WORKING HARD TO IMPROVE THE QUALITY OF LIFE IN NORTH TEXAS

A rev i ew o f C h e s a p e a ke ' s a c t i v i t i e s t h a t strengthen communities in the Barnett

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In 2010, Chesapeake paid $271 million in royalties to mineral owners in the Barnett, for a total of $1.1 billion to date. The company also directly employs 1,000 North Texans and employs thousands more as contractors. Chesapeake and its employees believe strongly in giving back to communities where they live and work. Last year, Chesapeake contributed $2.1 million to 200-plus local organizations, while employees donated thousands of public service hours. In addition, Chesapeake invested more than $1 billion drilling wells in 2010 and will spend approximately the same amount in 2011, bringing our cumulative investment in Tarrant and Johnson counties to more than $10 billion. We believe this is the largest capital commitment ever made by one company in Texas history.

NORTH TEXAS CAN CONTINUE TO COUNT ON CHESAPEAKE TO STIMULATE ECONOMIC GROWTH

A message from Chesapeake Energy Chairman & Chief Executive Ofcer Aubrey K. McClendon

The Barnett Shale is widely recognized in our industry as the granddaddy of all natural gas shale elds. The plays 5,000 square miles in 23 North Texas counties hold an estimated 50 trillion cubic feet of natural gas, which is enough to supply all of the gas-heated homes in the U.S. for ve years. The Barnett Shale has played a vital role in helping Chesapeake become Americas second-largest producer of natural gas. I am proud of the clean, abundant, affordable, American product we produce and our role as a pioneer in urban drilling. The knowledge and experience we have gained through our Barnett Shale operations have contributed to our success across the country. I salute the work of our employees, business partners and the communities in the Barnett Shale who made 2010 another successful year. Based on the impressive results we saw last year, we fully expect success to continue into 2011 and beyond. This year, Chesapeake plans to drill approximately 375 wells in North Texas by operating an average of 20 drilling rigs, which will keep pace with the previous year. To date, Chesapeake has drilled almost 2,000 gas wells in the Barnett Shale, with the largest production in Tarrant and Johnson counties. Based on peak month daily average production, Chesapeake operates the ve largest-producing wells in the Barnett Shale region. Chesapeake's capital investment in the Barnett for 2011 should exceed $1 billion, bringing our cumulative investments in Tarrant

The Barnett is creating great jobs for Americans, while lowering the nation's natural gas costs and cleaning the environment at the same time. When Chesapeake succeeds in the Barnett, so do numerous local communities, the State of Texas and the entire country. That's the way we do business in the Barnett.

and Johnson counties since 2004 to $10 billion. We believe this is the largest capital commitment ever made by one company in Texas history. The companys gross production now exceeds 1 billion cubic feet of natural gas per day. We are proud of the high quality jobs we are creating in North Texas. Chesapeakes hiring increased 17% in 2010 to more than 1,000 direct employees. We expect to increase our work force in the area in 2011. Advancing technology, coupled with the vast natural gas resources in the Barnett Shale, will allow us to continue with safe operations and increase our ef ciency in this magni cent gas shale play a North Texas treasure and an American one, also. With the continued support of local communities and regulatory agencies, we look forward to fueling the future of North Texas for many years to come. Best regards,

Aubrey K. McClendon
Chairman & Chief Executive Officer Chesapeake Energy Corporation May 2011

COMMUNITIES BENEFIT FROM CHESAPEAKES WORK IN THE BARNETT SHALE

A message from Chesapeake Energy Vice President of Urban Development Julie H. Wilson

The far-reaching bene ts to our communities from the vast natural gas deposits 1.5 miles below our feet in the Barnett Shale are enormous. Nearly everyone in North Texas is touched in a positive way by the natural gas industry. In 2010, Chesapeake paid $271 million in royalties to mineral owners in the Barnett Shale, bringing our total to more than $1.1 billion since 2004. The trickledown effect of this revenue bene ts everyone, regardless of whether they own their minerals. Chesapeake also invested more than $1 billion drilling wells in 2010 and will spend approximately the same amount in 2011, bringing our cumulative investment in Tarrant and Johnson counties to more that $10 billion. In addition, Chesapeake contracts with hundreds of local businesses, including trucking companies, builders, law rms, title companies, landscape architects, sign painters, parts manufacturers, facilities maintenance crews, hotels, automotive companies and more. It is easy to see how the local economy bene ts from natural gas. We are proud to broaden economic bene ts by producing domestic energy that creates jobs, stimulates businesses, strengthens cities and school districts, and grows local economies as a whole. A multitude of others are bene ting as well. Over the past several years, Chesapeake has donated millions of dollars to a wide variety of charitable and educational causes in the area. Additionally, local residents are enjoying the bene ts of increased tax revenues that fund schools and municipal services, while others have found that Chesapeake has made it possible for them to attend college through our scholarship programs. Many have developed an appreciation for the arts through our neighborhood engagement programs.

Ive been a resident here since 1986. I am committed to protecting the air we breathe and the water we drink. North Texas is my home, too.
This support is possible thanks to our more than 1,000 employees in the area. They hail from Arlington, Burleson, Cleburne, Euless, Fort Worth, Grand Prairie, North Richland Hills and other cities throughout the Barnett Shale. They live here and have the same respect for health and safety issues as their neighbors. Chesapeake employees in the Barnett Shale work hard to ensure this area remains a good place to live and raise a family. And they take pride in the fact that they are employed by a company that helps their communities move forward at a time when other areas of our nation struggle economically. With the help and support of our civic leaders and communities, Chesapeake can continue its history of success, which is shared with all North Texans. Sincerely,

Julie H. Wilson
Vice President of Urban Development Chesapeake Energy Corporation May 2011

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TIMELY ECONOMIC BOON FOR NORTH TEXAS

NORTH TEXANS SHARE IN ENDURING BOUNTY OF THE BARNETT SHALE

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Chesapeake has earned an international reputation for excellence by safely producing natural gas and improving the economy in North Texas. Not one nights sleep was lost at this local hotel as Chesapeake brought to the surface all the benefits of natural gas for area residents.
Cattle, cotton and oil were the kings of their day, and the sizeable role they played in the economic development of communities across North Texas continues to be felt. Many locals take pride in this rich heritage that built cities, created jobs and provided a level of economic stability that has endured through the years. Now, thanks to the Barnett Shale, natural gas has become the new heir apparent, taking its place among the list of abundant natural resources that have changed the landscape of North Texas for the better. Crowned the largest natural gas-producing eld in the nation, the Barnett Shale has created an energy renaissance of epic proportions. This eld, which produces about 30% of all U.S. shale gas, is projected to produce more than 50 trillion cubic feet of natural gas enough to support residential use of this energy source in Texas for more than 200 years. Revenue generated from the shale play annually pumps billions of dollars into the local economy and provides bene ts to all North Texans regardless of mineral ownership.

The in ux of revenue to the state and local municipalities could not have come at a better time. As the 2011 Texas Legislature convened, some estimate it was facing a $27 billion budget shortfall. Without the dollars pumped into the state economy from natural gas operations, the states budget de cit could have been much worse.

According to a recent report from Americas Natural Gas Alliance, the natural gas industry contributed the following positive economic impacts to the State of Texas in 2008:

$133 BILLION
The Barnett Shale has led to increases in business activity in the region that are notable tens of billions [of dollars] in output and hundreds of thousands of person-years of employment, said Dr. Ray Perryman, President and Chief Executive Of cer The Perryman Group, a respected economic research and analysis rm based in Waco, Texas. Given the environmental properties of natural gas and the rising global energy needs, that will only accelerate as the economy gains momentum. With much more natural gas still to be produced, it becomes clear that the long-term bene ts of this shale play have the potential to rival even the old mainstays of the Texas economy.

CHESAPEAKES WELLS ARE TOP PRODUCERS

The good news is that technology continues to improve, and Chesapeake employs new innovations to remain at the top of its eld. At the end of 2010, the top ve producing wells in the Barnett, based on peak month daily average, all belonged to Chesapeake.

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The No. 1 position was held by Chesapeakes White South #1H well in Arlington, Texas, with a peak month average of 17.824 million cubic feet of gas per day. This rate was 37% greater than the previous record holder, Chesapeake's Day Kimball Hill #A1, also in Arlington. The other top producing wells are located in Arlington, Crowley and Burleson.

The Barnett Shale has led to increases in business activity in the region that are notable tens of billions in output and hundreds of thousands of person-years of employment. Given the environmental properties of natural gas and the rising global energy needs, that will only accelerate as the economy gains momentum.

Dr. Ray Perryman,

President & Chief Executive Officer, The Perryman Group

GROWTH IN EVERY INDUSTRIAL SECTOR

While Chesapeake's partners which include families, businesses, nonpro t organizations, school districts and municipalities see a multitude of direct bene ts from natural gas production, additional economic advantages ow out to the entire regional economy. Exploration companies buy goods and services from area businesses, which in turn also buy from local rms, said Perryman. Workers at these companies go out and spend their salaries on houses, cars, clothing, restaurant meals and so on. Our impact studies clearly show positive effects in every industrial sector. Tim Scott, owner of Tarrant Construction, is among the small business owners witnessing a dramatic increase as a result of Barnett Shale activity. His company signed on to

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$133 billion in value-added economic output

(the value of a product over and above the cost of producing it)

More than $60 billion in total labor income Nearly $10 billion in state taxes and royalty payments In addition, the 2009 ad valorem taxes assessed due to the industry were $107 billion.

The industry's effect on the economy is far reaching. Entire communities will continue to benefit as natural gas in the Barnett is delivered to market.

complete several projects for Chesapeake, including the construction of the new Grapevine Learning Center, a natural gas educational facility for the community near the Grapevine Mills Mall. We started working with Chesapeake and our workload has increased about 40%, said Scott. We have contracted with Chesapeake for more than $2.7 million in construction services since January of 2010.

Hundreds of local contractors manage thousands more employees involved with Chesapeake in the Barnett.
Chesapeake itself employs more than 1,000 people in the Barnett, up 17% from the previous year. These jobs can be counted among the 53,800 mining and construction-related jobs in the Fort Worth-Arlington area, as reported by the Texas Workforce Commission in October 2010. This regional gure has remained relatively constant in recent years, despite the persistent de ated unemployment gures for the state and nation. By the end of 2010, the U.S. reported 9.8% unemployment, with Texas at 8.2%. Natural gas industry jobs are keeping that unemployment rate down in Texas. Nearly 1.3 million total jobs 12% of total employment in Texas can be attributed to the natural gas industry. Texas has by far the most direct and

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TIMELY ECONOMIC BOON FOR NORTH TEXAS

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indirect natural gas-related jobs, but the in uence of the natural gas industry on the economy is spread throughout the continental United States, reported ANGA in an economic analysis. Landscapers, surveyors, civil engineers, security rms, title companies, hotels, restaurants, retail stores and many other businesses bene t because natural gas operators and their employees are spending money in the local economy.

cities by injecting millions of dollars into the coffers of municipalities and school districts across the region. Despite local cities and school districts witnessing a pinch in budgetary spending due to the overall depressed economy, the economic picture for North Texas is better because of the Barnett. In a 2010 survey, local municipalities and school districts selfreported remarkable Barnett-related earnings. (see chart on page 13) Considerable amounts of oil and gas taxes

INCREASING REVENUE TO CITIES

Increased retail spending from those employed by the natural gas industry, either directly or indirectly, brings additional sales tax revenue to local cities and school districts beyond what is earned from natural gas-related property taxes and royalties. The City of Cleburne has recognized a positive trend in its sales tax revenue that is attributable in large part to natural gas activity. The Citys December 2010 Economic Development Trends Report shows sales taxes for that month increasing by 37% over December 2009 an impressive high point in an eightmonth upward trend. I think some of it is in part due to the Barnett and the gas operations that are going on, recently retired Cleburne City Manager Chester Nolan said of the uptick in sales tax receipts. Its been a good thing for the City, Nolan said of the Barnett Shale development. We havent experienced a lot of the dif culties that some of the other places have. The Barnett Shale has cushioned the effect of dif cult nancial times for many

are rolling into state coffers, as well. In 2010, oil and gas taxes accounted for 14.5% of taxes paid by industries in Texas, according to data collected from the State Comptrollers Of ce. While the overall economic impact to state, cities and school districts from numerous Barnett Shale natural gas operators may be dif cult to pinpoint, Chesapeake can speak to the revenue it has generated in the Barnett. Below are a few examples of royalties paid by Chesapeake since beginning operations in the Barnett.

CHESAPEAKE CUMULATIVE ROYALTIES PAID THROUGH 2010

Several hundred business owners in the area were honored recently during

City of Fort Worth $ 46 million

Birdville ISD $ 837,000

Vendor Appreciation Night at Chesapeake Plaza. Thousands of local workers are connected in some way with Chesapeake's operations in the Barnett.

City of Cleburne $ 33 million

Mansfield ISD $ 821,000

City of Burleson $ 7 million

City of Arlington $ 820,000

Fort Worth ISD $ 1.9 million

City of Grand Prairie $ 132,000

And many Barnett wells are not yet on line. Royalties are expected to rise as more wells begin producing, provided that operators can continue to connect wells to pipeline systems to transport the gas. Out of the more than 230,000 families and business owners who have leased with Chesapeake in North Texas, about 10,000 currently earn royalties, while hundreds or thousands of rst-time royalty recipients are added monthly. In addition to generating revenue in the form of bonuses and royalties, energy companies are consistently top taxpayers in the region: ve out of the top 10 Tarrant County taxpayers in 2010 were natural gas producers, with Chesapeake listed as No. 3. Chesapeake was the No. 1 taxpayer in Burleson and the Crowley ISD in 2010.

endowment fund for scholarships in cooperation with Tarrant County College. It was the vision of the board to utilize a portion of the oil and gas proceeds to impact directly the lives of students, said Birdville ISD Board President Dolores Webb at the programs launch. By continuing to fund this endowment through oil and gas royalties, we hope to impact young lives for years to come. The program provides an opportunity for any Birdville ISD graduate who has not received any other form of tuition assistance to receive a scholarship that covers the cost of one years tuition at any Tarrant County College campus. More than 100 students are enrolled as a result of this innovative program. Richland Hills resident Andrea Santoy, whose daughter Gabriella is a scholarship recipient, indicated the scholarship has been an enormous gift to their family. Its been like a burden lifted off of us, said Santoy. I feel it is a great commitment [for the school district]."

Birdville ISD has allocated

$7 million
of its natural gas lease proceeds to the ongoing education of its youth by establishing an endowment fund for scholarships in cooperation with Tarrant County College.

BARNETT DOLLARS AT WORK IN THE COMMUNITY

Cities and school districts have chosen to use their natural gas-related income in a variety of ways to enhance the quality of life for the majority of citizens within their communities. Increased revenue has enabled Cleburne to develop the new 45,000-square-foot Cleburne Conference Center, which opened in February 2010. Natural gas revenue also partially funded a new Chamber of Commerce Economic Development Of ce and city golf course. Our portion of the conference center was funded out of the royalties that we received on property that the city owns, so that was pretty much a direct result of Barnett Shale and the natural gas industry, said Nolan. There have been a number of different things that have been funded with natural gas revenue.

A BETTER TOMORROW
Each municipality and school district makes a unique decision about how to prudently use natural gas-related income, from establishing foundations and rainy-day funds to beautifying parks and improving infrastructure. The result is that families living throughout North Texas are experiencing a better quality of life. Children attending local schools are receiving an enhanced educational experience. Local businesses are experiencing growth. People from all walks of life are bene ting in lasting ways. The legacy of the Barnett Shale will surely be appreciated for many generations to come.

EXPANDING THE AREA'S EDUCATIONAL OPPORTUNITIES

Birdville ISD has allocated $7 million of its natural gas lease proceeds to the ongoing education of its youth by establishing an

ENTIRE NATURAL GAS INDUSTRY GENERATES MAJOR REVENUES FOR LOCAL MUNICIPALITIES AND SCHOOLS
NATURAL GAS INDUSTRY REVENUE TO MUNICIPALITIES & SCHOOLS
Municipality Arlington Burleson Cleburne Euless Grand Prairie Haltom City Fort Worth N. Richland Hills ISD Arlington Birdville Eagle Mtn./Saginaw Everman HEB Mansfield White Settlement 2010 Bonuses $ 4.2 million $ 702,000 $ 281,000 $ 6.6 million
($ 14.5 million paid '08)

MINERAL TAX INCOME/MUNICIPALITIES & SCHOOLS

2010 Royalties $ 10.9 million $ 1.9 million $ 3.3 million $ 1.9 million $ 132,000 $ 19,000 $ 13.0 million
(pending production)

Municipality Arlington Benbrook Burleson Cleburne Forest Hill Fort Worth Mansfield Tarrant County ISD Aledo Burleson Eagle Mtn./Saginaw Fort Worth Godley Northwest White Settlement

2010 Tax Income $ 909,000 $ 370,000 $ 669,000 $ 466,000 $ 104,000 $ 11.1 million $ 1.1 million $ 11.0 million 2010 Tax Income $ 776,000 $ 10.3 million $ 9.2 million $ 11.1 million $ 390,000 $ 11.6 million $ 2.4 million

$ 415,000 $ 16.0 million $ 1.3 million 2010 Bonuses $ 1.5 million $ 240,000
($ 513,000 paid '08 - '09) ($ 215,000 paid '08 - '09)

2010 Royalties $ 229,000 $ 398,000 $ 119,000 $ 78,000

(pending production)

$ 228,000 $ 2,500 $ 504,000

$ 1.8 million $ 40,000

Self-reported sampling from cities and school districts.

Sampling obtained from Tarrant and Johnson Appraisal Districts tax rolls.

NATURAL GAS INDUSTRY REVENUES COULD PAY FOR:

10 Police Cars $300,000

7 School Buses $500,000

2 Fire Trucks $1 million

2 School Gyms $5 million

RISING TREND OF NATURAL GAS INDUSTRY MINERAL TAX REVENUES

Municipality Fort Worth 2007 $ 1.2 million 2008 $ 2.7 million 2009 $ 8.8 million 2010 $ 11.1 million

Steadily rising revenues, like this, are helping cities and school districts throughout North Texas receive welcomed income from the Barnett Shale.

All figures above represent the natural gas industry's impact to our community.

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DOING WELL, AND DOING GOOD

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LEADERS OF TOMORROW RECEIVING CHESAPEAKE'S HELP TODAY

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Students of all ages benefit from Chesapeake's support of education. Future leaders are receiving a head start from Chesapeake, like these youngsters enrolled in one of the company-sponsored math and science programs.
Education is a lifelong activity that has an enormous impact on society. Chesapeake continually strives to be a conscientious corporate citizen, partnering with schools and providing nancial support and scholarships in the Barnett Shale. In 2007, Chesapeake initiated a scholarship program with a donation of $1.25 million. The company then challenged residents in Fort Worth and Dallas to raise an additional $1.25 million within one year for Chesapeake to donate an additional $1.25 million. The successful fundraising efforts from both cities and Chesapeake created a $3.75 million program to help make higher education possible for students of both cities. Since then, 48 bright, deserving minority students have been awarded scholarships from this program. The Chesapeake Scholarship Fund awards up to $20,000 per year, per student, for up to four years at schools of their choice. The generous awards enable students to ful ll their college dreams without nancial worries.

Chesapeake also sponsors the Johnson County Chesapeake Scholarship for students in need of nancial assistance. The fund provides up to $3,000 a year for four years, relieving nancial burdens so that students can attend the college or vocational school of their choice.

PROVIDING A BOOST TO EDUCATION

Chesapeake partners with education in other ways. The company works with the Harvest House Little Red School House program to provide school uniforms for 400 Burleson Independent School District students in need. Chesapeake offered to match the funds raised by Harvest House, dollar for dollar, to raise $10,000 in 2010. Through the Tarrant County Kids Vision of Life program, Chesapeake partnered with Essilor Vision Foundation and Alcon Laboratories to bring vision screenings, eye exams and free glasses to hundreds of students in the Fort Worth ISD. Chesapeake has supported the Grapevine-Colleyville ISD Education Foundation, which provides funds beyond its normal operating budget for educational programs and activities for students and staff at Grapevine-Colleyville ISD. Another boost to education was the Generation Hope Laptop Program, which provided laptops and a structured computer curriculum to 160 sixth-grade students at six schools in the Crowley, Everman and Fort Worth ISDs. Also, more than 240 Fort Worth ISD students discovered that real-world applications of math and science can be fun at the Texas Christian University Math and Science Trail. In addition to monetary contributions, Chesapeake hosted nearly 500 Fort Worth ISD students and teachers for the annual Campus Teacher of the Year Awards in 2010. Chesapeake also supports the Southwest Academy of Petroleum Engineering and Technology at Fort Worths Southwest High School. The academy provides selected
Students from Tarrant, Dallas and Johnson counties benefit from meaningful Chesapeake scholarships. Some of those students include, clockwise from top left: David Rios, Texas Tech University; Brenda Salinas, Texas Wesleyan University; Allison Brown, University of Texas; Diana Serrano, Texas Christian University; Janet Alonzo, Texas Christian University; and Kaley Ownbey, Tarleton State University.

students with special insight into the natural gas and oil industry and encourages them to undertake careers in the eld. Funded by Chesapeake, this school-within-a-school is the rst of its type in North Texas and is a key to identifying tomorrows leaders today. And through the Score a Goal in the Classroom program, Chesapeake helped recognize the most outstanding educators in public schools in Dallas, Johnson and Tarrant counties. The program features a community-based HERO award that honors 25 teachers for

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We are thankful when private industry steps up to the plate to help an educational organization. Since Chesapeake came into our community, they have played a good neighbor role and realized what was needed.

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Janice Kane, Executive Director, Grapevine - Colleyville ISD Education Foundation

their skills, performance and interaction with communities. The HERO award includes an honorarium from Chesapeake and public recognition in appreciation for all that these educators accomplish for the community. As for the future, Chesapeake is dedicated to helping children reach their full potential through quality education.

More than 240 students from 40 Fort Worth ISD schools participated in the Chesapeakesponsored Math and Science Trail at TCU. Throughout the year, the company supported nearly 30 public and private schools, as well as colleges. In addition, Chesapeake partnered with more than 20 local educational foundations and related agencies.

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DOING WELL, AND DOING GOOD

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BUILDING STRONG NEIGHBORHOODS AND COMMUNITIES IN THE BARNETT

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Chesapeake took a very active role in helping North Texas communities in 2010. The company assisted more than 200 civic, professional and community service organizations throughout Johnson, Tarrant and western Dallas counties.
Through these and other efforts, Chesapeake and its employees work hard to give back to the communities in which the company operates. Chesapeake is dedicated to enhancing the lives of its neighbors in these communities places that its employees also call home. Philanthropy and civic involvement are key operating principles at Chesapeake, a company that strives to improve the quality of life for people throughout the Barnett, including those who dont directly bene t from natural gas revenue payments. Through a generous corporate giving program, many North Texans are touched by Chesapeakes successful operations in the Barnett. It means donating vehicles to police and re departments. It includes sponsoring holiday festivals and other community events throughout the year. It entails bringing gardens and a healthier way of life to elementary schools in North Texas. It also involves donating computers and back-to-school supplies, underwriting special health and arts programs, and community enrichment activities.

Last year was an especially meaningful one for the company, as Chesapeake assisted more than 250 civic, professional and community service organizations throughout Johnson, Tarrant and western Dallas counties. The company contributed more than $2 million to 200-plus organizations representing education, health, social services and other areas.

To date, Chesapeake has donated more than $13 million to support programs in our communities, earning a reputation as one of the most philanthropic businesses in the energy industry and one of the most generous companies in the Barnett Shale.

Without your help, the food bank and its partner charities wouldnt be able to feed as many people as we do, said JoAnn Biggers, Volunteer Coordinator at the Tarrant Area Food Bank. Chesapeake is a place where senior

As further civic involvement, Chesapeake sponsored or maintained memberships in 35 local chambers of commerce.

management team members share their insight and leadership as board members for nonpro t organizations. Construction foremen serve as volunteer re ghters. Land technicians tutor grade school students. Administrative assistants provide warm meals to senior citizens. Each year, Chesapeake is proud to support the United Way, whose wide range of programs positively affects thousands of North Texas residents, young and old.

H.E.L .P. INITIATIVE

By fostering an environment that encourages that kind of generosity, Chesapeake provides its employees with the opportunity to donate their time and talent to the community through its H.E.L.P. (Helping Energize Local Progress) initiative. The results have been tremendous. In 2010, employees in the Barnett Shale donated 2,000 hours of

UNITED WAY
In 2010, Chesapeake and its employees in Johnson and Tarrant counties exceeded an overall fundraising goal for the United Ways Live United campaign with a generous pledge of $358,752. The total includes $106,131 for the United Way of Johnson County a record pledge that doubled Chesapeake employees previous giving and made the company the largest United Way donor in the county and $252,621 for United Way of Tarrant County.

In 2010, Chesapeake and its employees in Johnson and Tarrant counties exceeded an overall fundraising goal for the United Ways Live United campaign with a generous pledge of
Chesapeake and its employees showed their generosity throughout the year. Employees donated
Not stopping there, employees donated time throughout the year to organizations such as the Community Enrichment Center, Johnson County Christian Lodge, Cook Childrens Medical Center, Habitat for Humanity in Cleburne, Salvation Army, Union Gospel Mission, Boy Scouts of Johnson County and others. In addition, Chesapeake volunteers built fences, welcomed troops home at DallasFort Worth International Airport and sorted food at the Tarrant Area Food Bank. Their efforts were greatly appreciated.

$358,752.
service to dozens of local organizations between Memorial Day and Labor Day.

The funds encompass generous donations by Barnett Shale employees, a dollar-fordollar company match and money collected through a number of creative fundraising activities. Employees at Chesapeake and its af liates surpassed their Live United goals in other ways. While the employee participation goal was 75%, Chesapeake actually saw a remarkable 90% staff participation. Julie H. Wilson, Vice President of Urban Development in the Barnett Shale, served as 2010 Chair for the United Way of Tarrant County. Chesapeake, she said, vigorously

2,000 hours of
service to local organizations, while their employer led by example and gave back to the community in a multitude of charitable ways.

supports the United Way mission to create long-lasting changes and improve lives across its diverse communities.

COMMUNITY RECOGNITION
Chesapeake was recognized by the community for several awards in 2010. These included Corporate Partner of the Year by the Fort Worth Metropolitan Black Chamber and Chairman's Choice Award, from the Northeast Tarrant Chamber of Commerce, among others.

Chesapeake has been a great partner of ours and continues to be a model of support.

Fort Worth Metropolitan Black Chamber

COMMUNITY EVENTS
Chesapeake has a long history of sponsoring events to enhance the areas livability and pride. To date, Chesapeake has donated more than a quarter million dollars to family-oriented community events, such as Mayfest. Proceeds from Mayfest, nearly $6 million, have supported the enhancement of city parks, including recreational development of the Trinity River. Chesapeake has also supported Fort Worth's Main Street Arts Festival. The premier arts and music festival spotlights downtown and serves as a catalyst for business, residential and cultural growth. In 2010, Chesapeake was the presenting sponsor of the inaugural Summer Childrens Concert Series at the Arlington

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Devoyd Jennings,

Levitt Pavilion, an outdoor venue in the heart of Arlington.

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The pavilion saw record crowds for the summer concert series, attracting 10,000 children, parents and youth leaders.

Our numbers doubled, thanks to Chesapeakes involvement and sponsorship.

Cathy ONeal, Levitt Pavilion, Arlington

Several years earlier, Chesapeake provided a major building grant during the initial construction phase of the Levitt Pavilion. This has really invigorated our downtown, Arlington Mayor Robert Cluck said recently. And it was all of us working together that made it a reality. Later in the year, Chesapeake was a principal sponsor of the fourth annual Lone Star International Film Festival. The festival raises the level of lm appreciation in Fort Worth's diverse cultural landscape. In addition to these events, Chesapeake hosted the Texas Ballet Theater Fire and Ice, Greater Fort Worth Real Estate Council Cowtown Poker Run, United Community Center Wild About Chocolate and The Womens Center of Tarrant County Men Who Love Women bene t.

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BUILDING COMMUNITY
Chesapeake also contributed to Fort Worth Zoos Museum of Living Art, a spacious facility showcasing reptiles, amphibians and other exotic animals.

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DOING WELL, AND DOING GOOD

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Chesapeakes gift helped us secure the largest saltwater crocodile in any U.S. zoo or aquarium, an animal that is an icon for the museum and is already mesmerizing our visitors, Fort Worth Zoo Executive Director Michael Fouraker said. Chesapeake also donated funds to build The Chesapeake Pavilions for hosting events to generate money for zoo projects and to help keep admission prices low.

HOLIDAY CELEBRATIONS
Chesapeake makes a point of helping local communities observe the holidays in style. Chesapeake sponsored multiple Independence Day events in Alvarado, Arlington, Burleson, Cleburne, Crowley, Fort Worth, Grand Prairie, Joshua, Mans eld and other areas. As the year came to a close, the 28th annual Chesapeake Energy Parade of Lights electrifying procession of oats, marching bands and equestrian teams attracted 200,000 spectators to downtown Fort Worth. Chesapeake also provided one of the best light displays in town at Chesapeake Plaza, where red and green spotlights atop its 20-story building illuminated the night sky. In addition, a hundred trees were wrapped in thousands of sparkling LED lights. The spectacle attracted bus tours and hundreds of visitors each night.

In true Christmas spirit, Chesapeake took the Cowboy Santas shopping and donated $10,000 in toys to add joy to the holidays for area children.
The company sponsored other holiday events throughout the Barnett Shale, including the Arlington Holiday Lights Parade, Cleburne Whistle Stop Christmas and a Night of Holiday Magic in North Richland Hills. In historic Grapevine, thousands of delighted children hopped aboard the North Pole Express for an enchanting Christmas train ride. Employees also joined the Fort Worth Southside Optimist Club to provide a once-in-alifetime Kohls shopping spree known as Clothes for Kids to 56 Fort Worth students. Some of these kids have never been in a store, they just have hand-me-downs, said Optimist Club member Bernard Hamilton, who chaired the event. In an effort to supply the basic necessities, Chesapeake worked alongside the Ambassadors of Fort Worth to provide holiday food to needy families.

ASSISTING YOUTH
Chesapeake recognizes the importance of serving youth in our community and assists many organizations on a regular basis to help meet the needs of our leaders of tomorrow. For example, the company has underwritten the Tarrant County Back to School Roundup,

Chesapeake was a leader in 2010 in many ways, including sponsorship of the Ben Hogan Award at the Colonial Country Club, Fort Worth's Parade of Lights and Arlingtons Levitt Pavilion Childrens Concert Series. Arlington Mayor Robert Cluck, left, said the Pavilion, for which Chesapeake was a major sponsor, has reinvigorated our downtown. Above, Chesapeake lit up the holidays at its headquarters and brightened the lives of many people.

a collaboration that has provided backpacks, school supplies, new shoes and haircuts to 10,000 youngsters. In the past year, Chesapeake donated laptop computers and docking stations to South Hi Mount Elementary School in Fort Worth to replace stolen equipment.

organization that brings gardens to some 70 underserved elementary schools in North Texas. Chesapeake selected eight schools within four districts, which included Arlington, Birdville, Fort Worth and Grand Prairie. At I.M. Terrell Elementary School in Fort Worth, students, parents, teachers and volunteers from Chesapeake and other groups worked together to prepare

School children gain knowledge outside the classroom through Chesapeake's sponsorship of the REAL School Gardens Program. Chesapeake also reached out to many service organizations to help them assist others. It is especially gratifying to Chesapeake when donations, such as vehicles, can help organizations gain more mileage in their efforts to serve their neighborhoods and communities.

As a TCU Energy Zone sponsor, Chesapeake helped bring together children from public schools in Arlington, Azle, Fort Worth, Keller, Mans eld and other districts for a campus tour and the opportunity to root for the Horned Frogs during the football season. Chesapeake also donated 10 laptop computers to Camp Fire USA to support childcare training and after-school and summer programs. Because of this generous donation, our program staff will have what they need to be able to communicate more effectively with parents, as well as council headquarters, said Ami Edwards, Director, Camp Fire After-School Programs. Enhancing the classroom in 2010, Chesapeake provided $25,000 to REAL School Gardens, a Fort Worth-based

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vegetable gardens and ower beds.

This garden will provide an incredible environment in which to learn about ecosystems, life cycles and animal adaptations.

Joann Dickerson, I.M. Terrell Principal

Chesapeake also supported the National Association of Realists Youth Academy Conference. More than 50 young people, ages eight to 18, attended the event and learned about real estate, nance, insurance, money management and entrepreneurship. Chesapeake also donated an AquaTrek ramp valued at $6,550 to the Amon G. Carter, Jr. Downtown Fort Worth YMCA. The ramp gives children, seniors and those with physical challenges access to the YMCAs James L. and Eunice West pool.

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VEHICLE DONATIONS
Chesapeake continued to support dozens of local police and re departments through vehicle donations. The long list of recipients included Johnson County Sheriffs Of ce, Joshua Police Department and the Venus Volunteer Fire Department.

Chesapeake is an outstanding community partner of the sheriffs of ce and this donation will allow us to expand our School Resource Of cer Program, said Johnson County Sheriff Bob Alford. The addition of this security vehicle will allow law enforcement of cials to have a stronger presence at the schools we serve. In addition, Chesapeake donated vehicles to numerous organizations, including Catholic Charities Diocese of Fort Worth, Inc. The vehicle allows Catholic Charities to

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continue its support of family services, other services.

housing for the elderly and disabled, and

Chesapeake is a great example of why businesses exist and that, ultimately, is to add value to the community. Here, at Catholic Charities, we believe corporations and charities cant exist without each other.

Indeed, giving back to the community is a core value at Chesapeake. And employees know that their time, talent and contributions help enhance the quality of life for their friends, families and neighbors. Through social responsibility and corporate philanthropy, Chesapeake remains accountable to the community, today and in the future.

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Sara Ramirez, Catholic Charities

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COMMUNITY PERSPECTIVE
Chesapeake Energy was instrumental in the success of our 22nd annual Men Who Love Women benefit. Not only did they provide the use of their beautiful lobby ... but their additional cash donation allowed The Womens Center to raise more dollars to help provide critical services.
Chrisee Huffman, Development Director, The Womens Center, Fort Worth

Chesapeake has brought a lot of business to Cleburne Regional Airport. A lot of the natural

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gas industrys service companies come in with their company aircraft. All the activity has brought in aircraft that wouldnt come in if it wasnt for the Barnett Shale.
Jerry Cash, Director, Economic Development for the City of Cleburne

For the many people served by Meals On Wheels, Chesapeake partners to say, We havent

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forgotten you, and you are someones mother and someones grandmother or someones cousin or someones neighbor.
Denise Harris, Meals On Wheels Spokesperson, Tarrant County

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Its extremely important to have Chesapeake in this area. The value that it brings long-term

is tremendous. Chesapeake has given us many contracts and I cant say enough about them as far as creating jobs and providing value to the community. Theyve been wonderful.
Marsha Newberry, Owner, Signature Contracting Services, LLC, Grand Prairie

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If you take a look at the number of motels, hotels and restaurants that have popped up here, clearly natural gas continues to be a strong driver for local industry.
Sandy Finkelstein, Senior Vice President, Walls Industries, Cleburne

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Like most Texas schools, our school district is facing unprecedented budget challenges under the current school finance laws. Chesapeake Energy has generously donated resources for the past few years to the Education Foundation.
Janice Kane, Executive Director, Grapevine-Colleyville ISD Education Foundation

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I can say without hesitation that the support Mayfest receives from Chesapeake Energy helps to ensure our success each year. Without strong community support, both from sponsors and patrons, Mayfest would not exist.

Shannon Baumgardner, Marketing Manager, Mayfest, Inc., Fort Worth

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NATURAL GAS LEADS TO VIBRANT FUTURE, ENERGY INDEPENDENCE FOR FUTURE GENERATIONS

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Chesapeake takes great pride in sponsoring local Independence Day celebrations throughout the Barnett Shale. Local residents partner with Chesapeake to help lead our nation closer to energy independence and a cleaner environment.
A GAME CHANGER FOR ENERGY INDEPENDENCE
The Barnett Shale is what swung the door open, according to Morgan, leading us to an understanding that we could be energy independent. Opening up the shale opened up the door to a vast domestic reserve. Americans count on energy every day and in many ways. Fortunately, clean burning, domestic and abundant natural gas is right here under our feet. The Barnett Shale, the nations largest gas-producing area, is also improving lives and strengthening our economy. Chesapeake is at the forefront of bringing this positive energy to the public, and experts in the eld are taking notice. A leader. Thats how Dr. Ken Morgan, Director of the Energy Institute at Texas Christian University, describes Chesapeake, a company that works diligently to be a good neighbor and community partner.

Thanks to the technology being used to develop the Barnett Shale, what seemed impossible is now possible, as operations are conducted safely and responsibly.

Producing natural gas responsibly in the Barnett Shale is a top priority at Chesapeake. Local residents can take pride in partnering with a company that is creating a cleaner environment and reducing our dependence on foreign oil for our energy needs.

The number being used a lot is that we have, at current rates of consumption, in excess of 100 years of supply in natural gas reserves, said Ed Ireland, Executive Director of the Barnett Shale Energy Education Council. According to a Fort Worth Star-Telegram report, oil industry veteran Gene Powell said that within the next 100 years, the Barnett Shale alone will produce a vast amount of natural gas that will be roughly quadruple the current annual U.S. gas production. Powell, publisher of the respected Powell Shale Digest, also said the U.S. will use natural gas as its primary energy source in the decades to come. It is for reasons like this that Morgan calls the Barnett Shale a game changer. Morgan and other experts call natural gas a bridge fuel to change the way we pursue energy for transportation, electricity and the like. And he believes its only the beginning. Energy independence is important for the sake of the American economy as well as national security. Morgan hopes to see that opportunity seized for the sake of our grandchildren and future generations. In my lifetime we didnt have a choice, he said. They do.

THE CLEANEST FUEL WE HAVE

One of the primary reasons Morgan and others believe natural gas holds such promise for the future is its ability to support our energy needs while reducing harmful emissions. Natural gas is the cleanest fuel that we have, said Ireland. The uses of natural gas are numerous. Its a power generator. It heats our homes. It can power our automobiles. In fact, one prominent natural gas-powered car is traveling the streets of Fort Worth, thanks in part to Chesapeake. The company and other local operators presented a natural gas-powered Honda Civic to the TCU Energy Institute. Dubbed the Frogmobile, its emissions are 30 percent cleaner than gasoline-powered vehicles, and the price of a gallon of fuel equivalent runs between 75 cents and $2.

The Barnett Shale is a vital part of the countrys pursuit of cleaner air. And that starts right here in North Texas by safely and responsibly producing natural gas.
All the companies that operate here use the best available technologies, explained Ireland. They go above and beyond the state and local regulations when it comes to drilling. Chesapeake, for instance, was awarded the U.S. Environmental Protection Agencys Natural Gas STAR Production Partner award in 2009 for its voluntary partnership to

encourage oil and natural gas companies to adopt cost-effective technologies that improve ef ciency and reduce emissions.

Chesapeake's more than 1,000 employees live here. Their children attend school here. They drink the water and breathe the air, just like other citizens.
AN ECONOMIC INFUSION
The hard work of local residents at Chesapeake is also taking the local economy by storm, and it is becoming well recognized in our communities. The Barnett Shale trend now produces in 23 north-central Texas counties around Fort Worth and is the largest urban drilling environment in the world, reported Victor Carrillo, immediate past Chairman of the Texas Railroad Commission. He released the statement in late 2010, reiterating the importance of the Barnett Shale and the natural gas industry. Projections have estimated that between 2001 and 2015, the Barnett Shale will contribute $100 billion in output and 1 million person-years of employment at the very time when Texas and our nation most need jobs, economic development and domestic energy security, Carrillo said. Similarly, Sen. Kay Bailey Hutchinson, R-Texas, wrote in a December column in the Cleburne Eagle News, Oil and gas

exploration is critical to our states economy. The industry supports 400,000 workers and pays nearly $40 billion in salaries and wages in Texas alone. Thousands of those jobs are here at home. The industry has brought many jobs to the Metroplex, said Chris Klaus, Senior Program Manager for the North Central Texas Council of Governments, [which is] an element that prevented the economic downturn that youve seen elsewhere in the country. It creates an impact so broadly, Ireland said. Not only does activity create the obvious jobs at the drilling rig, he said, but it trickles down to many other job growth areas, from the legal eld to the hotels at which people stay. Its a reason weve avoided some of the worst of the recession.

FOLLOWING THE ECONOMIC IMPACT

In addition to creating jobs, the Barnett Shale has pumped money into private households, businesses, churches, universities, school districts and cities. Many have chosen to earmark the money from gas leases in different ways, but capital improvements are a popular choice for local municipalities to spend their natural gas revenue.

Chesapeake Plaza not only serves as a welcome beacon along the Fort Worth skyline, but is also the setting for numerous community events throughout the year.

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The purchase of the Chesapeake Plaza building signaled a commitment to a long-term presence that is important to Fort Worth, both to the existing business community and those who wish to expand or relocate here.

According to a report generated by the City of Fort Worths nance department, the city has spent most of its gas bonuses and royalties on capital improvement projects. This is important, as it allows the city to meet the needs of a growing community, even in the face of slower economic times. The city is improving parks and water systems, building and maintaining streets, and upgrading city facilities including airports, all thanks to the Barnett Shale. Gas revenues have helped salvage programs such as the citys tree farm. The farm, which grows trees to plant as streetscape or in other public areas, was scheduled as a budget cut two years ago but was salvaged in part by royalty funds.

After going dark in recognition of stressful economic conditions, those skylights were lit again by Chesapeake after its purchase of the building in 2008 from Pier 1 Imports. The purchase of the Chesapeake Plaza building signaled a commitment to a long-term presence that is important to Fort Worth, both to the existing business community and those who wish to expand or relocate here, Berzina said. Built in 2004, the building quickly became a prominent part of the downtown landscape, occupying 14.7 acres near the banks of the Trinity River. It houses 460,000 square feet of of ce space. According to Fort Worth Mayor Mike Moncrief, the move was an enormous commitment on the part of Chesapeake, and it con rms the companys long-term strategy to remain in our city as a leading producer of natural gas in North Texas and beyond.

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David Berzina, Fort Worth Chamber of Commerce

COMMITTED TO STAY
The important role Chesapeake plays in North Texas is well recognized. Chesapeake has been a leader in corporate stewardship since entering the Barnett Shale play, said David Berzina, Executive Vice President of Economic Development for the Fort Worth Chamber of Commerce. He cites Chesapeakes sponsorship of community events such as the annual Parade of Lights and the buildings purple skyline spotlights in support of TCU as examples of their enthusiasm for being part of Fort Worth.

Chesapeake has made a true investment in our city and a long-term commitment to being a responsible corporate citizen. But the investment is far bigger than our local, state or even national economy. Its about our future. Looking beyond Fort Worth and into the future, natural gas is without a doubt our nations best hope for abundant, domestic and clean-burning fuel, Berzina said.

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BENEFITS OF BARNETT SHALE COVETED AROUND THE WORLD

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Honoring requests from around the globe, Chesapeake conducts frequent tours of its natural gas operations in the Barnett Shale. Admired and appreciated by other cities throughout the world that desire the enormous economic benefits and improved quality of life it provides, the Barnett continues to be the pride of North Texas communities.
And for good reason. The Barnett Shale is a shining example of how natural gas can be safely and ef ciently produced, while at the same time bolstering local economies, creating jobs and improving lives for local residents. As the world ponders the possibilities that natural gas production offers as a clean, affordable and abundant energy source, eyes continue to focus on the Barnett Shale. Global interest in our company was obvious at the start of 2010, when Chesapeake announced a major joint-venture transaction with Total E&P USA, Inc., a wholly owned subsidiary of Paris-based Total S.A., which had an interest in helping develop the Barnett Shale. Following the joint-venture agreement, Chesapeake hosted approximately 60 energy experts from Total, who learned more about Chesapeakes best practices and successes in the Barnett Shale, which have gained attention not only in France, but around the world.

In September, Chesapeake hosted 120 attendees from the U.S.-China Oil and Gas Industry Forum. The gathering assisted the U.S. Department of Energy and Department of Commerce in efforts to discuss common goals with China, including the development

of secure and economically viable energy sources. The Chinese delegation gained insight into Chesapeakes operations in the Barnett Shale and visited drilling rigs, production facilities and state-of-the-art evaporative recycling units. This was the second visit from China in two years. In 2009, Chesapeake hosted a similar tour of its operations for the China National Petroleum Corporation.

which Chesapeake sponsored at the Gaylord Convention Center in Grapevine.

in the U.S., McClendon said. Discussions have gone from the U.S.

As an added educational bene t for the gathering, Chesapeake offered tours of its drilling rigs and production facilities, and 120 attendees eagerly signed on.

being short on energy to being long on energy, from gas being scarce to gas being abundant, he added. McClendon also told the global audience

Guests at the world conference heard about early accomplishments in the

that natural gas is setting the stage for an American industrial renaissance as businesses capitalize on lower energy costs. He added that as natural gas leads to a cleaner environment and greater economic growth in the U.S., the rest of the world is taking notice.

North Texans have found a new reason to be proud. The areas vast natural resources of natural gas are now bringing benefits that

THE FUTURE IS NOW

many could not have even dreamed of a few years ago. The stage is set for an improved quality of life for generations to come.
Later in 2010, learning more about Chesapeakes work in the Barnett Shale was a top item on the agenda for several key members of Moroccos National Of ce of Hydrocarbons and Mines. The countrys visit with U.S. of cials was part of the U.S. Department of States Global Shale Gas Initiative. The program highlights the importance of shale gas as a fuel option that can help reduce CO2 emissions, while also ensuring energy security and economic development for the future. When the U.S. Department of State was looking for a good example of drilling operations for the delegation to witness, they turned to Chesapeake. The Barnett Shale gained exposure from a diverse global audience in November when it hosted 400 delegates from 30 nations for the annual World Shale Gas Conference, Our success in the Barnett Shale has transformed the discussion about energy McClendon emphasized that natural gas production in the U.S. lessens our countrys dependence on imported oil, for which we spend more than $1 billion per day. Within three years of the industrys acceptance of that fact in 2005, all of the major unconventional gas shales were found in the United States. Barnett Shale from Chesapeake CEO Aubrey McClendon, who was a featured speaker. McClendons remarks gave guests an inside look at what has made the Barnett Shale and natural gas production a success, and presented them with a promising look at the future.

It can be an empowering opportunity for other countries around the world to embrace what we are doing here in the U.S., said McClendon. No longer do countries have to limit their choices to expensive imported oil and high-carbon coal. "Gas will fully be in the marketplace as a very powerful, affordable and clean competitor to those more high-carbon fuels, he said. McClendon called the liquefaction of natural gas for transportation fuel the Holy Grail for the natural gas industry and the U.S. The liquefaction process converts natural gas from a gaseous state to a liquid form. He predicted that technology for the process will be perfected and practical by the middle of this decade and will lead to natural gas exports and an economic breakthrough for the industry, while also signi cantly reducing Americas dependence on oil imports. Thats good news for North Texans. Together, we will continue to bene t from the success of our own Barnett Shale, which is truly coveted around the world.

LEADING BY EXAMPLE
The Barnett Shale was the rst gas shale that the industry broadly acknowledged would work commercially, McClendon said.

CHESAPEAKE ENERGY CORP. 100 Energy Way Fort Worth, TX 76102

In the process of bringing all the benefits of natural gas to the surface, Chesapeake is dedicated to improving the quality of life for North Texans.

View this publication online at AskChesapeake.com/Barnett