2007 third quarter, Chesapeake completed a sale/leaseback facility for its natural gas compression assets. The company received approximately $160 million for the sale/leaseback of its existing natural gas compression assets and will fund up to $185 million of future natural gas compression assets under the same facility. Once the additional transactions are completed, Chesapeake estimates that virtually all of its historical cost in its 81 rig drilling fleet and its natural gas compression assets will have been monetized at a pre-tax cost of capital of approximately 5.5%.

The company is currently in the process of monetizing certain Chesapeake-operated producing assets in Kentucky and West Virginia.

The company intends to retain drilling rights on the properties below currently producing intervals and outside of existing producing wellbores. Chesapeake has received multiple attractive offers for the Appalachian assets with a variety of transaction structures. The company anticipates completing a monetization transaction by year-end 2007 for proceeds in excess of $1 billion. In addition, the company also plans to pursue four more monetizations of similarly mature properties in 2008 and 2009 for further proceeds of approximately $2 billion. For accounting purposes, the company anticipates that the proposed transactions will be treated as prepaid sales rather than property sales.

The company is also currently in the process of selling non-core E&P assets in the Rocky Mountains and in the southeastern Oklahoma Woodford Shale play for expected proceeds in excess of $300 million.

These sales are anticipated to close by the first quarter of 2008. In total, Chesapeake is anticipating receiving monetization and sale proceeds of approximately $3.3 billion by year-end 2009.

Key questions and answers from the third quarter fiscal 2007 earnings call conducted by Chesapeake Energy Corp on November 7, 2007.

Dave Kessler (Simons & Company): Looking at your latest changes to your hedging, it looks like you increased Q407, Q108, and decreased the balance thereafter. Can I read much into that?

Aubrey K. McClendon: That’s just growth in our production forecast and I do not believe we’ve changed our hedge positions in those out quarters at all.