Chesapeake Energy Corp. last week reported year-end 2006 proved reserves grew 20% to 9 Tcfe, up from 7.5 Tcfe in 2005. The Oklahoma City-based independent, which will unveil its quarterly and yearly earnings on Feb. 22, replaced 348% of production last year, which included 237% organically through drilling and 111% through acquisitions.

The operated rig count now stands at 132 rigs, compared with 76 rigs at the beginning of 2006, CEO Aubrey K. McClendon said last week. Chesapeake operated about 98 rigs on average last year.

Like its peers, 2006 drillbit exploration and development (E&D) and reserve replacement costs were up. Chesapeake estimated 2006 drillbit E&D was $2.00/Mcfe; proved reserve replacement costs were an estimated $1.85/Mcfe. By comparison, 2005 drillbit E&D was $1.77/Mcfe; proved reserve acquisition costs were $1.74. The estimated E&D and reserve replacement costs excluded the costs to purchase undeveloped leasehold, acquire unproved properties, obligations for tax and asset retirement, and downward revisions to proved reserves from lower commodity prices.

In the last three months of 2006, Chesapeake said its output jumped 17% from the same period a year earlier to 152.1 Bcfe from 130.4 Bcfe. Sequentially, output in the final quarter of 2006 was 4% higher than 3Q2006’s 146.9 Bcfe. The uptick came even though Chesapeake temporarily shut-in 100 MMcf/d net last October in response to lower gas prices (see NGI, Oct. 2, 2006). Chesapeake’s full-year 2006 output reached an estimated 578.4 Bcfe, 23% higher than 2005’s 468.6 Bcfe.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.