Eagle Ford Shale (South Texas): Chesapeake’s activities in the Eagle Ford Shale in South Texas continue to drive strong results, yielding net production of 36,300 barrels of oil equivalent (boe) per day (gross 75,400 boe per day) for the 2012 second quarter, an increase of 615% year over year and 58% sequentially, which included an increase in liquids production of 745% year over year and 71% sequentially. Approximately 66% of total Eagle Ford production during the 2012 second quarter was oil, 17% was NGL and 17% was natural gas. Chesapeake expects price realizations for its Eagle Ford production to improve by approximately $5 per bbl beginning in October 2012 as new oil gathering pipelines and other infrastructure are completed.

As of June 30, 2012, Chesapeake had 337 producing wells in the Eagle Ford play, which included 121 wells that reached first production in the 2012 second quarter, compared to 62 in the 2012 first quarter and 27 in the 2011 second quarter. Also, as of June 30, 2012, Chesapeake had approximately 220 Eagle Ford wells drilled, but not yet producing, that were in various stages of completion and/or waiting on pipeline connection. Recent efficiency gains in drilling cycles of well spud to rig release and well spud to first sales, in addition to certain reductions in service costs, have resulted in cost savings of approximately 15% per well in the Eagle Ford. As a consequence of this greater drilling efficiency, the company is planning to reduce its drilling activity in the Eagle Ford from 28 rigs currently to 25 rigs by December 2012 and plans to average 22 rigs during 2013.

Utica Shale (eastern Ohio): Chesapeake continues to focus on developing the wet gas and dry gas windows of the Utica Shale play in eastern Ohio, where the company holds approximately 1.3 million net acres of leasehold, the industry’s largest position. As of June 30, 2012, Chesapeake had drilled a total of 87 wells in the Utica play and the company’s production techniques and geologic understanding of the Utica play are continuing to improve. Of the 28 wells with production information in the focus area, on a post-processing basis, peak rates have averaged approximately 1,000 boe per day, consisting of approximately 205 bbls of oil, 150 bbls of NGL and 3.8 mmcf of natural gas per day.

Chesapeake and its midstream partners are making substantial progress in the construction of gathering and processing systems that will be essential for accelerating production from this rapidly expanding and important play. Chesapeake is currently operating 11 rigs in the Utica play and plans to exit 2012 with 16 operated rigs. As of June 30, 2012, the company’s remaining drilling carry from Total was approximately $1.35 billion. Chesapeake anticipates using 100% of the drilling carry by year-end 2014 and the carry will pay for 60% of Chesapeake’s drilling costs during that time.

Marcellus Shale (Pennsylvania, West Virginia): With approximately 1.8 million net acres, Chesapeake is the industry’s largest leasehold owner in the Marcellus Shale play that spans from northern West Virginia across much of Pennsylvania into southern New York.

During the 2012 second quarter, Chesapeake’s average daily net production in the northern dry gas portion of the Marcellus play was 495 mmcfe, an in crease of 160% year over year and 19% sequentially.

Mississippi Lime (northern Oklahoma, southern Kansas): Chesapeake’s approximate 2.0 million net acres of leasehold is the industry’s largest position in the Mississippi Lime play in northern Oklahoma and southern Kansas. Production for the 2012 second quarter averaged 20,000 boe per day, up 198% year over year and 56% sequentially. Approximately 39% of total Mississippi Lime production during the 2012 second quarter was oil, 12% was NGL and 49% was natural gas. Since 2009, the company has drilled 158 horizontal producing wells in the Mississippi Lime play with attractive overall results and is currently operating 18 rigs in the play. The company continues to pursue a joint venture and/or sale of a portion of its Mississippi Lime leasehold and expects to announce a transaction in the next few months.