8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 31, 2019

CHESAPEAKE ENERGY CORPORATION
(Exact name of Registrant as specified in its Charter)
Oklahoma		1-13726	73-1395733
(State or other jurisdiction of incorporation)		(Commission File No.)	(IRS Employer Identification No.)
6100 North Western Avenue, Oklahoma City, Oklahoma			73118
(Address of principal executive offices)			(Zip Code)
	(405) 848-8000
	(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
	Emerging growth company	o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.		o

Explanatory Note

As previously disclosed in the Current Report on Form 8-K filed by Chesapeake Energy Corporation (“Chesapeake”) on February 1, 2019 (the “Initial Form 8-K”), on February 1, 2019, Coleburn Inc., a Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of Chesapeake, completed its previously announced merger with WildHorse Resource Development Corporation, a Delaware corporation (“WildHorse”), pursuant to the Agreement and Plan of Merger, dated as of October 29, 2018, as amended (the “Merger Agreement”), among Chesapeake, Merger Sub and WildHorse. Pursuant to the Merger Agreement, Merger Sub merged with and into WildHorse (the “First Merger”), with WildHorse continuing as the surviving corporation. Immediately following the effective time of the First Merger, WildHorse merged with and into Brazos Valley Longhorn, L.L.C., a wholly owned limited liability company subsidiary of Chesapeake (“BVL”) (the “Second Merger” and, together with the First Merger, the “Merger”), with BVL continuing as a wholly owned subsidiary of Chesapeake (the “Surviving Company”). For ease of reference, we use the term “WildHorse” to refer to both WildHorse Resource Development Corporation prior to the Merger and Brazos Valley Longhorn, L.L.C. after the Merger, as applicable.

This Amendment No. 1 to the Initial Form 8-K amends the Initial Form 8-K to include the financial statements required by Item 9.01(a) and the pro forma financial information required by Item 9.01(b) and certain other information. Except as provided herein, the disclosures made in the Initial Form 8-K remain unchanged.

Item 8.01. Other Events.

Below is a summary of certain information regarding the assets of WildHorse as of December 31, 2018.

WildHorse Operations

WildHorse is engaged in the acquisition, exploration, development and production of oil, natural gas and natural gas liquid ("NGL") resources. Its assets are characterized by concentrated acreage positions in Southeast Texas with multiple producing stratigraphic horizons, or stacked pay zones, and attractive single-well rates of return. WildHorse primarily operates in Burleson, Lee and Washington Counties where it primarily targets the Eagle Ford Shale and the Austin Chalk Trend.

Reserve Data

Preparation of Reserve Estimates

WildHorse’s reserve estimates as of December 31, 2018 included in this report are based on evaluations prepared by Cawley, Gillespie and Associates, Inc. (“CG&A”), a third-party engineering firm in accordance with Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Evaluation Engineers and definitions and guidelines established by the SEC.

Internal Controls

WildHorse maintains adequate and effective internal controls over the reserve estimation process as well as the underlying data upon which reserve estimates are based. WildHorse’s internal staff of petroleum engineers and geoscience professionals works closely with CG&A reserve engineers to ensure the integrity, accuracy and timeliness of data furnished to CG&A. Periodically, WildHorse’s technical team meets with the CG&A reserve engineers to review properties and discuss methods and assumptions used by WildHorse to prepare reserve estimates.

Reserve engineering is and must be recognized as a subjective process of estimating volumes of economically recoverable oil and natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation. As a result, the estimates of different engineers often vary. In addition, the results of drilling, testing and production may justify revisions of such estimates. Accordingly, reserve estimates often differ from the quantities of oil, natural gas and NGLs that are ultimately recovered. Estimates of economically recoverable oil, natural gas and NGLs and of future net revenues are based on a number of variables and assumptions, all of which may vary from actual results, including geologic interpretation, prices

and future production rates and costs. Please read “Item 1A. Risk Factors” appearing in Chesapeake’s Annual Report on Form 10-K.

For the year ended December 31, 2018, WildHorse’s reserve estimates and related reports were prepared by CG&A and reviewed by WildHorse’s Corporate Reserves Department and approved by our Director - Corporate Reserves who is the technical person primarily responsible for overseeing the preparation of WildHorse’s reserve estimates and for coordinating any reserves work conducted by a third-party engineering firm.

Estimated Proved Reserves

The following table presents the estimated net proved oil and natural gas reserves as of December 31, 2018, based on WildHorse’s audited reserve report.

	Oil (MBbls)	Natural Gas (MMcf)	NGLs (MBbls)	Total (MBoe)(1)
Total Proved Developed	66,398	88,936	14,135	95,356
Total Proved Undeveloped	218,868	289,237	43,620	310,694
Total Proved Reserves	285,266	378,173	57,755	406,050
(1) One barrel of oil equivalent, calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil. This ratio reflects an energy content equivalency and not a price or revenue equivalency. Despite holding this ratio constant at six mcf to one bbl, prices have historically often been higher or substantially higher for oil than natural gas on an energy equivalent basis, although there have been periods in which they have been lower or substantially lower.

Production, Revenue and Price History

The following tables summarize WildHorse’s average net production, average unhedged sales prices by product and average production costs by geographic region for the years ended December 31, 2018, 2017 and 2016, respectively:

	Year Ended December 31, 2018
	Oil			Natural Gas			NGLs			Total
	Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Lease Operating Expense
	(MBbls)	($/Bbl)		(MMcf)	($/Mcf)		(MBbls)	($/Bbl)		(MBoe)	($/MBoe)		($/MBoe)
Eagle Ford Shale	12,559	$	67.02	15,117	$	2.57	2,132	$	19.53	17,210	$	53.58	$	3.38
North Louisiana	26	$	61.93	6,414	$	3.31	11	$	30.84	1,106	$	20.97	$	3.13
Total	12,585			21,531			2,143			18,316			$	3.36
Average net production (MBoe/d)										50.2

	Year Ended December 31, 2017
	Oil			Natural Gas			NGLs			Total
	Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Lease Operating Expense
	(MBbls)	($/Bbl)		(MMcf)	($/Mcf)		(MBbls)	($/Bbl)		(MBoe)	($/MBoe)		($/MBoe)
Eagle Ford Shale	6,541	$	51.94	5,275	$	2.60	1,158	$	18.93	8,578	$	43.76	$	3.70
North Louisiana	65	$	48.05	15,188	$	3.04	48	$	21.74	2,644	$	19.05	$	3.03
Total	6,606			20,463			1,206			11,222			$	3.54
Average net production (MBoe/d)										30.7

	Year Ended December 31, 2016
	Oil			Natural Gas			NGLs			Total
	Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Production Volumes	Average Sales Price		Lease Operating Expense
	(MBbls)	($/Bbl)		(MMcf)	($/Mcf)		(MBbls)	($/Bbl)		(MBoe)	($/MBoe)		($/MBoe)
Eagle Ford Shale	1,765	$	41.21	1,750	$	2.20	404	$	11.74	2,461	$	33.05	$	2.42
North Louisiana(1)	83	$	38.70	16,070	$	2.47	67	$	15.54	2,828	$	15.52	$	2.25
Total	1,848			17,820			471			5,289			$	2.33
Average net production (MBoe/d)										14.5
(1) On February 12, 2018, WildHorse entered into a Purchase and Sale Agreement with Tanos for the sale of all of its producing and non-producing oil and natural gas properties, including Oakfield, primarily located in Webster, Claiborne, Lincoln, Jackson and Ouachita Parishes, Louisiana (“NLA Assets”). On March 29, 2018, WildHorse completed the sale of the NLA Assets for a total net sales price of approximately $206.4 million, including final purchase price adjustments of $4.8 million.

Reconciliation of PV‑10 to Standardized Measure

PV‑10 is a non-GAAP financial measure and differs from the Standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure. PV‑10 is a computation of the Standardized Measure of discounted future net cash flows on a pre-tax basis. PV‑10 is equal to the Standardized measure of discounted future net cash flows at the applicable date, before deducting future income taxes, discounted at 10 percent. WildHorse believes that the presentation of PV‑10 is relevant and useful to investors because it presents the discounted future net cash flows attributable to WildHorse’s estimated net proved reserves prior to taking into account future corporate income taxes, and it is a useful measure for evaluating the relative monetary significance of its oil and natural gas properties. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies without regard to the specific tax characteristics of such entities. WildHorse uses this measure when assessing the potential return on investment related to its oil and natural gas properties. PV‑10, however, is not a substitute for the Standardized measure of discounted future net cash flows. WildHorse’s PV‑10 measure and the Standardized measure of discounted future net cash flows do not purport to represent the fair value of WildHorse’s oil and natural gas reserves.

The following table provides a reconciliation of PV‑10 of WildHorse’s proved reserves to the Standardized measure of discounted future net cash flows at December 31, 2018, 2017 and 2016:

	At December 31,
	2018			2017			2016
	(in thousands)
PV-10	$	5,089,918		$	3,539,337		$	749,988
Less: present value of future income taxes discounted at 10%	(972,482		)	(695,432		)	(206,947		)
Standardized measure	$	4,117,436		$	2,843,905		$	543,041

Productive Wells

Productive wells consist of producing wells and wells capable of production, including natural gas wells awaiting pipeline connections to commence deliveries and oil wells awaiting connection to production facilities. Gross wells are the total number of producing wells in which WildHorse owns an interest, and net wells are the sum of WildHorse’s fractional working interests owned in gross wells. The following table sets forth information relating to the productive wells in which we owned a working interest as of December 31, 2018.

	Oil			Natural Gas
	Gross Wells	Net Wells	Average Working Interest	Gross Wells	Net Wells	Average Working Interest
Eagle Ford Acreage
Operated	942.0	901.7	95.7%	53.0	48.0	90.6%
Non-operated	212.0	30.9	14.6%	30.0	6.3	21.0%
Total	1,154.0	932.6	80.8%	83.0	54.3	65.4%

Acreage

The following table sets forth certain information regarding the total developed and undeveloped acreage in which WildHorse owned an interest as of December 31, 2018.

	Developed Acres		Undeveloped Acres		Total Acres
Region	Gross	Net	Gross	Net	Gross	Net
Eagle Ford Acreage	33,106	28,066	438,141	297,605	471,247	325,671

Approximately 74% of WildHorse’s net Eagle Ford Acreage was held by production at December 31, 2018.

Undeveloped Acreage Expirations

The following table sets forth the number of total net undeveloped acres as of December 31, 2018 across WildHorse’s Eagle Ford Acreage that will expire in 2019, 2020, 2021, 2022 and 2023, unless production is established within the spacing units covering the acreage prior to the expiration dates or unless such leasehold rights are extended or renewed.

Region	2019	2020	2021	2022	2023
Eagle Ford Acreage	31,031	27,616	12,434	552	20

WildHorse intends to extend substantially all of the net acreage associated with its drilling locations through a combination of development drilling and leasehold extension and renewal payments.

Drilling Activities

The following table summarizes our approximate gross and net interest in wells completed during the periods indicated (including both operated and non-operated wells), regardless of when drilling was initiated. The information should not be considered indicative of future performance, nor should it be assumed that there is necessarily any correlation among the number of productive wells drilled, quantities of reserves found or economic value. A dry well is a well that proves to be incapable of producing either oil or gas in sufficient quantities to justify completion. A productive well is a well that is not a dry well. Completion refers to installation of permanent equipment for production of oil or gas, or, in the case of a dry well, to reporting to the appropriate authority that the well has been abandoned.

	Year Ended December 31,
	2018		2017		2016
	Gross	Net	Gross	Net	Gross	Net
Eagle Ford Acreage
Development wells:
Productive	99.00	94.16	85.00	83.99	20.00	16.06
Dry	—	—	—	—	—	—
Total development wells	99.00	94.16	85.00	83.99	20.00	16.06
Exploratory wells:
Productive	—	—	—	—	—	—
Dry	—	—	—	—	—	—
Total exploratory wells	—	—	—	—	—	—
Total	99.00	94.16	85.00	83.99	20.00	16.06

At December 31, 2018, 27.0 gross (25.9 net) wells (including wells temporarily suspended) were in the process of being drilled. WildHorse is currently running a four-rig program in its Eagle Ford Acreage, which it is utilizing on a well-to-well basis. WildHorse is not currently a party to any long-term drilling rig contracts.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited consolidated balance sheets of Brazos Valley Longhorn, L.L.C. (successor in interest to WildHorse Resource Development Corporation) and subsidiaries as of December 31, 2018 and 2017, the related consolidated and combined statements of operations, cash flows, and changes in equity for each of the years in the three‑year period ended December 31, 2018, and the related notes, together with the report thereon of KPMG LLP included in the audited consolidated financial statements of Brazos Valley Longhorn, L.L.C. (successor in interest to WildHorse Resource Development Corporation) as of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018 are filed as Exhibit 99.1 hereto are incorporated herein by reference.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined financial statements of Chesapeake for the year ended December 31, 2018 and the notes related thereto filed as Exhibit 99.2 hereto are incorporated herein by reference.

(c) Exhibits.

Exhibit No.	Document Description
23.1	Consent of KPMG LLP, an independent registered public accounting firm.
23.2	Consent of Cawley, Gillespie and Associates, Inc.
99.1	Audited consolidated balance sheets of Brazos Valley Longhorn, L.L.C. (successor in interest to WildHorse Resource Development Corporation) and subsidiaries as of December 31, 2018 and 2017, the related consolidated and combined statements of operations, cash flows, and changes in equity for each of the years in the three‑year period ended December 31, 2018, and the related notes, together with the report thereon of KPMG LLP included in the audited consolidated financial statements of Brazos Valley Longhorn, L.L.C. (successor in interest to WildHorse Resource Development Corporation) as of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018 (incorporated by reference to Item 8 to Brazos Valley Longhorn, L.L.C.’s (successor in interest to WildHorse Resource Development Corporation) Annual Report on Form 10-K for the year ended December 31, 2018).
99.2	Unaudited Pro Forma Condensed Consolidated Financial Information as of and for the year ended December 31, 2018.
99.3	Report of Cawley, Gillespie and Associates, Inc. (incorporated by reference to Exhibit 99.1 to WildHorse's Annual Report on Form 10-K for the year ended December 31, 2018).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CHESAPEAKE ENERGY CORPORATION
By:	/s/ James R. Webb
	James R. Webb
	Executive Vice President - General Counsel and Corporate Secretary

Date: March 5, 2019

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Chesapeake Energy Corporation in its capacity as sole member of

Brazos Valley Longhorn, L.L.C.

(Successor in interest to WildHorse Resource Development Corporation):

We consent to the incorporation by reference in the registration statements on Form S-8 (File Nos. 333-126191, 333-135949, 333-143990, 333-151762, 333-160350, 333-171468, 333-178067, 333-187018, 333-189651, 333-192175, 333-196977 and 333-214683) and Form S-3 (File No. 333-219649) of Chesapeake Energy Corporation of our report dated March 4, 2019, with respect to the consolidated balance sheets of Brazos Valley Longhorn, L.L.C. (Successor in interest to WildHorse Resource Development Corporation) as of December 31, 2018 and 2017, the related consolidated and combined statements of operations, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2018, and the related notes (collectively, the consolidated and combined financial statements), which report appears in the Form 8‑K/A of Chesapeake Energy Corporation dated March 5, 2019.

As discussed in Note 1 to the consolidated and combined financial statements, the statements of operations, cash flows, and changes in equity for the periods from inception of common control (February 17, 2015) through the initial public offering (December 19, 2016), have been prepared on a combined basis of accounting.

/s/ KPMG LLP

Houston, Texas

March 5, 2019

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

We hereby consent to the inclusion in or incorporation by reference into the Registration Statements on Form S-8 (File Nos. 333-126191, 333-135949, 333-143990, 333-151762, 333-160350, 333-171468, 333-178067, 333-187018, 333-189651, 333-192175, 333-196977 and 333-214683) and Form S-3 (File No. 333-219649) (including any amendments or supplements thereto, related appendices, and financial statements) of Chesapeake Energy Corporation of our report, dated February 26, 2019, which report appears in the Form 8‑K/A of Chesapeake Energy Corporation dated March 5, 2019, with respect to our audit of estimates of proved reserves and future net revenues as of December 31, 2018 for Brazos Valley Longhorn, L.L.C. We also hereby consent to all references to our firm or such reports included in or incorporated by reference into such Registration Statement.

Very truly yours,

/s/ W. Todd Brooker

W. Todd Brooker, P. E.

President

Cawley, Gillespie & Associates, Inc.

Texas Registered Engineering Firm F-693

Austin, Texas

March 5, 2019

EX-99.2

EXHIBIT 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On October 29, 2018, Chesapeake Energy Corporation (“Chesapeake”), Coleburn Inc., a Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of Chesapeake, and WildHorse Resource Development Corporation, a Delaware corporation (“WildHorse”), entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”). On February 1, 2019, Merger Sub completed the merger with WildHorse pursuant to the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub merged with and into WildHorse (the “First Merger”), with WildHorse continuing as the surviving corporation. Immediately following the effective time of the First Merger, WildHorse merged with and into Brazos Valley Longhorn, L.L.C., a wholly owned limited liability company subsidiary of Chesapeake (“BVL”) (the “Second Merger” and, together with the First Merger, the “Merger”), with BVL continuing as a wholly owned subsidiary of Chesapeake. Under the terms and conditions contained in the Merger Agreement, and upon the completion of the Merger, holders of shares of WildHorse common stock, at their election, received either 5.989 shares of Chesapeake common stock or a combination of 5.336 shares of Chesapeake common stock and $3.00 in cash, in exchange for each share of WildHorse common stock.

The following unaudited pro forma condensed combined financial statements present the combination of the historical consolidated financial statements of each of Chesapeake and WildHorse adjusted to give effect to the Merger. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2018 combine the historical condensed consolidated statements of operations of each of Chesapeake and WildHorse, giving effect to the Merger as if it had been consummated on January 1, 2018, the beginning of the earliest period presented. The unaudited pro forma condensed combined balance sheet combines the historical consolidated balance sheets of each of Chesapeake and WildHorse as of December 31, 2018, giving effect to the Merger as if it had been consummated on December 31, 2018. The historical condensed consolidated financial statements of WildHorse have been adjusted to reflect certain reclassifications to conform to Chesapeake’s financial statement presentation.

The unaudited condensed combined pro forma financial statements reflect the following pro forma adjustments, based on available information and certain assumptions that Chesapeake believes are reasonable:

• the Merger, which will be accounted for using the acquisition method of accounting, with Chesapeake identified as the accounting acquirer;

• the conversion of 435,000 shares of WildHorse’s 6.00% Series A Perpetual Convertible Preferred Stock into 32,402,059 shares of WildHorse common stock prior to the effective time of the Merger;

• adjustments to conform the classification of expenses in WildHorse’s historical statements of operations to Chesapeake’s classification for similar expenses;

• adjustments to conform the classification of certain assets and liabilities in WildHorse’s historical balance sheet to Chesapeake’s classification for similar assets and liabilities;

• the assumption of liabilities by Chesapeake for any transaction-related expenses; and

• the estimated tax impact of pro forma adjustments.

 As of the date of this report, Chesapeake has not completed the detailed valuation study necessary to arrive at the required final estimates of the fair value of the acquired WildHorse assets and assumed liabilities and the related allocations of purchase price. A final determination of the fair value of WildHorse’s assets and liabilities, including, potentially, intangible assets with indefinite and/or finite lives, will be based on the actual net tangible and intangible assets and liabilities of WildHorse that existed as of the closing date of the Merger. As a result of the foregoing, the pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analysis is performed. The preliminary pro forma adjustments have been made solely for the purpose of providing the unaudited pro forma condensed combined financial statements presented below. Chesapeake estimated the fair value of WildHorse’s assets and liabilities based on discussions with WildHorse’s management, preliminary valuation studies, due diligence and information presented in WildHorse’s SEC filings. Any increases or decreases in the fair value of assets acquired and liabilities assumed upon completion of the final valuations will result in adjustments to the unaudited pro forma condensed combined balance sheet and/or unaudited pro forma condensed combined statements of operations. The final purchase price allocation may be materially different than that reflected in the unaudited pro forma purchase price allocation presented herein.

Assumptions and estimates underlying the adjustments to the unaudited pro forma condensed combined financial statements (which we refer to as the pro forma adjustments) are described in the accompanying notes to unaudited pro forma combined financial information. The historical financial statements of each of Chesapeake and WildHorse have been adjusted in the unaudited pro forma condensed combined financial statements to give effect to the transactions that are directly attributable to the Merger, are factually supportable and, with respect to the unaudited pro forma condensed combined statements of operations, expected to

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

have a continuing impact on the combined results of Chesapeake and WildHorse following the Merger. The unaudited pro forma condensed combined financial statements are not necessarily indicative of the operating results and financial position that would have been achieved had the Merger occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial statements do not purport to project the future operating results or financial position of the combined company following the Merger.

The unaudited pro forma condensed combined financial statements, although helpful in illustrating the financial characteristics of the combined company under one set of assumptions, do not reflect the benefits of expected cost savings (or associated costs to achieve such savings), opportunities to earn additional revenue or other factors that may result as a consequence of the Merger and, accordingly, do not attempt to predict or suggest future results. The unaudited pro forma condensed combined statements of operations also exclude the effects of transaction costs associated with the Merger, costs associated with any restructuring actions, integration activities or asset dispositions resulting from the Merger, which to the extent they occur, are expected to be non-recurring and were not incurred at the closing date of the Merger. However, such costs could affect the combined company following the Merger in the period the costs are incurred or recorded. Further, the unaudited pro forma condensed combined financial statements do not reflect the effect of any regulatory actions that may impact the results of the combined company following the Merger.

The unaudited pro forma condensed combined financial statements have been developed from and should be read in conjunction with: 

• the accompanying notes to the unaudited pro forma condensed combined financial statements;

• the historical audited consolidated financial statements of Chesapeake as of and for the year ended December 31, 2018, included in Chesapeake’s Annual Report on Form 10-K and incorporated by reference into this document;

• the historical audited consolidated financial statements of WildHorse as of and for the year ended December 31, 2018, attached as Exhibit 99.1 to this Form 8-K/A incorporated by reference into this document; and

• the factors described in the section entitled “Risk Factors” in Item 1A of Chesapeake’s Annual Report on Form 10-K for the period ended December 31, 2018.

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

DECEMBER 31, 2018

(IN MILLIONS)

	Chesapeake Historical			WildHorse Historical			Reclass Adjustments				Pro Forma Adjustments				Chesapeake Pro Forma Combined
CURRENT ASSETS:
Cash and cash equivalents	$	4		$	15		$	—			$	(4	)	(b)	$	15
Accounts receivable, net	1,247			92											1,339
Short-term derivative assets	209			54											263
Other current assets	138			8											146
Total Current Assets	1,598			169			—				(4		)		1,763
PROPERTY AND EQUIPMENT:
Oil and natural gas properties, at cost based on full cost accounting:
Proved oil and natural gas properties	69,642			—			2,764			(a)	444			(c)	72,332
											(518		)	(d)
Unproved properties	2,337			—			694			(a)	456			(c)	3,487
Other property and equipment	1,721			—			107			(a)					1,828
Total Property and Equipment, at Cost	73,700			—			3,565				382				77,647
Less: accumulated depreciation, depletion and amortization	(64,685		)	—			(518		)	(a)	518			(d)	(64,685		)
Property and equipment held for sale, net	15			—											15
Total Property and Equipment, Net	9,030			—			3,047				900				12,977
Oil and natural gas properties, at cost based on successful efforts accounting:
Oil and gas properties	—			3,458			(3,458		)	(a)					—
Other property and equipment	—			107			(107		)	(a)					—
Accumulated depreciation, depletion and amortization	—			(518		)	518			(a)					—
Total Property and Equipment, Net	—			3,047			(3,047		)		—				—
LONG-TERM ASSETS:
Long-term derivative instruments	76			19											95
Debt issuance costs	—			3			(3		)	(a)					—
Other long-term assets	243			17			3			(a)	(3		)	(e)	260
TOTAL ASSETS	$	10,947		3,255			$	—			$	893			$	15,095

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

DECEMBER 31, 2018

(IN MILLIONS)

	Chesapeake Historical			WildHorse Historical		Reclass Adjustments			Pro Forma Adjustments				Chesapeake Pro Forma Combined
CURRENT LIABILITIES:
Accounts payable	$	763		$	76								$	839
Current maturities of long-term debt, net	381			—									381
Accrued interest	141			—									141
Short-term derivative liabilities	3			1									4
Accrued liabilities	—			125		(125	)	(a)					—
Other current liabilities	1,540			—		125		(a)	48			(f)	1,713
Total Current Liabilities	2,828			202		—			48				3,078
LONG-TERM LIABILITIES:
Long-term debt, net	7,341			1,191					377			(b)	8,926
									17			(g)
Deferred tax liabilities	—			113					(113		)	(c)	—
Asset retirement obligations, net of current portion	155			8									163
Other long-term liabilities	156			2									158
Total Long-Term Liabilities	7,652			1,314		—			281				9,247
Preferred stock	—			448					(448		)	(h)	—
EQUITY:
Stockholders’ Equity (Deficit):
Preferred stock	1,671			—									1,671
Common stock	9			1					(1		)	(h)	16
									7			(i)
Additional paid-in capital	14,378			1,153					(1,153		)	(h)	16,408
									2,030			(i)
Accumulated equity (deficit)	(15,660		)	137					(137		)	(h)	(15,394		)
									(48		)	(f)
									314			(c)
Accumulated other comprehensive loss	(23		)	—									(23		)
Less: treasury stock, at cost;	(31		)	—									(31		)
Total Stockholders’ Equity	344			1,291		—			1,012				2,647
Noncontrolling interests	123			—									123
Total Equity	467			1,291		—			1,012				2,770
TOTAL LIABILITIES AND EQUITY	$	10,947		$	3,255	—			$	893			$	15,095

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2018

(IN MILLIONS)

	Chesapeake Historical		WildHorse Historical			Reclass Adjustments				Pro Forma Adjustments				Chesapeake Pro Forma Combined
REVENUES:
Oil, natural gas and NGL	$	5,155	$	—		$	945		(a)	$	—			$	6,135
						35			(a)
Oil sales	—		843			(843		)	(a)					—
Natural gas sales	—		60			(60		)	(a)					—
NGL sales	—		42			(42		)	(a)					—
Marketing	5,076		—											5,076
Other income	—		2			(2		)	(a)					—
Total Revenues	10,231		947			33				—				11,211
OPERATING EXPENSES:
Oil, natural gas and NGL production	539		61											600
Oil, natural gas and NGL gathering, processing and transportation	1,398		10											1,408
Production taxes	124		52											176
Marketing	5,158		—											5,158
General and administrative	280		66			14			(a)					360
Incentive unit compensation expense	—		14			(14		)	(a)					—
Restructuring and other termination costs	38		—											38
Provision for legal contingencies, net	26		—											26
Depreciation, depletion and amortization	1,145		297							(297		)	(d)	1,394
										249			(j)
(Gain) loss on sale of oil and natural gas properties	578		(3		)					3			(p)	578
Impairments	53		214							(214		)	(k)	53
Exploration expense	—		23							(23		)	(l)	—
Other operating expense	10		1											11
Total Operating Expenses	9,349		735			—				(282		)		9,802
INCOME FROM OPERATIONS	882		212			33				282				1,409

CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2018

(IN MILLIONS)

	Chesapeake Historical			WildHorse Historical			Reclass Adjustments				Pro Forma Adjustments				Chesapeake Pro Forma Combined
OTHER INCOME (EXPENSE):
Interest expense	(487		)	(60		)									(547		)
Gain on derivative instruments	—			35			(35		)	(a)					—
Gains on investments	139			—											139
Gains on purchases or exchanges of debt	263			—											263
Other income (expense)	70			(1		)	2			(a)					71
Total Other Expense	(15		)	(26		)	(33		)		—				(74		)
INCOME BEFORE INCOME TAXES	867			186			—				282				1,335
Current income taxes	—			—			(1		)	(a)	1			(m)	—
Deferred income taxes	(10		)	—			41			(a)	(41		)	(m)	(10		)
Income tax expense	—			40			(40		)	(a)					—
Total Income Tax Expense (Benefit)	(10		)	40			—				(40		)		(10		)
NET INCOME	877			146			—				322				1,345
Net income attributable to noncontrolling interests	(4		)	—											(4		)
NET INCOME ATTRIBUTABLE TO CHESAPEAKE	873			146			—				322				1,341
Preferred stock dividends	(92		)	(29		)					29			(h)	(92		)
Earnings allocated to participating securities	(6		)	(30		)					30			(n)	(6		)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	775		$	87		$	—			$	381			$	1,243
EARNINGS PER COMMON SHARE:
Basic	$	0.85													$	0.76
Diluted	$	0.85													$	0.76
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in millions):
Basic	909										717			(o)	1,626
Diluted	909										717			(o)	1,626

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

1. Basis of Presentation

The unaudited pro forma condensed combined financial information has been derived from the historical consolidated financial statements of each of Chesapeake and WildHorse. Certain of WildHorse’s historical amounts have been reclassified to conform to Chesapeake’s financial statement presentation. The unaudited pro forma condensed combined balance sheet as of December 31, 2018 gives effect to the Merger as if the Merger had been completed on December 31, 2018. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2018 gives effect to the Merger as if the Merger had been completed on January 1, 2018.

The unaudited pro forma condensed combined financial statements reflect pro forma adjustments that are described in the accompanying notes and are based on available information and certain assumptions that Chesapeake believes are reasonable; however, actual results may differ from those reflected in these unaudited pro forma condensed financial statements. In Chesapeake’s opinion, all adjustments that are necessary to present fairly the pro forma information have been made. The following unaudited pro forma condensed combined financial statements do not purport to represent what the combined company’s financial position or results of operations would have been if the Merger had actually occurred on the dates indicated above, nor are they indicative of Chesapeake’s future financial position or results of operations. These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and related notes thereto of each of Chesapeake and WildHorse for the periods presented.

2.    Unaudited Pro Forma Condensed Combined Balance Sheet

The Merger will be accounted for using the acquisition method of accounting for business combinations. The allocation of the preliminary estimated purchase price is based upon Chesapeake’s estimates of, and assumptions related to, the fair value of assets to be acquired and liabilities to be assumed as of December 31, 2018 using currently available information. Due to the fact that the unaudited pro forma condensed combined financial statements have been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on financial position and results of operations of the combined companies may be materially different from the pro forma amounts included herein. Chesapeake expects to finalize the purchase price allocation as soon as practicable.

The preliminary purchase price allocation is subject to change due to several factors, including, but not limited to:

• changes in the estimated fair value of WildHorse’s assets acquired and liabilities assumed as of the closing date of the Merger, which could result from the finalization of valuation procedures and the related assumptions, including interest rates and other factors;

• the tax bases of WildHorse’s assets and liabilities as of the closing date of the Merger; and

• the factors described in the section entitled “Risk Factors” in Item 1A of Chesapeake’s Annual Report on Form 10-K for the period ended December 31, 2018.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The preliminary fair value assessment of the assets acquired and liabilities assumed expected to be recorded is as follows:

	Preliminary Purchase Price Allocation
	(in millions)
Consideration:
Cash	$	381
Fair value of Chesapeake’s common stock issued in the Merger (a)	2,037
Total consideration	$	2,418
Fair Value of Liabilities Assumed:
Current liabilities	$	202
Long-term debt	1,208
Deferred tax liabilities	314
Other long-term liabilities	10
Amounts attributable to liabilities assumed	$	1,734
Fair Value of Assets Acquired:
Cash and cash equivalents	$	15
Other current assets	154
Proved oil and natural gas properties	2,690
Unproved properties	1,150
Other property and equipment	107
Other long-term assets	36
Amounts attributable to assets acquired	$	4,152
Total identifiable net assets	$	2,418

___________________________________________

(a) Based on 717,376,170 Chesapeake common shares issued at closing of the Merger at $2.84 per share (closing price as of February 1, 2019).

As a result of the Merger, each eligible share of WildHorse common stock issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive either 5.989 shares of Chesapeake common stock or a combination of 5.336 shares of Chesapeake common stock and $3.00 in cash. 6,609,445 WildHorse stockholders elected to receive 5.989 shares of Chesapeake common stock, and 127,022,527 WildHorse stockholders elected the combination of 5.336 shares of common stock and $3.00 cash, resulting in total cash consideration paid of $381 million and total fair value of Chesapeake stock issued of $2.037 billion.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

3. Pro Forma Adjustments

The Chesapeake historical balance sheet and statements of operations as of and for the year ended December 31, 2018 are derived from the audited consolidated financial statements included within Chesapeake’s Annual Report on Form 10-K for the period ended December 31, 2018. The WildHorse historical balance sheet and statement of operations as of and for the year ended December 31, 2018 are derived from WildHorse’s audited consolidated and combined financial statements for the period ended December 31, 2018 incorporated by reference as exhibit 99.1 herein.

The following adjustments have been made to the accompanying unaudited pro forma condensed combined financial statements:

(a) The following reclassifications were made as a result of the transaction to conform to Chesapeake’s financial statement presentation:

Pro Forma Condensed Combined Balance Sheet as of December 31, 2018

• Reclassification of approximately $3.5 billion from oil and gas properties under the successful efforts method of accounting to proved oil and natural gas properties and unproved properties under the full cost method of accounting.

• Reclassification of approximately $107 million between other property and equipment, as comprised within WildHorse’s total property and equipment, and other property and equipment to conform WildHorse’s presentation to Chesapeake’s presentation.

• Reclassification of approximately $518 million from accumulated depreciation, depletion and amortization under the successful efforts method of accounting to accumulated depreciation, depletion and amortization under the full cost method of accounting.

• Reclassification of approximately $3 million between debt issuance costs and other long-term assets to conform WildHorse’s presentation to Chesapeake’s presentation.

• Reclassification of approximately $125 million between accrued liabilities and other current liabilities to conform WildHorse’s presentation to Chesapeake’s presentation.

Pro Forma Condensed Combined Statement of Operations for the Year Ended December 31, 2018

• Reclassification of approximately $843 million, $60 million and $42 million of WildHorse’s disaggregated oil, natural gas and natural gas liquid (“NGL”) sales to conform to Chesapeake’s presentation of oil, natural gas and NGL revenues.

• Reclassification of approximately $35 million for WildHorse’s gain on derivatives from other expense to conform to Chesapeake’s presentation of oil, natural gas and NGL revenues.

• Reclassification of approximately $14 million for WildHorse’s incentive unit compensation to conform to Chesapeake’s presentation of general and administrative expense.

• Reclassification of approximately $2 million for WildHorse’s other income to conform to Chesapeake’s presentation of other income.

• Reclassification of approximately $40 million for WildHorse’s income tax expense to conform to Chesapeake’s presentation for current income taxes and deferred income taxes.

(b) Reflects the cash consideration resulting from the stockholder election to receive $3.00 in cash for each share of WildHorse common stock. The cash consideration was funded through cash on hand and borrowings under Chesapeake’s revolving credit facility. For purposes of the unaudited pro forma condensed combined financial statements, Chesapeake has assumed that (i) the outstanding balance of the WildHorse revolving credit facility and (ii) the WildHorse senior notes remained outstanding at the closing of the Merger. 

(c) The allocation of the estimated fair value of consideration transferred (based on the closing price of Chesapeake common shares as of February 1, 2019 and, for WildHorse stockholders electing to receive mixed consideration, $3.00 in cash for each share of WildHorse common stock) to the estimated fair value of the assets acquired and liabilities assumed resulted in the following purchase price allocation adjustments:

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

• Approximately $444 million increase in WildHorse’s net book basis of proved oil and natural gas properties and $456 million increase in WildHorse’s unproved oil and natural gas properties to reflect each at fair value.

• Approximately $314 million of net deferred tax liabilities associated with the transaction. The primary deferred tax liability recorded is associated with the difference between the purchase price allocated to WildHorse’s assets and the carryover tax basis of such assets. The increase in deferred tax liabilities is completely offset by a decrease in the valuation allowance that Chesapeake maintains against its net deferred tax asset. Accordingly, this results in no deferred tax balance for the combined company.

(d) Adjustment to eliminate WildHorse’s historical depreciation, depreciation and amortization.

(e) Adjustment to eliminate debt issuance costs related to WildHorse’s credit facility.

(f) Reflects the estimated transaction costs of $48 million related to the merger, including underwriting, banking, legal and accounting fees that are not capitalized as part of the transaction. These costs are not reflected in the historical December 31, 2018 condensed consolidated balance sheets of each of Chesapeake and WildHorse, but are reflected in the pro forma unaudited condensed consolidated balance sheet as an increase to other current liabilities as they will be expensed by Chesapeake and WildHorse as incurred. These amounts and their corresponding tax effect have not been reflected in the pro forma condensed combined statements of operations due to their nonrecurring nature.

(g) The following adjustments were made to reflect the pro forma increases to Long-term debt:

• Approximately $4 million to WildHorse’s senior notes to record them at fair value;

• Approximately $12 million to eliminate the debt issuance costs related to WildHorse’s senior notes; and

• Approximately $1 million to eliminate the discount on WildHorse’s senior notes.

(h) Reflects the elimination of WildHorse’s historical equity balances in accordance with the acquisition method of accounting.

(i) Reflects the estimated increase in Chesapeake’s common stock and additional paid-in capital resulting from the issuance of Chesapeake common shares to WildHorse’s stockholders to effect the transaction as follows (in millions, except share and per share amounts):

Shares of Chesapeake common stock to be issued	717,376,170
Closing price per share of Chesapeake common stock on February 1, 2019	$	2.84
Total fair value of shares of Chesapeake common stock to be issued	$	2,037
Increase in Chesapeake common stock ($0.01 par value per share) as of December 31, 2018	$	7
Increase in Chesapeake additional paid-in capital as of December 31, 2018	$	2,030

(j) Adjustment to record pro forma oil, natural gas and NGL related depletion in accordance with the full cost method of accounting.

(k) Adjustment to eliminate WildHorse’s impairment of its Louisiana assets which was recorded under the successful efforts method of accounting in accordance with the full cost method of accounting.

(l) Adjustment to eliminate WildHorse’s exploration expense which was recorded under the successful efforts method of accounting in accordance with the full cost method of accounting.

(m) Refer to (c) above regarding the net deferred tax liabilities associated with the transaction. No income tax benefit has been included in the pro forma statement of operations for the adjustment to the valuation allowance that Chesapeake maintains against its net deferred tax asset due to the nonrecurring nature of any such adjustment. Further, the deferred tax expense (benefit) amount recorded by WildHorse has been eliminated due to the valuation allowance.

(n) Adjustment to reflect the change in earnings allocated to participating securities. Participating securities consist of unvested restricted stock issued to Chesapeake’s employees and non-employee directors that provide dividend rights.

(o) Reflects Chesapeake common stock issued to WildHorse stockholders.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

(p) Adjustment to eliminate WildHorse’s gain on sale of properties which was recorded under the successful efforts method of accounting in accordance with the full cost method of accounting.

4. Supplemental Pro Forma Oil and Natural Gas Reserves Information

The following tables present the estimated pro forma net proved developed and undeveloped oil, natural gas and NGL reserves as of December 31, 2018, along with a summary of changes in the quantities of net remaining proved reserves during the year ended December 31, 2018. The pro forma reserve information set forth below gives effect to the merger as if the merger had been completed on January 1, 2018.

	Oil (mmbbls)
	Chesapeake Historical		WildHorse Historical		Chesapeake Pro Forma Combined
December 31, 2018
Proved reserves, beginning of period	260.2		282.8		543.0
Extensions, discoveries and other additions	56.3		81.2		137.5
Revisions of previous estimates	(30.5	)	(65.3	)	(95.8	)
Production	(32.7	)	(12.6	)	(45.3	)
Sale of reserves-in-place	(37.8	)	(1.3	)	(39.1	)
Purchase of reserves-in-place	—		0.5		0.5
Proved reserves, end of period	215.5		285.3		500.8
Proved developed reserves:
Beginning of period	150.9		65.0		215.9
End of period	127.6		66.4		194.0
Proved undeveloped reserves:
Beginning of period	109.3		217.8		327.1
End of period	87.9		218.9		306.8
	Natural Gas (bcf)
	Chesapeake Historical		WildHorse Historical		Chesapeake Pro Forma Combined
December 31, 2018
Proved reserves, beginning of period	8,600		684		9,284
Extensions, discoveries and other additions	1,162		130		1,292
Revisions of previous estimates	242		(22	)	220
Production	(832	)	(22	)	(854	)
Sale of reserves-in-place	(2,395	)	(393	)	(2,788	)
Purchase of reserves-in-place	—		1		1
Proved reserves, end of period	6,777		378		7,155
Proved developed reserves:
Beginning of period	4,980		222		5,202
End of period	3,314		89		3,403
Proved undeveloped reserves:
Beginning of period	3,620		462		4,082
End of period	3,463		289		3,752

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

	Natural Gas Liquids (mmbbls)
	Chesapeake Historical		WildHorse Historical		Chesapeake Pro Forma Combined
December 31, 2018
Proved reserves, beginning of period	218.6		57.5		276.1
Extensions, discoveries and other additions	19.8		16.4		36.2
Revisions of previous estimates	5.4		(13.7	)	(8.3	)
Production	(18.9	)	(2.1	)	(21.0	)
Sale of reserves-in-place	(121.6	)	(0.4	)	(122.0	)
Purchase of reserves-in-place	—		0.1		0.1
Proved reserves, end of period	103.3		57.8		161.1
Proved developed reserves:
Beginning of period	134.9		12.5		147.4
End of period	67.9		14.1		82.0
Proved undeveloped reserves:
Beginning of period	83.6		45.0		128.6
End of period	35.4		43.7		79.1
	Total Reserves (mmboe)
	Chesapeake Historical		WildHorse Historical		Chesapeake Pro Forma Combined
December 31, 2018
Proved reserves, beginning of period	1,912		454		2,366
Extensions, discoveries and other additions	270		119		389
Revisions of previous estimates	15		(83	)	(68	)
Production	(190	)	(18	)	(208	)
Sale of reserves-in-place	(559	)	(67	)	(626	)
Purchase of reserves-in-place	—		1		1
Proved reserves, end of period	1,448		406		1,854
Proved developed reserves:
Beginning of period	1,116		114		1,230
End of period	748		95		843
Proved undeveloped reserves:
Beginning of period	796		340		1,136
End of period	700		311		1,011

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The pro forma standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves as of December 31, 2018 is as follows:

	Year Ended December 31, 2018
	Chesapeake Historical			WildHorse Historical			Chesapeake Pro Forma Combined
	($ in millions)
Future cash inflows	$	27,312		$	21,269		$	48,581
Future production costs	(5,946		)	(3,440		)	(9,386		)
Future development costs	(4,032		)	(5,168		)	(9,200		)
Future income tax provisions	(331		)	(2,399		)	(2,730		)
Future net cash flows	17,003			10,262			27,265
Less effect of a 10% discount factor	(7,508		)	(6,145		)	(13,653		)
Standardized measure of discounted future net cash flows	$	9,495		$	4,117		$	13,612

The changes in the pro forma standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGL reserves for the year ended December 31, 2018 are as follows:

	Year Ended December 31, 2018
	Chesapeake Historical			WildHorse Historical			Chesapeake Pro Forma Combined
	($ in millions)
Standardized measure, beginning of period	$	7,490		$	2,844		$	10,334
Sales of oil and natural gas produced, net of production costs and gathering, processing and transportation	(3,128		)	(822		)	(3,950		)
Net changes in prices and production costs	3,317			1,380			4,697
Extensions and discoveries, net of production and development costs	1,666			1,829			3,495
Changes in estimated future development costs	1,113			(13		)	1,100
Previously estimated development costs incurred during the period	973			68			1,041
Revisions of previous quantity estimates	47			(1,058		)	(1,011		)
Purchase of reserves-in-place	—			4			4
Sales of reserves-in-place	(2,052		)	(320		)	(2,372		)
Accretion of discount	749			324			1,073
Net change in income taxes	(32		)	(277		)	(309		)
Changes in production rates and other	(648		)	158			(490		)
Standardized measure, end of period	$	9,495		$	4,117		$	13,612