Haynesville Update
We want to take this opportunity to update you, the elected officials and stakeholders of the Haynesville and Bossier shale areas, about our operations, activities in the community and how we are continuing to be a responsible community partner.
August 2023
Operational and Financial Update
On Aug. 2, Chesapeake reported its 2023 second quarter financial and operating results. To learn more, see our news release, presentation and earnings highlights.
Business Unit Snapshot (2Q’23):
Adjusted EBITDAX(1)
$524mm
Capital
$505mm
lower end of quarter guide
Cash balance
~$900mm
as of 6/30/23
Production
~3.7 bcfe/d
high end of quarter guide
Increased base dividend
~4.5% to $0.575
per share per quarter;
to shareholders of record on 8/17/23
Stock buybacks
~$125mm
YTD cash returned
to shareholders
~$515mm
via dividends and buybacks
Drilled fastest well in CHK Marcellus history
<8 days
2,165′ per day
(average spud to TD)
HOA for natural gas delivery and up to
1 mtpa
of liquefaction capacity at Lake Charles LNG facility to support offtake HOA with Gunvor
Rating upgrades
Ba1/BB+
from Moody’s / Fitch
Net debt(1)-to-cap(1)
~10%
Net debt(1) / EBITDAX (1)
~0.3x
Marcellus RSG recertification
Grade A/A-
under MiQ / EO100™
(1) A non-GAAP measure as defined on our website.
Haynesville Operations:
- Currently operating five drilling rigs in northwest Louisiana.
- Currently operating one frac crew.
- Continuous pumping technology employed in 2023 has led to a greater than 20% increase in efficiencies relative to previous zipper operations.
Get to Know CHK Water Foreman Hunter Knighton
In each issue of the newsletter, we’ll introduce you to a member of our team working in the local area to help you get to know your Chesapeake neighbors. Our first feature is on Water Foreman Hunter Knighton.
Hunter started his career at Chesapeake as a lease operator before becoming a water foreman in our Haynesville operations.
As a water foreman, his main focus is overseeing saltwater transportation and disposal throughout our Haynesville operations. The role was created to have a central point of contact for all things related to produced water management. Having this centralized position allows Chesapeake to take a big picture approach to how water is managed. This means finding efficiencies in our contractor list, strengthening our relationships and having consistency with truck availability.
Hunter was born in Arkansas but has lived in Louisiana since childhood.
“It’s home for many of us — most of our guys grew up around here. We know the community and our landowners, many of them have my phone number and call me if there’s a question,” he said. “We also all really care about the environment, even more so since it’s our home. We have a strong sense of responsibility for this community — we’re invested and involved in it. For example, one of my goals is trying to reduce truck traffic and noise for our neighbors by installing pipelines and exploring water reuse.”
Outside of work, Hunter enjoys spending time with his family — his wife and two daughters, 8 and 10 years old. They enjoy camping together, spending time outdoors and cooking. He also likes to hunt and fish.
Growing in Mansfield
Construction recently began on Chesapeake’s new addition to its Mansfield office.
The addition will be approximately 9,100 square feet and will consist of 14 new offices and a common briefing/meeting room that will accommodate 200 people.
There will also be the appropriate supporting storage space and restrooms for the large meeting space.
The building is scheduled to be completed in May 2024.
In The Community
Chesapeake’s Haynesville team continues to be involved in a variety of opportunities as we strive to strengthen the communities in which we operate. Our H.E.L.P. (Help Energize Local Progress) Initiative provides our employees the opportunity to volunteer their time helping countless worthwhile non-profit organizations. Below are just a few of the community projects our team took part in the second quarter of 2023.
Support After Storms
Chesapeake employees jumped into action to help their neighbors following severe storms that hit northwest Louisiana earlier this summer. The storms caused severe damage, resulting in more than 250,000 without power in the summer heat.
Employees delivered pallets of water to eight cooling centers throughout Caddo Parish and provided a cooling trailer in North Caddo Parish at the Earl Williamson Park.
Additionally, the team worked with company vendor CNC Oilfield Services to help Holy Angels Residential Living Facility clear debris from the main areas, parking lots, playgrounds and walkways to ensure safety for residents and continued operations for the facility.
“Supporting our communities is extremely important to us at Chesapeake, so when we there’s a need, we want to do what we can to help,” said Michelle Cavanaugh, community affairs in the Haynesville. “We’re glad to be able to offer support and are thankful that there were no injuries from the storm.”
Meeting with the Community
We hosted several community meetings this summer in the Caddo, DeSoto, Red River and Sabine parishes. We loved getting to meet face to face with local officials and stakeholders in the area to share highlights of our Haynesville operations and answer questions.
LOGA Clay Shooting Sponsorship
Chesapeake was pleased to sponsor the Louisiana Oil and Gas Association 2023 Sporting Clays Shoot in June. The event was a big success with outstanding participation from the CHK Haynesville team and other operators in the area.
Celebrating Our Kids at Work
Our employees had a great time showing their families where they work for our annual Kids at Work Day event in July. They spent time together enjoying activities like trying on hardhats and workwear, seeing how field equipment works, learning CPR safety tips and much more.
ESG Update
Sustainability Report Published
In June, Chesapeake published its 2022 Sustainability Report, marking the company’s 11th year reporting on its environmental, social and governance (ESG) performance. This report continues the company’s commitment to transparency, enhanced disclosures and measurable progress. The report provides highlights from our 2022 performance, including:
- Achieved 100% RSG across two major basins: Chesapeake is the first company to certify its natural gas production across two major basins as Responsibly Sourced Gas (RSG). The company delivers approximately 6 bcf/d of gross operated produced volumes of RSG.
- Hired first Chief Sustainability Officer: Reporting directly to the CEO, our Chief Sustainability Officer Usha Turner leads the company’s sustainability strategy and reporting, among other responsibilities. An environmental engineer by training, she brings to the role extensive experience from within the energy industry.
- Improved safety performance across entire workforce: Through focused training and increased safety programs, Chesapeake lowered its employee, contractor and combined (employee and contractor) Total Recordable Incident Rate and Lost-Time Incident Rate. Contractor safety rates improved by approximately 50% year-over-year.
- Enhanced stakeholder relations: Creating multiple communications channels for stakeholders was a priority for Chesapeake in 2022. The company created dedicated stakeholder engagement teams by asset, adopted new technology to better track community engagement and hosted in-person meetings throughout our assets.
Visit our website to view the full 2022 Sustainability Report. For more information on our sustainability efforts, visit chk.com/sustainability, and stay up to date on Chesapeake employees’ related activities on ESG News.
Questions/Contact Information
We want you to know we are here to answer your questions. Our teams in the Mansfield and Haughton field offices speak with landowners every day as we prepare for future development.
Neil Lewis
Landman
318-751-2745
neil.lewis@chk.com
Sammy Briscoe
Maintenance & Construction
318-317-0597
sammy.briscoe.@chk.com
Chad Gafford
Health Safety & Environmental
318-540-4112
chad.gafford@chk.com
Michelle Cavanaugh
Community Affairs
703-853-7306
michelle.cavanaugh.com
Monty Mayfield
Land Manager
405-876-4256
monty.mayfield@chk.com
Matt Sheppard
Government & Regulatory Affairs
717-675-0264
matt.sheppard@chk.com
Jonathan Wheelis
Operations Manager
318-408-1325
jonathan.wheelis@chk.com
Ginger Adam Corley
Contract Lobbyst
gingeradam1@gmail.com