Chesapeake Oil & Gas

Oil & Gas Business development Seminar II Mark A. Matusick Manager – Corporate Development Presented: June 15, 2012

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The production process with examples of economic impact (Utica) Delivering resources from the ground to market

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Economic impact (Utica) A Review of key definitions Key Industry Studies The Economic and Employment Contributions of Shale Gas in the United States

DEC, 2011

Ohio's Natural Gas & Crude Oil E&P Industry - Economic Impact Study

SEP, 2011

An Analysis of the Economic Potential for Shale Formations in Ohio

FEB, 2012

How is it measured Employment (Jobs)

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Categories & Stages 1

Direct (Core Industry)

Labor Income (Employee Wages)

Indirect (All other industries)

Value Added (Contribution to G.D.P.)

Induced (Spending of Employee Wages)

1 – iHS Global Insights – The Economic & Employment Contributions of Shale Gas in the United States

The production Process Delivering resources from the ground to market

Multiple Phases of Operation Process › › › › › › › › › ›

Leasing Site Planning & Preparation Rig Up & Drilling Completion Production Transportation Pipeline Site Development & Construction Compressor Stations & Oil Terminals Royalty Payments Reclamation

Process details, videos & animations can be found in our Educational Library located under media link at chk.com

The production Process Delivering resources from the ground to market

5 Key Stages of Production › Site Planning & Preparation › Rigging Up › Drilling › Completion − Aqua Renew › Production Process details, videos & animations can be found in our Educational Library located under media link at chk.com

The production Process Site planning & preparation

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The production Process Rig up & Drilling

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The production Process completions & aqua renew

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The Process Production

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Shale Gas Employment contribution to U.S. Workforce

“An Economic Growth Engine” iHS GLOBAL INSIGHT study “The Economic & Employment Contributions of Shale Gas in the United States, DEC, 2011

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Master Service agreement (MSA) The Chesapeake MSA process

What is an m.s.a.?

Master Service Agreement (M.S.A.) A Master Service Agreement (MSA) is a contract that states responsibilities and obligations of one party with another. An MSA may define rates, payment terms, services, responsibilities or other obligations for both parties. Chesapeake Energy requires most vendors to execute an MSA (coordinated by our Risk Management Department) prior to delivering products or services to our company or affiliates.

MSA’s are common in the industry. Prospective Vendors should become familiar with the concept and associated terminology

How can my company get an msa?

An operational need must be demonstrated!  Regardless of qualifications, vendors may not be approved unless there is an operational need to add a new vendor for their particular category.  A limited number of vendors may be approved for any particular product or service category.  Chesapeake maintains the highest EHS & Performance standards when choosing vendors. Products or services must be price competitive

Vendors are routinely evaluated on Environmental, Health & Safety (EHS) standards, performance , pricing and service related criteria

If an operational need exists 1. A Chesapeake Field Representative must specifically request or endorse any new vendor application submitted to CHK Risk Management Department (CRMD).

2. CRMD will confirm operational need with Regional / District Operations Manager.

3. CRMD will distribute MSA application & forms to vendor, request OSHA Logs & communicate ISNetworld ® requirements.

4. CHK Environmental Health & Safety (EHS) Department must evaluate and approve all new MSA applications.

5. CRMD will communicate final requirements and distribute MSA for vendor review & execution.

All insurance requirements set forth in the Master Service Agreement must be met before the MSA is executed and the vendor is placed on the Approved Vendors List. Including, but not limited to: General Liability - Automobile - Workers Compensation

All new vendor requests must follow these 5 steps and pass all associated Operations, EHS & Risk Management screening

What is ISNetworld® 3rd Party service commonly utilized by industry for the verification and assessment of Risk Management criteria Review and verification Service (RAVS) reviews and  – Training Documents – Written safety programs verifies: – Accident/Incident reports – EMR Certificates – Workers Comp Clearance Letters – Workers Comp Rate Sheets

– Insurance Certificates – Citation/Prosecution Search – Supplier Diversity Certificates

ISNetworld receives applicable third-party provider data: – Audits – Training – Operator Qualifications – Drug & Alcohol and Background Checks

ISNetworld.com for details

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How can I introduce my products or services to chk field employees?

1. Network at industry events 2. Register as a Prospective Vendor at AskChesapeake.com > Click on CONTACT US

Scroll down to the Utica Shale area & follow link

Registration as a PROSPECTIVE vendor does not imply that a contractual agreement is in place, nor does registration create an obligation for Chesapeake to procure services from your business. Your company's information will be placed in our prospective vendor database, which is frequently accessed by our sourcing teams to identify suppliers that could fulfill a current business need. A Chesapeake team member may contact you should such an opportunity become available

Questions?

For more information:

Information provided is subject to change based on multiple factors

© 2012 – Chesapeake Energy, All Rights Reserved.

This presentation is intended for the sole viewing of the specified audience an may not be shared or otherwise released publically (in part or in its entirety) without the express written permission of Chesapeake Energy.