1. Analyst: Jeremy Leach and JohnPaul Bennett Thursday, November 5 th, 2009

2. Overview  An oil and natural gas exploration and production company, engages in the acquisition, exploration, and development of properties for the production of crude oil and natural gas from underground reservoirs  Provides marketing and midstream services for natural gas and oil for other working interest owners in properties it operate  Only located in the United States, no global presence

3. S trengths W eaknesses O pportunities T hreats  Low operating costs  More development-focused with many core plays  Contracting more acreage deals  No global presence  Selling of ownership instead of relying on debt or equity to fund its growth  Recent discovery of shale fields and drilling fields  Returns will increase as firm increases its production  Subject to volatile commodity prices and an ever-changing regulatory environment (tax regulation)  Profits fluctuate with oil and gas prices  Spend too much for leasing acreage, unconventional strategy Sources: Yahoo Finance, Morningstar

4. Basic Info   Ticker: CHK   Sector: Energy   Current Price: $24.35   52-Week Range: $9.84– $30   Market Cap: $15.5B   Beta: 1.36 * Reuters & Morningstar

5. Time-Series Analysis * Morningstar 20012002200320042005200620072008TTM EBTMargin(%)45.29.129.229.73244.43010.2(34) ROA(%)11.561.177.86.857.229.394.461.8(9.06) ROE47.894.3929.9722.7924.2027.4212.014.62(29.37) Revenue Growth (%) 54.3(23.9)132.857.872.2576.549.1N/A EPS (49.8)(88.7)605.927.564.173.3(39.8)(56.5)N/A P/E4.445.511.310.812.66.71514.2-4.7 P/S1.21.821.92.21.82.50.81 P/B1.81.72.51.72.41.41.70.61.3

6. Cross-Sectional Analysis * Morningstar CHKIndustry S&P 500 5-YearAverage P/E-4.730.119.111.9 P/B1.31.92.11.5 P/S11.21.11.8 Dividend Yield (%) 1.20.82.2N/A

7. 1-Year VS S&P 500 w/ RSI * Yahoo Finance

8. 1-Year Chart w/ 100 and 200 – Day Moving Averages * Yahoo Finance

9. Intrinsic Value  Morningstar Fair Value Estimate: $46  Three-Stage DDM Calculated Fair Value: $6.22  Three-Stage FCFE Calculated Fair Value: $120.16  Average of Three-Stage Models: $63.19  With 15% Margin of Safety: $53.65 – $72.73  $24.35 < $53.65 = Suggests Undervalued

10. Headlines Earnings and revenue comparisons with the year-earlier period were quite weak, severely hampered by the slump in commodity prices – Zacks.com Since 1999, Chesapeake has grown by leaps and bounds, however, it will become increasingly difficult for the firm to expand at its historical rate as commodity prices are a large determinant of sales and profit growth as profits fluctuate with oil and gas prices – Morningstar Changing tax legislation in the U.S. could have a negative effect on future cash flows – Morningstar Moved from being an acquisitive company with many emerging plays to a company that is more development-focused with many core plays – Morningstar CEO Aubrey McClendon faced heat for his 2008 $112.5 million compensation package… making him the highest-paid CEO in the U.S., even though the stock fell 59% Chesapeake has been criticized for spending too heavily to lease acres – Reuters Changing tax legislation in the U.S. could have a negative effect on future cash flows

11. Discussion