Expand Energy (EXE) 10-K risk factor changes: FY2020 vs FY2019

The following is a description of [removed: significant] factors that [added: we consider to be material and that] might cause our future results to differ materially from those currently expected.

Our revenues, operating results, profitability, [removed: liquidity] [added: liquidity, leverage ratio] and ability to grow [added: and invest in capital expenditures] depend primarily upon the prices we receive for the oil, natural gas and NGL we sell.

[removed: | • |] [added: -] domestic and worldwide supplies of oil, natural gas and NGL, including U.S. inventories of oil and natural gas reserves; [removed: |]

[removed: | • |] [added: -] weather conditions; [removed: |]

[removed: | • |] [added: -] changes in the level of consumer and industrial demand, including impacts from global or national health epidemics and concerns, such as the recent coronavirus; [removed: |]

[removed: | • |] [added: -] the price and availability of alternative fuels; [removed: |]

[removed: | • |] [added: -] technological advances affecting energy consumption; [removed: |]

[removed: | • |] [added: -] the effectiveness of worldwide conservation measures; [removed: |]

[removed: | • |] [added: -] the availability, proximity and capacity of pipelines, other transportation facilities and processing facilities; [removed: |]

[removed: | • |] [added: -] the level and effect of trading in commodity futures markets, including by commodity price speculators and others; [removed: |]

[removed: | • |] [added: -] U.S. exports of oil, natural gas, liquefied natural gas and NGL; [removed: |]

[removed: | • |] [added: -] the price and level of foreign imports; [removed: |]

[removed: | • |] [added: -] the nature and extent of domestic and foreign governmental regulations and taxes; [removed: |]

[removed: | • |] [added: -] the ability of the members of the Organization of Petroleum Exporting Countries [added: (OPEC)] and others to agree to and maintain oil price and production controls; [removed: |]

[removed: | • |] [added: -] increased use of competing energy products, including alternative energy sources; [removed: |]

[removed: | • |] [added: -] political instability or armed conflict in oil and natural gas producing regions; [removed: |]

[removed: | • |] [added: -] acts of terrorism; and [removed: |]

[removed: | • |] [added: -] domestic and global economic conditions. [removed: |]

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

[removed: Any of] [added: If we are unable to access] the [removed: above listed factors] [added: capital and credit markets on favorable terms, it] could have a material adverse effect on our business, financial condition, [added: results of operations,] cash flows and [removed: results of operations.][added: liquidity and our ability to repay or refinance our]

We have significant capital needs, and our ability to access the capital and credit markets to raise capital on favorable terms is limited by [removed: our debt level and] industry conditions.

Low commodity prices have caused and may continue to cause lenders to increase the interest rates under [removed: our] [added: upstream operators’] credit facilities, enact tighter lending standards, refuse to refinance existing debt around maturity on favorable terms or at all and may reduce or cease to provide funding to borrowers.

[removed: Any cash flow insufficiency] [added: - any investment, acquisition, or disposition or integration] would [added: not] have a material adverse [removed: impact] [added: effect] on our [removed: business,] financial condition, results of operations, cash flows [removed: and liquidity and our ability to repay] or [removed: refinance our debt.][added: reserves.]

[removed: | • |] [added: -] incur additional indebtedness; [removed: |]

[removed: | • |] [added: -] make investments or loans; [removed: |]

[removed: | • |] [added: -] create liens; [removed: |]

[removed: | • |] [added: -] consummate mergers and similar fundamental changes; [removed: |]

[removed: | • |] [added: -] make restricted payments; [removed: |]

[removed: | • |] [added: -] make investments in unrestricted subsidiaries; [removed: |]

[removed: | • |] [added: -] enter into transactions with affiliates; and [removed: |]

[removed: | • |] [added: -] use the proceeds of asset sales. [removed: |]

[removed: | • |] [added: -] limit our ability to plan for, or react to, market conditions, to meet capital needs or otherwise to restrict our activities or business plan; and [removed: |]

[removed: | • |] [added: -] adversely affect our ability to finance our operations, enter into acquisitions or divestitures to engage in other business activities that would be in our interest. [removed: |]

Our forecasted [removed: 2020] [added: 2021] capital expenditures, inclusive of capitalized interest, are [removed: $1.3] [added: $670] - [removed: $1.6 billion] [added: $740 million] compared to our [removed: 2019] [added: 2020] capital spending level of [removed: $2.2 billion.][added: $920 million.]

Management continues to review operational plans for [removed: 2020] [added: 2021] and beyond, which could result in changes to projected capital expenditures and projected revenues from sales of oil, natural gas and NGL.

As of December 31, [removed: 2019,] [added: 2020,] approximately [removed: 46%] [added: 7%] of our estimated proved reserves (by volume) were undeveloped.

The December 31, [removed: 2019] [added: 2020] present value is based on a [removed: $55.69] [added: $39.57] per bbl of oil price and a [removed: $2.58] [added: $1.98] per mcf of natural gas price, before considering basis differential adjustments.

[added: Interest] rates in effect from time to time and the risks associated with our business or the oil and gas industry in general will affect the appropriateness of the 10% discount factor.

Drilling and completion operations may be curtailed, delayed or canceled as a result of unexpected drilling conditions, title problems, equipment failures or accidents, shortages of midstream transportation, equipment or personnel, environmental issues, state or local bans or moratoriums on hydraulic fracturing and produced water disposal, [added: federal restrictions on oil] and [added: gas leasing and permitting, and] a decline in commodity prices, among others.

Our decision to mitigate cash flow volatility through derivative arrangements, if any, is based in part on our view of current and future market conditions and our desire to stabilize cash flows necessary for the [removed: development of our proved reserves.]

Risks Related to our Emergence from Bankruptcy

We recently emerged from bankruptcy, which may adversely affect our business and relationships.

It is possible that our having filed for bankruptcy and our recent emergence from bankruptcy may adversely affect our business and relationships with customers, vendors, contractors or employees.

Due to uncertainties, many risks exist, including the following:

- key vendors or other contract counterparties may terminate their relationships with us or require additional financial assurances or enhanced performance from us;

- our ability to renew existing contracts and compete for new business may be adversely affected;

- our ability to attract, motivate and/or retain key executives may be adversely affected; and

- competitors may take business away from us, and our ability to attract and retain customers may be negatively impacted.

The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition and reputation.

We cannot assure you that having been subject to bankruptcy protection will not adversely affect our operations in the future.

Our actual financial results after emergence from bankruptcy may not be comparable to our historical financial information as a result of the implementation of the Plan and the transactions contemplated thereby.

In connection with the disclosure statement we filed with the Bankruptcy Court, and the hearing to consider confirmation of the Plan, we prepared projected financial information to demonstrate to the Bankruptcy Court the feasibility of the Plan and our ability to continue operations upon our emergence from bankruptcy.

Those projections were prepared solely for the purpose of bankruptcy proceedings and have not been, and will not be, updated on an ongoing basis and should not be relied upon by investors.

At the time they were prepared, the projections reflected numerous assumptions concerning our anticipated future performance with respect to prevailing and anticipated market and economic conditions that were and remain beyond our control and that may not materialize.

Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks and the assumptions underlying the projections and/or valuation estimates may prove to be wrong in material respects.

Actual results may vary significantly from those contemplated by the projections.

As a result, investors should not rely on these projections.

Upon emergence from bankruptcy, the composition of our board of directors changed significantly.

The composition of our board of directors changed significantly upon emergence from bankruptcy.

Our new board is comprised of the following members appointed by our new stockholders.

Robert D.

Lawler, Michael Wichterich, Timothy S.

Duncan, Benjamin C.

Duster, IV, Sarah Emerson, Matthew M.

Gallagher and Brian Steck.

While we expect to engage in an orderly transition process as we integrate newly appointed board members, our new board of directors may change views on strategic initiatives and a range of issues that will determine the future of the Company.

As a result, the future strategy and plans of the Company may differ materially from those of the past.

Risks Related to Operating Our Business

The ongoing coronavirus (COVID-19) pandemic and related economic turmoil have affected and could continue to adversely affect our business, financial condition, results of operations and cash flows.

The global spread of COVID-19 created significant volatility, uncertainty, and economic disruption during 2020.

The ongoing COVID-19 pandemic has reached more than 200 countries and has continued to be a rapidly evolving economic and public health situation.

The pandemic has adversely impacted the entire global economy, and there is considerable uncertainty regarding how long the pandemic and related market conditions will persist and the extent and duration of governmental and other measures implemented to try to slow the spread of the virus, such as quarantines, shelter-in-place orders and business and government shutdowns.

In certain cases, states that had begun taking steps to reopen their economies experienced a subsequent surge in cases of COVID-19, causing these states to cease such reopening measures in some cases and reinstitute restrictions in others.

We have taken

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

certain precautionary measures intended to help minimize the risk to our employees, our business and the communities in which we operate, and we are actively assessing and planning for various operational contingencies in the event one or more of our operational employees experiences any symptoms consistent with COVID-19.

However, we cannot guarantee that any actions taken by us will be effective in preventing future disruptions to our business.

Moreover, future operations could be negatively affected if a significant number of our employees are quarantined as a result of exposure to the virus.

In addition, actions by our customers and derivative contract counterparties in response to COVID-19 and its economic impacts may also have an adverse impact on our business.

We continue to regularly monitor the credit worthiness of such customers and derivative contract counterparties.

Historically, the markets for oil, natural gas and NGL have been volatile, and they are likely to continue to be volatile.

For example, during the period from January 1, 2014 to December 31, 2019, NYMEX WTI oil prices ranged from a high of $107.26 per bbl to a low of $26.21 per bbl and NYMEX Henry Hub natural gas prices ranged from a high of $6.15 per mmbtu to a low of $1.64 per mmbtu.

As of February 19, 2020, the NYMEX WTI oil price was $53.29 per bbl and the NYMEX Henry Hub natural gas price was $1.99 per mmbtu.

| | |

| --- | --- |

As of February 19, 2020, including January and February derivative contracts that have settled, approximately 70% of our 2020 forecasted oil, natural gas and NGL production revenue was hedged.

We had approximately 76% downside oil price protection through swaps and collars at an average price of $59.90 per bbl.

We

had 39% downside gas price protection through swaps at $2.76 per mcf and 14% under put spread arrangements based on an average bought put NYMEX price of $2.05 per mcf and exposure below an average sold put NYMEX price of $1.80 per mcf.

Even with oil, natural gas and NGL derivatives currently in place to mitigate price risks associated with a portion of our 2020 cash flows, we have substantial exposure to oil, natural gas and NGL prices in 2020 and 2021 and beyond.

We have a significant amount of indebtedness.

Our leverage and debt service obligations may adversely affect our financial condition, results of operations and business prospects, and we may have difficulty paying our debts as they become due.

As of December 31, 2019, we had approximately $8.916 billion in principal amount of debt outstanding (including $301 million of current maturities and $1.590 billion drawn under our senior secured revolving credit facility).

As of December 31, 2019, we had approximately $59 million of letters of credit issued and borrowing capacity of approximately $1.351 billion under our $3.0 billion senior secured revolving credit facility.

See [Note 5](#s5D137AEEA9A851B8B3C3DB703BCD831D) of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of our debt obligations, including debt maturities for the next five years and thereafter.

The level of and terms and conditions governing our debt:

| • | require us to dedicate a substantial portion of our cash flow from operations to service our existing debt obligations and could limit our flexibility in planning for or reacting to changes in our business and the industry in which we operate; |

| • | increase our vulnerability to the cyclical nature of our business, economic downturns or other adverse developments in our business; |

| • | could limit our ability to access capital markets, refinance our existing indebtedness, raise capital on favorable terms, or obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy, or for other purposes; |

| • | expose us to the risk of increased interest rates as certain of our borrowings, including borrowings under the Chesapeake revolving credit facility, bear interest at floating rates; |

| • | place restrictions on our ability to obtain additional financing, make investments, lease equipment, sell assets and engage in business combinations; |

| • | place us at a competitive disadvantage relative to competitors with lower levels of indebtedness in relation to their overall size, or those that have less restrictive terms governing their indebtedness, thereby enabling competitors to take advantage of opportunities that our indebtedness may prevent us from pursuing; |

| • | limit management’s discretion in operating our business; and |

| • | increase our cost of borrowing. |

Our ability to pay our expenses and fund our working capital needs and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors.

We will not be able to control many of these factors, such as commodity prices, other economic conditions and governmental regulation.

We have drawn on our $3.0 billion credit facility for liquidity, and the borrowing base is subject to a redetermination in the second quarter of 2020.

If our borrowing base under our revolving credit facility decreases as a result of lower prices of oil, natural gas or NGL, operating difficulties, declines in reserves or for any other reason, we may have limited ability to obtain the capital necessary to sustain our operations and growth at current levels.

To the extent that the value of the collateral pledged under our credit facility declines as a result of lower oil and natural gas prices, asset dispositions or otherwise, we may be required to pledge additional collateral to maintain the current availability of the commitments thereunder, and we cannot assure you that we will be able to maintain a sufficiently high valuation to maintain the current commitments.

In addition, we cannot be certain that our cash flow will be sufficient to allow us to pay the principal and interest on our debt and meet our other obligations.

If we are unable to service our indebtedness and other obligations, we may be required to restructure or refinance all or part of our existing debt, sell assets, reduce capital expenditures, borrow more money or raise equity, some or all of which may not be available to us on terms acceptable to us, if at all, or such alternative strategies may yield insufficient funds to make required payments on our indebtedness.

In addition, our ability to comply with the financial and other restrictive covenants in our indebtedness

could be affected by our future performance and events or circumstances beyond our control.

Failure to comply with these covenants would result in an event of default under such indebtedness, the potential acceleration of our obligation to repay outstanding debt and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness.

Any of the above risks could materially adversely affect our business, financial condition, cash flows and results of operations.

If we are unable to access the capital and credit markets on favorable terms, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity and our ability to repay or refinance our debt.

If we are unable to generate enough cash flow from operations to service our indebtedness or are unable to use future borrowings to refinance our indebtedness or fund other capital needs, we may have to undertake alternative financing plans, which may have onerous terms or may be unavailable.

Our earnings and cash flow could vary significantly from year to year due to the volatility of hydrocarbon commodity prices.

As a result, the amount of debt that we can manage in some periods may not be appropriate for us in other periods.

Additionally, our future cash flow may be insufficient to meet our debt obligations and commitments.

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

See [removed: [Notes 1](#sC7C4FA668F9552D5B9ABF0E64A4C7A72) and [2](#s5CE524823841503782AD9252035013B5)] [added: [Note 3](#i95c607e4b20b4cc39273cc5a1e5634ef_163)] of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of the [removed: change in accounting principle.][added: acquisition.]

As of December 31, [removed: 2019,] [added: 2020,] we had a cash balance of [removed: $6 million] [added: $279 million, as] compared to [removed: $4] [added: $6] million as of December 31, [removed: 2018,] [added: 2019,] and a net working capital deficit of [removed: $1.141] [added: $1.986] billion as of December 31, [removed: 2019,] [added: 2020, as] compared to a net working capital deficit of [removed: $1.289] [added: $1.141] billion as of December 31, [removed: 2018.][added: 2019.]

See [Note [removed: 5](#s5D137AEEA9A851B8B3C3DB703BCD831D)] [added: 5](#i95c607e4b20b4cc39273cc5a1e5634ef_169)] of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of our debt obligations, including principal and carrying amounts of our notes.

[removed: We] [added: As of February 25, 2021, we] had [removed: approximately 76%] downside oil price protection [added: on approximately 19 mmbbls] through swaps [removed: and collars] at [removed: an average price of $59.90] [added: $42.69] per bbl.

| Oil Derivatives(a) | | | | | | | | [added: | | | | | | | | | | | | |]

| Year | | [added: | | | |] Type of Derivative Instrument | | [added: | | | |] Notional Volume | | | [added: | | |] Average [removed: NYMEX] [added: NYMEX/Basis] Price | [added: | |]

| | | | | [added: | | | | | | | |] (mmbbls) | | | | [added: | | | | |]

| [removed: 2020] [added: 2021] | | [added: | | | |] Basis protection [removed: swaps] [added: swaps(b)] | | [removed: 12] | | | [removed: $2.57] | [added: 5 | | | | | | $0.61 | | |]

| Natural Gas Derivatives(a) | | | | | | | | [added: | | | | | | | | | | | | |]

| | | | | [added: | | | | | | | |] (bcf) | | | | [added: | | | | |]

| [removed: 2020] [added: 2022] | | [added: | | | |] Basis protection [removed: swaps] [added: swaps(b)] | | [removed: 53] | | | [removed: $0.03] | [added: 2 | | | | | | $0.09 | | |]

[removed: |] (a) [removed: |] Includes amounts settled in January and February [removed: 2020. |][added: 2021.]

See [Note [removed: 14](#sF6FF4D83C9BA56118FB13A517F864CAC)] [added: 14](#i95c607e4b20b4cc39273cc5a1e5634ef_214)] of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of derivatives and hedging activities.

[removed: *Revolving Credit Facility*][added: | Payments on revolving credit facility borrowings, net | | | | | | — | | | | | | — | | | | | | 362 | | |]

See [removed: [Note 5](#s5D137AEEA9A851B8B3C3DB703BCD831D)] [added: [Note](#i95c607e4b20b4cc39273cc5a1e5634ef_160) [2](#i95c607e4b20b4cc39273cc5a1e5634ef_160)] of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of [removed: the terms of] our [removed: revolving credit facility.][added: DIP Credit Facility.]

[removed: *Term Loan*][added: | Term loan | | | | | | $ | — | | | | | $ | — | | | | | $ | 1,500 | | | | | $ | 1,455 | | | | | $ | — | | | | | $ | — | |]

See [Note [removed: 5](#s5D137AEEA9A851B8B3C3DB703BCD831D)] [added: 7](#i95c607e4b20b4cc39273cc5a1e5634ef_181)] of the notes to our consolidated financial statements included in Item 8 [added: of this report] for further discussion of [removed: the term loan facility.][added: our VPPs.]

The table below summarizes our contractual cash obligations for both recorded obligations and certain off-balance sheet arrangements and commitments as of December 31, [removed: 2019:][added: 2020:]

| | | [added: | | | |] Payments Due By Period | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| | | [added: | | | |] Total | | | | [removed: 2020] | | [added: 2021] | | [removed: 2021-2022] | | | | [removed: 2023-2024] [added: 2022-2023] | | | | [removed: 2025] [added: | | 2024-2025 | | | | | | 2026] and Beyond | | |

| | | [added: | | | |] ($ in millions) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| Long-term debt: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Finance lease obligation(b) | | [removed: 20] | | | | 10 | | | | [added: | |] 10 | | | | [added: | |] — | | | | [added: | |] — | | | [added: | | | — | | |]

| Operating lease obligations(c) | | [added: | | | | 30 | | | | | |] 28 | | | | [removed: 10] | | [added: 2] | | [removed: 9] | | | | [removed: 4] [added: —] | | | | [removed: 5] | | [added: —] | [added: | |]

| Standby letters of credit | | [removed: 59] | | | | [removed: 59] [added: 54] | | | | [added: | | 54 | | | | | |] — | | | | [added: | |] — | | | | [added: | |] — | | |

| Other | | [removed: 13] | | | | [removed: 3] [added: 12] | | | | [removed: 8] | | [added: 6] | | [removed: 2] | | | | [added: 6 | | | | | |] — | | | [added: | | | — | | |]

[removed: | (a) |] See [Note [removed: 5](#s5D137AEEA9A851B8B3C3DB703BCD831D)] [added: 5](#i95c607e4b20b4cc39273cc5a1e5634ef_169)] of the notes to our consolidated financial statements included in Item 8 of this report for a description of our long-term debt. [removed: |]

[removed: |] (b) [removed: |] See [Note [removed: 8](#sB7855621DE1051A397BB2EAC606A767A)] [added: 8](#i95c607e4b20b4cc39273cc5a1e5634ef_184)] of the notes to our consolidated financial statements included in Item 8 of this report for a description of our finance lease obligation. [removed: |]

[removed: |] (c) [removed: |] See [Note [removed: 8](#sB7855621DE1051A397BB2EAC606A767A)] [added: 8](#i95c607e4b20b4cc39273cc5a1e5634ef_184)] of the notes to our consolidated financial statements included in Item 8 of this report for a description of our operating lease obligations. [removed: |]

[removed: |] (d) [removed: |] See [Note [removed: 6](#s37848F4625A9589F9392B20F64B43D45)] [added: 6](#i95c607e4b20b4cc39273cc5a1e5634ef_178)] of the notes to our consolidated financial statements included in Item 8 of this report for a description of our gathering, processing and transportation agreements and service contract commitments. [removed: |]

[removed: | (e) |] See [Note [removed: 7](#s3719DECD192C5C92A8DD5297F971C3BD)] [added: 17](#i95c607e4b20b4cc39273cc5a1e5634ef_232)] of the notes to our consolidated financial statements included in Item 8 of this report for a discussion of our [removed: VPP obligation. |][added: investments.]

[removed: (f)] [added: (e)] This table does not include derivative liabilities or the estimated discounted liability for future dismantlement, abandonment and restoration costs of oil and natural gas properties.

See [Notes [removed: 14](#sF6FF4D83C9BA56118FB13A517F864CAC)] [added: 14](#i95c607e4b20b4cc39273cc5a1e5634ef_214)] and [removed: [22](#sD52D1A780A6F5BDAA40846940D8CAC15),] [added: [22](#i95c607e4b20b4cc39273cc5a1e5634ef_244),] respectively, of the notes to our consolidated financial statements included in Item 8 of this report for more information on our derivatives and asset retirement obligations.

The following table presents the sources of our cash and cash equivalents for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017.][added: 2018.]

See [Note [removed: 3](#s6C24CA5E58825CA3A04F97A858628395)] [added: 3](#i95c607e4b20b4cc39273cc5a1e5634ef_163)] of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of divestitures of oil and natural gas assets.

| | | [added: | | | |] Years Ended December 31, | | | | | | | | | | | [added: | | | |]

| | | [removed: 2019] | | | | [removed: 2018] [added: 2020] | | | | [removed: 2017] | | [added: 2019] | [added: | | | | | 2018 | | |]

| | | [added: | | | |] ($ in millions) | | | | | | | | | | | [added: | | | |]

| Cash provided by operating activities | | [added: | | | |] $ | [removed: 1,623] [added: 1,164] | | | [added: | |] $ | [removed: 1,730] [added: 1,623] | | | [added: | |] $ | [removed: 475] [added: 1,730] | |

Introduction

We are an independent exploration and production company engaged in the acquisition, exploration and development of properties to produce oil, natural gas and NGLs from underground reservoirs.

We own a large and geographically diverse portfolio of onshore U.S. unconventional natural gas and liquids assets, including interests in approximately 7,400 oil and natural gas wells.

Our natural gas resource plays are the Marcellus Shale in the northern Appalachian Basin in Pennsylvania and the Haynesville/Bossier Shales in northwestern Louisiana.

Our liquids-rich resource plays are the Eagle Ford Shale in South Texas and the stacked pay in the Powder River Basin in Wyoming.

Recent Developments

*Voluntary Reorganization Under Chapter 11*

On June 28, 2020, the Debtors filed voluntary petitions for relief under the Bankruptcy Code in the Bankruptcy Court.

On June 29, 2020, the Bankruptcy Court entered an order authorizing the joint administration of the Chapter 11 Cases under the caption *In re Chesapeake Energy Corporation*, Case No. 20-33233 (DRJ).

Subsidiaries with noncontrolling interests, consolidated variable interest entities and certain de minimis subsidiaries (collectively, the “Non-Filing Entities”) were not part of the Chapter 11 Cases.

The Debtors and the Non-Filing Entities continued to operate in the ordinary course of business during the Chapter 11 Cases.

During the Chapter 11 Cases, the Debtors operated as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code.

The Bankruptcy Court granted first day motions filed by us that were designed primarily to mitigate the impact of the Chapter 11 Cases on our operations, customers and employees.

As a result, we were able to conduct normal business activities and pay all associated obligations for the period following the Bankruptcy filing and were authorized to pay owner royalties, employee wages and benefits, and certain vendors and suppliers in the ordinary course for goods and services provided.

During the pendency of the Chapter 11 Cases, all transactions outside the ordinary course of business required the prior approval of the Bankruptcy Court.

For the duration of the Chapter 11 Cases, our operations and ability to develop and execute our business plan were subject to the risks and uncertainties associated with the Chapter 11 process as described in Item 1A.

“Risk Factors.” As a result of these risks and uncertainties, the number of our shares of common stock and stockholders, assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases, and the description of our operations, properties and capital plans included in this Form 10-Q may not accurately reflect our operations, properties and capital plans following the Chapter 11 Cases.

During the Chapter 11 Cases, we expected our financial results to continue to be volatile as Restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact our consolidated financial statements.

As a result, our historical financial performance is likely not indicative of our financial performance after the date of the Petition Date.

In addition, we incurred significant professional fees and other costs in connection with preparation for the Chapter 11 Cases.

On October 13, 2020, we filed a notice with the Bankruptcy Court that we reached an agreement with Tapstone Energy, LLC (“Tapstone Energy”) as the “Stalking Horse” bidder to sell our Mid-Continent asset for $85 million in a Section 363 transaction under the Bankruptcy Code.

An auction supervised by the Bankruptcy Court was held on November 10, 2020, in which other pre-qualified buyers submitted bids for the asset.

We presented the results of the auction process to the Bankruptcy Court and the sale was approved on November 13, 2020.

On December 11, 2020, we closed the transaction with Tapstone Energy for $130 million, subject to post-closing adjustments which resulted in the recognition of a gain of approximately $27 million.

On November 22, 2020, we filed notice with the Bankruptcy Court that we had reached an agreement with The Williams Companies, Inc. (“Williams”) to transfer certain Haynesville assets, including interests in 144 producing wells and approximately 50,000 net acres, in exchange for improved midstream contract terms with respect to assets we retained.

On December 15, 2020, the Court approved the transaction with Williams and the exchange resulted in the recognition of loss of approximately $128 million based on the difference between the carrying value of the assets and the fair value of the assets surrendered.

The exchange was executed to obtain sufficient savings on midstream obligations as required by the Plan.

Therefore, the loss was recorded to reorganization items, net in our consolidated statements of operations.

See Item 1.

Business, Item 7.

*COVID-19 Pandemic and Impact on Global Demand for Oil and Natural Gas*

The global spread of COVID-19 created significant volatility, uncertainty, and economic disruption during 2020.

The pandemic has reached more than 200 countries and territories and has resulted in widespread adverse impacts on the global economy and on our customers and other parties with whom we have business relations.

There remains considerable uncertainty regarding how long the pandemic and related market conditions will persist.

In certain cases, states that had begun taking steps to reopen their economies experienced a subsequent surge in cases of COVID-19, causing these states to cease such reopening measures in some cases and reinstitute restrictions in others.

To date, we have experienced limited operational impacts as a result of COVID-19 or the related governmental restrictions.

As an essential business under the guidelines issued by each of the states in which we operate, we have been allowed to continue operations.

As a result, in mid-March of 2020, we restricted access to all of our offices and for a period of time directed employees to work remotely to the extent possible.

We began to re-open our offices in phases beginning in mid-May of 2020, and we have implemented special precautions to minimize the risk to our employees of exposure.

These actions have allowed us to maintain the engagement and connectivity of our personnel.

Overview

Recent highlights include the following:

| | |

| --- | --- |

| • | acquired WildHorse, an oil and gas company with operations in the Eagle Ford Shale and Austin Chalk formations in southeast Texas, for approximately 717.4 million shares of our common stock and $381 million in cash, and the assumption of WildHorse’s debt of $1.4 billion as of February 1, 2019. We anticipate the acquisition to materially increase our oil production and enhance our oil production mix as well as significantly reduce costs due to operational synergies that we believe the combined company will achieve. We achieved $250 million of cost savings in 2019 and we expect that the WildHorse Merger will provide substantial cost savings with $200 million to $280 million in projected average annual savings, totaling $1 billion to $1.5 billion by 2023, due to operational and capital efficiencies as a result of Chesapeake’s significant expertise with unconventional assets and technical and operational excellence; |

| • | entered into a secured 4.5-year term loan facility for $1.5 billion to finance a tender offer for unsecured notes issued by Brazos Valley Longhorn and Brazos Valley Longhorn Finance Corp., each a wholly owned subsidiary of Chesapeake, and to fund the retirement of Brazos Valley Longhorn’s secured revolving credit facility; |

| • | exchanged new 11.5% Senior Secured Second Lien Notes due 2025 for 8.00% Senior Notes due 2027, 8.00% Senior Notes due 2026, 8.00% Senior Notes due 2025, 7.50% Senior Notes due 2026 and 7.00% Senior Notes due 2024. Also, we issued an additional $120 million of 11.5% Senior Secured Second Lien Notes due 2025 pursuant to a private offering, at 89.75% of par. These transactions resulted in the removal of approximately $900 million principal amount of debt from the company’s balance sheet. |

| • | privately negotiated exchanges of approximately $507 million principal amount of our outstanding senior notes for 235,563,519 shares of common stock and $186 million principal amount of our outstanding convertible senior notes for 73,389,094 shares of common stock, reducing annual interest payments; |

| • | exchanged 40,000 shares of our 5.75% (Series A) Cumulative Convertible Preferred Stock for 10,367,950 shares of common stock, reducing annual preferred stock dividend payments; |

| • | extended our debt maturity profile by privately exchanging approximately $884 million aggregate principal amount of our existing 6.625% Senior Notes due 2020, 6.875% Senior Notes due 2020, 6.125% Senior Notes due 2021 and 5.375% Senior Notes due 2021 for approximately $919 million aggregate principal amount of new 8.00% Senior Notes due 2026; and |

| • | improved our cost structure by reducing combined production, gathering, processing and transportation and general and administrative expenses by approximately $0.79 per boe, or $290 million in 2019 compared to 2018, or 13%. The primary driver in the reduction is lower gathering, processing and transportation expenses due to certain 2018 divestitures and recently renegotiated contracts. |

In 2020 and beyond, our focus remains concentrated on four long-term strategic priorities:

| • | reduce total leverage to achieve long-term net debt/EBITDAX of 2x; |

| • | achieve sustained free cash flow generation; |

| • | improve margins through financial discipline and operating efficiencies; and |

| • | maintain industry leading environmental and safety performance. |

Natural gas prices are at their lowest levels since the first half of 2016.

Accordingly, a majority of our 2020 capital will be allocated to our higher margin oil assets with total expected 2020 capital expenditures being approximately 30% lower than 2019 while maintaining flat oil production.

We plan to seek the lowest capital program possible to reach and sustain positive cash flow.

*Business and Industry Outlook*

Over the past decade, the landscape of energy production has changed dramatically in the United States.

Domestic energy production capabilities have increased the nation’s supply of both crude oil and natural gas, primarily driven by advances in technology, horizontal drilling and hydraulic fracture stimulation techniques.

As a result of this increase in domestic supply of crude oil and natural gas, commodity prices for these products are meaningfully lower than they were a decade ago, and may remain volatile for the foreseeable future.

We believe the prolonged lower commodity price environment has fundamentally changed the expectations of capital markets, resulting in new capital being both more difficult and more expensive to access.

Currently, capital markets are no longer willing to fund organic growth.

We believe our strategic priorities are consistent with these expectations as we look to continue to increase our cash flow and expand our margins by focusing on high-return drilling locations and reduced capital and operating costs using cash generated from operations and asset sales.

We look to continue to reduce debt on our balance sheet with asset sales and liability management activities similar to those completed in 2019.

*Change in Accounting Principle*

During the first quarter of 2019, we changed our method of accounting for our oil and natural gas exploration and development activities from the full cost method to the successful efforts method of accounting.

Financial information for all periods presented has been recast to reflect retrospective application of the successful efforts method of accounting.

Our ability to grow, make capital expenditures and service our debt depends primarily upon the prices we receive for the oil, natural gas and NGL we sell.

Substantial expenditures are required to replace reserves, sustain production and fund our business plans.

Historically, oil and natural gas prices have been volatile and may be subject to wide fluctuations in the future.

A decline in oil, natural gas and NGL prices could negatively affect the amount of cash we generate and have available for capital expenditures and debt service and could have a material impact on our financial position, results of operations, cash flows and on the quantities of reserves that we can economically produce or provide as collateral to our credit facility lenders.

Other risks and uncertainties that could affect our liquidity include, but are not limited to, counterparty credit risk for our receivables, access to capital markets, regulatory risks and our ability to meet financial covenants in our financing agreements.

Based on our cash balance, forecasted cash flows from operating activities and availability under our revolving credit facilities, we expect to be able to fund our planned capital expenditures, meet our debt service requirements and fund our other commitments and obligations for the next 12 months.

As of December 31, 2019, our working capital deficit includes $385 million of debt due in the next 12 months.

Our total principal debt as of December 31, 2019 was $8.916 billion compared to $8.168 billion as of December 31, 2018.

As of December 31, 2019, we had $1.351 billion of borrowing capacity available under our revolving credit facility, with outstanding borrowings of $1.590 billion and $59 million utilized for various letters of credit.

We closely monitor the amounts and timing of our sources and uses of funds, particularly as they affect our ability to maintain compliance with the financial covenants of our revolving credit facilities.

See [Note [removed: 14](#sF6FF4D83C9BA56118FB13A517F864CAC)] [added: 14](#i95c607e4b20b4cc39273cc5a1e5634ef_214)] of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of the fair value measurements associated with our derivatives.

For the year ended December 31, [removed: 2019,] [added: 2020,] oil, natural gas, and NGL revenue, excluding any effect of our derivative instruments, were [removed: $2.543] [added: $1.4] billion, [removed: $1.782] [added: $1.2] billion, and [removed: $192] [added: $130] million, respectively.

Based on [removed: 2019] [added: 2020] production, oil, natural gas, and NGL revenue for the year ended December 31, [removed: 2019] [added: 2020] would have increased or decreased by approximately [removed: $254] [added: $140] million, [removed: $178] [added: $120] million, and [removed: $19] [added: $13] million, respectively, for each 10% increase or decrease in prices.

As of December 31, [removed: 2019,] [added: 2020,] the fair values of our oil and gas derivatives were net assets of [removed: $5] [added: $19] million and [removed: $125] [added: net liabilities of $137] million, respectively.

A 10% increase in forward oil prices would decrease the valuation of oil derivatives by [removed: $147] [added: $187] million while a 10% decrease would increase the valuation by [removed: $150] [added: $185] million.

A 10% increase in forward gas prices would decrease the valuation of gas derivatives by approximately [removed: $58] [added: $129] million while a 10% decrease would increase the valuation by [removed: $57] [added: $129] million.

This fair value change assumes volatility based on prevailing market parameters at December 31, [removed: 2019.][added: 2020.]

See [Note [removed: 14](#sF6FF4D83C9BA56118FB13A517F864CAC)] [added: 14](#i95c607e4b20b4cc39273cc5a1e5634ef_214)] of the notes to our consolidated financial statements included in Item 8 of this report for further information on our open derivative positions.

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

[removed: However, changes] [added: Changes] in interest rates do affect the fair value of our fixed-rate debt.

Our exposure to interest rate changes relates primarily to borrowings under our pre-petition revolving credit facility and DIP Credit Facility.

Interest was payable on borrowings under the pre-petition revolving credit facility and DIP Credit Facility based on a floating rate.

See [Note 5](#i95c607e4b20b4cc39273cc5a1e5634ef_169) of the notes to our consolidated financial statements included in Item 8 of this report for additional information.

As of December 31, 2020, we had $1.929 billion in borrowings outstanding under our pre-petition revolving credit facility and no outstanding borrowings under our DIP Credit Facility.

A 1.0% increase in interest rates based on the variable borrowings as of December 31, 2020 would result in an increase in our interest expense of approximately $19 million per year.

Beginning with this report, we have revised our commodity price risk disclosure alternative from the tabular format to a sensitivity analysis, which we believe is a more commonly used and easily understood disclosure alternative.

We have presented below the tabular analysis as of December 31, 2019 and 2018 for comparative purposes.

*Oil, Natural Gas and NGL Derivatives*

As of December 31, 2019, and 2018, our oil, natural gas and NGL derivative instruments consisted of the following types of instruments:

| | |

| --- | --- |

| *•* | *Swaps*: We receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. In exchange for higher fixed prices on certain of our swap trades, we may sell call options and call swaptions. |

| • | *Options*: We sell, and occasionally buy, call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, we pay the counterparty the excess on sold call options and we receive the excess on bought call options. If the market price settles below the fixed price of the call option, no payment is due from either party. |

| • | *Call Swaptions*: We sell call swaptions to counterparties in exchange for a premium. Swaptions allow the counterparty, on a specific date, to extend an existing fixed-price swap for a certain period of time or to increase the notional volumes of an existing fixed-price swap. |

| • | *Collars*: These instruments contain a fixed floor price (put) and ceiling price (call). If the market price exceeds the call strike price or falls below the put strike price, we receive the fixed price and pay the market price. If the market price is between the put and the call strike prices, no payments are due from either party. Three-way collars include the sale by us of an additional put option in exchange for a more favorable strike price on the call option. This eliminates the counterparty’s downside exposure below the second put option strike price. |

| *•* | *Basis Protection Swaps*: These instruments are arrangements that guarantee a fixed price differential to NYMEX from a specified delivery point. We receive the fixed price differential and pay the floating market price differential to the counterparty for the hedged commodity. |

As of December 31, 2019, we had the following open oil and natural gas derivative instruments:

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | Weighted Average Price | | | | | | | | | | | | | | | | Fair Value | | |

| | | Volume | | | Fixed | | | | Call | | | | Put | | | | Differential | | | | Asset (Liability) | | |

| | | (mmbbl) | | | ($ per bbl) | | | | | | | | | | | | | | | | ($ in millions) | | |

| Oil: | | | | | | | | | | | | | | | | | | | | | | | |

| Swaps: | | | | | | | | | | | | | | | | | | | | | | | |

| Short-term | | 24 | | | $ | 58.54 | | | $ | — | | | $ | — | | | $ | — | | | $ | (7 | ) |

| Collars: | | | | | | | | | | | | | | | | | | | | | | | |

| Short-term | | 2 | | | $ | — | | | $ | 83.25 | | | $ | 65.00 | | | $ | — | | | 14 | | |

| Basis Protection Swaps: | | | | | | | | | | | | | | | | | | | | | | | |

| Short-term | | 8 | | | $ | — | | | $ | — | | | $ | — | | | $ | 2.49 | | | (2 | | ) |

| Total Oil | | | | | | | | | | | | | | | | | | | | | 5 | | |

| | | (bcf) | | | ($ per mcf) | | | | | | | | | | | | | | | | | | |

| Natural Gas: | | | | | | | | | | | | | | | | | | | | | | | |

| Short-term | | 265 | | | $ | 2.76 | | | $ | — | | | $ | — | | | $ | — | | | 125 | | |

| Call Options (sold): | | | | | | | | | | | | | | | | | | | | | | | |

| Short-term | | 22 | | | $ | — | | | $ | 12.00 | | | $ | — | | | $ | — | | | — | | |

| Call Swaptions: | | | | | | | | | | | | | | | | | | | | | | | |

| Long-term | | 29 | | | $ | 2.80 | | | $ | — | | | $ | — | | | $ | — | | | (2 | | ) |

| Short-term | | 30 | | | $ | — | | | $ | — | | | $ | — | | | $ | 0.08 | | | 2 | | |

| Total Natural Gas | | | | | | | | | | | | | | | | | | | | | 125 | | |

| Total Commodities | | | | | | | | | | | | | | | | | | | | | $ | 130 | |

As of December 31, 2018, we had the following open oil and natural gas derivative instruments:

| | | Volume | | | Fixed | | | | Call | | | | Put | | | | Differential | | | | Asset (Liability) | | |

| Short-term | | 10 | | | $ | 58.97 | | | $ | — | | | $ | — | | | $ | — | | | $ | 117 | |

| Long-term | | 2 | | | $ | 68.14 | | | $ | — | | | $ | — | | | $ | — | | | 40 | | |

| Short-term | | 6 | | | $ | — | | | $ | 67.75 | | | $ | 58.00 | | | $ | — | | | 68 | | |

We are an independent exploration and production company engaged in the acquisition, exploration and development of properties to produce oil, natural gas and [removed: NGL] [added: NGLs] from underground reservoirs.

We own a large and geographically diverse portfolio of onshore U.S. unconventional [removed: liquids and] natural gas [added: and liquids] assets, including interests in approximately [removed: 13,500] [added: 7,400] oil and natural gas wells.

[removed: We have significant positions in the] [added: Our] liquids-rich resource plays [removed: of] [added: are] the Eagle Ford Shale in South [removed: Texas,] [added: Texas and] the stacked pay in the Powder River Basin in [removed: Wyoming and the Anadarko Basin in northwestern Oklahoma.][added: Wyoming.]

We [removed: continue to] focus on [removed: reducing debt, increasing cash provided by operating activities,] improving margins through [removed: financial discipline and] operating efficiencies and [removed: maintaining exceptional environmental] [added: financial discipline] and [removed: safety] [added: further improving our Environmental, Social and Corporate Governance (ESG)] performance.

To accomplish these goals, we intend to allocate our [added: human resources and] capital expenditures to projects we believe offer the highest [added: cash] return [removed: and value regardless of the commodity price environment,] [added: on capital invested,] to deploy leading drilling and completion technology throughout our portfolio, and to take advantage of acquisition and divestiture opportunities to strengthen our [removed: cost structure and our] portfolio.

We continue to seek opportunities to reduce cash costs [removed: per barrel of oil equivalent production] (production, gathering, processing and transportation and general and administrative) [added: per barrel of oil equivalent production] through operational efficiencies, including [added: but not limited to] improving our production volumes from existing wells.

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

We focus our [added: acquisition,] exploration, [removed: development, acquisition] [added: development] and production efforts in the [removed: six] [added: five] geographic operating areas described below.

As of December 31, [removed: 2019,] [added: 2020,] we held an interest in approximately [removed: 13,500] [added: 7,400] gross [removed: (6,800 net)] productive wells, including [removed: 11,400] [added: 5,900] properties in which we held a working interest and [removed: 2,100] [added: 1,500] properties in which we held an overriding or royalty interest.

Of the [removed: 11,400] [added: 5,900 (3,700 net)] properties in which we [removed: had] [added: held] a working interest, [removed: we operated 8,500 wells, of which 7,000 gross (4,000 net),] [added: 2,500 (1,400 net) properties] were classified as productive natural gas wells and [removed: 4,400 gross (2,800] [added: 3,400 (2,300] net) [added: properties] were classified as productive oil wells.

[removed: During 2019, we] [added: We also] drilled or participated in [removed: 370] [added: 188] gross [removed: (273] [added: (128] net) wells as operator and participated in another [removed: 49] [added: 17] gross [removed: (3] [added: (nominal] net) wells completed by other operators.

| | | [added: | | | | 2020 | | | | | | | | | | | | | | | | | | | | | | | |] 2019 | | | | | | | | | | | | [removed: 2018] | | | | | | | | | | | | [removed: 2017] [added: 2018] | | | | | | | | | | | [added: | | | | | | | | | |]

| | | [added: | | | |] Gross | | | [added: | | |] % | | | [added: | | |] Net | | | [added: | | |] % | | | [added: | | |] Gross | | | [added: | | |] % | | | [added: | | |] Net | | | [added: | | |] % | | | [added: | | |] Gross | | | [added: | | |] % | | | [added: | | |] Net | | | [added: | | |] % | | [added: |]

| Development: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Productive | | [added: | | | | 203 | | | | | | 100 | | | | | | 126 | | | | | | 100 | | | | | |] 414 | | | [added: | | |] 100 | | | [added: | | |] 271 | | | [added: | | |] 100 | | | [removed: 363] | | | [removed: 99] [added: 363] | | | [removed: 227] | | | 99 | | | [removed: 462] | | | [removed: 99] [added: 227] | | | [removed: 292] | | | 99 | | [added: |]

| Dry | | [added: | | | |] — | | | [added: | | |] — | | | [added: | | |] — | | | [added: | | |] — | | | [removed: 2] | | | [removed: 1] [added: —] | | | [removed: 1] | | | [added: — | | | | | | — | | | | | | — | | | | | | 2 | | | | | |] 1 | | | [removed: 4] | | | 1 | | | [removed: 2] | | | 1 | | [added: |]

| Total | | [removed: 414] | | | [added: | 203 | | | | | |] 100 | | | [removed: 271] | | | [added: 126 | | | | | |] 100 | | | [removed: 365] | | | [added: 414 | | | | | |] 100 | | | [removed: 228] | | | [added: 271 | | | | | |] 100 | | | [removed: 466] | | | [added: 365 | | | | | |] 100 | | | [removed: 294] | | | [added: 228 | | | | | |] 100 | | [added: |]

| Exploratory: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Productive | | [added: | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | |] 1 | | | [added: | | |] 20 | | | [added: | | |] 1 | | | [added: | | |] 20 | | | [removed: 10] | | | [removed: 83] [added: 10] | | | [removed: 9] | | | [removed: 82] [added: 83] | | | [removed: 2] | | | [removed: 100] [added: 9] | | | [removed: 2] | | | [removed: 100] [added: 82] | | [added: |]

| Dry | | [added: | | | | 2 | | | | | | 100 | | | | | | 2 | | | | | | 100 | | | | | |] 4 | | | [added: | | |] 80 | | | [added: | | |] 4 | | | [removed: 80] | | | [removed: 2] [added: 80] | | | [removed: 17] | | | 2 | | | [removed: 18] | | | [removed: —] [added: 17] | | | [removed: —] | | | [removed: —] [added: 2] | | | [removed: —] | | [added: | 18 | | |]

| Total | | [removed: 5] | | | [added: | 2 | | | | | |] 100 | | | [removed: 5] | | | [added: 2 | | | | | |] 100 | | | [removed: 12] | | | [added: 5 | | | | | |] 100 | | | [removed: 11] | | | [added: 5 | | | | | |] 100 | | | [removed: 2] | | | [added: 12 | | | | | |] 100 | | | [removed: 2] | | | [added: 11 | | | | | |] 100 | | [added: |]

| | | [added: | | | | 2020 | | | | | | | | | | | |] 2019 | | | | | | [removed: 2018] | | | | | | [removed: 2017] [added: 2018] | | | | | [added: | | | |]

| | | [added: | | | |] Gross Wells | | | [added: | | |] Net Wells | | | [added: | | |] Gross Wells | | | [added: | | |] Net Wells | | | [added: | | |] Gross Wells | | | [added: | | |] Net Wells | | [added: |]

| Marcellus | | [added: | | | | 79 | | | | | | 33 | | | | | |] 44 | | | [added: | | |] 22 | | | [removed: 52] | | | [removed: 23] [added: 52] | | | [removed: 43] | | | [removed: 21] [added: 23] | | [added: |]

| Haynesville | | [added: | | | | 21 | | | | | | 19 | | | | | |] 22 | | | [added: | | |] 16 | | | [removed: 30] | | | [removed: 21] [added: 30] | | | [removed: 37] | | | [removed: 34] [added: 21] | | [added: |]

| Eagle Ford | | [added: | | | | 55 | | | | | | 36 | | | | | |] 150 | | | [added: | | |] 85 | | | [removed: 162] | | | [removed: 98] [added: 162] | | | [removed: 180] | | | [removed: 106] [added: 98] | | [added: |]

| Brazos Valley | | [added: | | | | 31 | | | | | | 29 | | | | | |] 83 | | | [added: | | |] 79 | | | [removed: —] | | | — | | | [removed: —] | | | — | | [added: |]

| Powder River Basin | | [added: | | | | 12 | | | | | | 9 | | | | | |] 75 | | | [added: | | |] 57 | | | [removed: 41] | | | [removed: 34] [added: 41] | | | [removed: 25] | | | [removed: 21] [added: 34] | | [added: |]

| Mid-Continent | | [added: | | | | 5 | | | | | | — | | | | | |] 40 | | | [added: | | |] 12 | | | [removed: 52] | | | [removed: 32] [added: 52] | | | [removed: 114] | | | [removed: 58] [added: 32] | | [added: |]

| Utica | | [added: | | | |] — | | | [added: | | |] — | | | [removed: 40] | | | [removed: 31] [added: —] | | | [removed: 69] | | | [removed: 56] [added: —] | | [added: | | | | 40 | | | | | | 31 | | |]

| Other | | [added: | | | | 2 | | | | | | 2 | | | | | |] 5 | | | [added: | | |] 5 | | | [removed: —] | | | — | | | [removed: —] | | | — | | [added: |]

| Total | | [added: | | | | 205 | | | | | | 128 | | | | | |] 419 | | | [added: | | |] 276 | | | [removed: 377] | | | [removed: 239] [added: 377] | | | [removed: 468] | | | [removed: 296] [added: 239] | | [added: |]

As of December 31, [removed: 2019,] [added: 2020,] we had [removed: 123] [added: 55] gross [removed: (70] [added: (32] net) wells in the process of being drilled or completed.

| | | [added: | | | |] Years Ended December 31, | | | | | | | | | | | [added: | | | |]

| | | [removed: 2019] | | | | [removed: 2018] [added: 2020] | | | | [removed: 2017] | | [added: 2019] | [added: | | | | | 2018 | | |]

| Net Production: | | | | | | | | | | | | | [added: | | | | | | | |]

| Oil (mmbbl) | | [removed: 43] | | | | [removed: 33] [added: 37] | | | | [added: | | 43 | | | | | |] 33 | | |

| Natural gas (bcf) | | [removed: 728] | | | | [removed: 832] [added: 685] | | | | [removed: 878] | | [added: 728] | [added: | | | | | 832 | | |]

| NGL (mmbbl) | | [removed: 12] | | | | [removed: 19] [added: 11] | | | | [removed: 21] | | [added: 12] | [added: | | | | | 19 | | |]

| Oil equivalent (mmboe) | | [removed: 177] | | | | [removed: 190] [added: 163] | | | | [removed: 200] | | [added: 177] | [added: | | | | | 190 | | |]

On June 28, 2020, we and certain of our subsidiaries filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

The Bankruptcy Court confirmed the Plan in a bench ruling on January 13, 2021 and entered the Confirmation Order on January 16, 2021.

The Debtors emerged from bankruptcy on February 9, 2021.

Upon emergence, all existing equity was canceled and new common stock was issued to the previous holders of our FLLO Term Loan Facility, Second Lien Notes, senior unsecured notes and certain general unsecured creditors whose claims were impaired as a result of our bankruptcy, as well as to other parties as set forth in the Plan, including to other parties participating in a $600 million rights offering.

To facilitate our discussion in this report, we refer to the post-emergence reorganized company as the “Successor” and the pre-emergence company as the “Predecessor.” See [Note](#i95c607e4b20b4cc39273cc5a1e5634ef_160) [](#i95c607e4b20b4cc39273cc5a1e5634ef_160)[2](#i95c607e4b20b4cc39273cc5a1e5634ef_160) of the notes to our consolidated financial statements included in Item 8 of this report for further discussion of our bankruptcy and resulting reorganization.

*Consistent Returns, Sustainable Future*

Our strategy is to create shareholder value by generating cash flow from our oil and natural gas development and production activities.

We also intend to continue to dedicate capital to projects that reduce the environmental impact of our oil and natural gas producing activities.

We believe that we have emerged from Chapter 11 bankruptcy as a fundamentally stronger company, built to generate sustainable free cash flow with a strengthened balance sheet, geographically diverse asset base and continuously improving ESG performance.

*Maintain low leverage and strong liquidity.* Now that we have emerged from Chapter 11 bankruptcy, we expect to target a net leverage ratio, which is measured as our net debt as a ratio of trailing 12-month EBITDAX, of less

than 1x.

We believe that maintaining low net leverage is integral to our business strategy and will allow us to maintain lower fixed costs, improve our margins and maintain the flexibility of our capital program.

*Returns-focused capital reinvestment strategy.* Our business focus will be on optimizing the development of our large, geographically diverse resource base with a prioritization of generating high cash returns on capital invested.

As a result, we will target a long-term disciplined capital reinvestment rate, which we define as annual capital expenditures as a percentage of trailing 12-month EBITDAX, of 60% to 70%.

We believe this level of reinvestment will be adequate to support our target long-term annual maintenance capital expenditure level, excluding capitalized interest, of $700 million to $750 million.

We expect our maintenance capital program to yield in excess of annual production of 400 thousand barrels of oil equivalent per day and generate significant free cash flow at today’s prevailing commodity market prices.

*Low-cost operator with expected top-quartile cash costs*.

We expect to continue to focus on our cost reduction initiatives, targeting a long-term annual free cash flow yield of 30% to 40% of annual EBITDAX.

Since filing the Chapter 11 Cases in June 2020, we have successfully renegotiated or terminated certain of our midstream contracts and commitments, which resulted in significant reduction to our anticipated gathering, processing and transportation expenses, cumulatively achieving approximately $4 billion in expected lifetime contract savings (or $2 billion discounted to present value, assuming a 10% annual discount rate).

For 2019, our total cash costs, inclusive of gathering, processing and transportation, operating, general and administrative and interest expenses were $2.8 billion.

Now that we have emerged from Chapter 11 bankruptcy, based on the termination or successful renegotiation of many of our gathering, processing and transportation contracts, as well as reductions in expected interest, operating and general and administrative expenses, we expect our annualized cash costs for 2021 to be reduced by approximately $1 billion relative to 2019.

*Continue efforts to reduce greenhouse gas (GHG) emissions and operate in an environmentally responsible manner with a goal of net zero direct GHG emissions by 2035*.

We are committed to operating our business responsibly and protecting the environments in which we operate.

We plan to eliminate routine flaring on all new wells completed in 2021 and beyond, and accomplish the same on all wells, enterprise-wide by 2025.

We intend to reduce our methane loss rate to 0.09% and our GHG intensity to 5.5 by 2025, reductions of 47% and 33%, respectively, as compared to 2019.

*Manage commodity price exposure and ensure stability through prudent hedging strategy*.

We employ a prudent hedging strategy, which is aligned with our capital expenditure program and is designed to manage our exposure to commodity price volatility, ensure the stability of our cash flows and mitigate our risks to realizing attractive cash returns on capital invested.

As of February 25, 2021, and consistent with requirements of our DIP Credit Facility we have 19 mmbbls and 548 bcf of expected 2021, representing 77% and 74% of 2021 forecasted oil and natural gas production hedged at prices of $42.69/bbl and $2.67/mcf, respectively.

Additionally, as of February 25, 2021, we have hedged 11 mmbbl and 273 bcf of expected 2022 oil and natural gas production at prices of $44.30/bbl and $2.53/mcf, respectively.

*Brazos Valley* - Southeast Texas.

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

During 2020 excluding sold properties, we operated 5,200 gross wells and held a non-operating working interest in 700 gross wells.

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[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

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In February 2019, we acquired WildHorse Resource Development Corporation, an oil and gas company with operations in the Eagle Ford Shale and Austin Chalk formations in southeast Texas, for approximately 717.4 million shares of our common stock and $381 million in cash, and the assumption of WildHorse’s debt of $1.4 billion as of the acquisition date of February 1, 2019.

The acquisition of WildHorse expands our oil growth platform and accelerates our progress toward our strategic and financial goals of enhancing our margins, achieving sustainable free cash flow generation and reducing our net debt to EBITDAX ratio.

Our strategy is to create shareholder value through the development of our significant resource plays.

Increasing our margins means not only increasing our absolute level of cash flow from operations, but also increasing our cash flow from operations generated per barrel of oil equivalent production.

We believe that our dedication to financial discipline, the flexibility and efficiency of our capital program and our continued focus on safety and environmental stewardship will provide opportunities to create value for us and our shareholders.

*Brazos Valley* - Southeast Texas assets acquired in our WildHorse acquisition on February 1, 2019.

*Mid-Continent -* Anadarko Basin in northwestern Oklahoma.

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| | | December 31, 2019 | | | | | | | | | | |

| Proved developed | | 201 | | | 3,377 | | | 82 | | | 846 | |

| Proved undeveloped | | 157 | | | 3,189 | | | 38 | | | 726 | |

| Total proved(a) | | 358 | | | 6,566 | | | 120 | | | 1,572 | |

| | |

| --- | --- |

| (b) | Estimated future net revenue represents the estimated future revenue to be generated from the production of proved reserves, net of estimated production and future development costs, using pricing differentials and costs under existing economic conditions as of December 31, 2019, and assuming commodity prices as set forth below. For the purpose of determining prices used in our reserve reports, we used the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended December 31, 2019. The prices used in our PV-10 measure were $55.69 of oil and $2.58 of natural gas, before basis differential adjustments. These prices should not be interpreted as a prediction of future prices, nor do they reflect the value of our commodity derivative instruments in place as of December 31, 2019. The amounts shown do not give effect to non-property-related expenses, such as corporate general and administrative expenses and debt service, or to depreciation, depletion and amortization. The present value of estimated future net revenue typically differs from the standardized measure because the former does not include the effects of estimated future income tax expense of $15 million as of December 31, 2019. |

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| --- | --- | --- | --- |

| Developed | | (167 | ) |

We added 185 mmboe of proved undeveloped reserves through extensions and discoveries primarily due to an updated five-year development plan.

We recorded a downward revision of 128 mmboe from previous estimates due to lateral length adjustments, performance, updates to our five-year development plan and changes in commodity prices.

The amount and timing of these expenditures will depend on a number of factors, including actual drilling results, service costs, commodity prices and the availability of capital.

Our developmental drilling schedules are subject to revision and reprioritization throughout the year resulting from unknowable factors such as unexpected developmental drilling results, title issues and infrastructure availability or constraints.

In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revision of these estimates, and these revisions may be material.

| • | We follow comprehensive SEC-compliant internal policies to estimate and report proved reserves. Reserve estimates are made by experienced reservoir engineers or under their direct supervision. All material changes are reviewed and approved by Corporate Reserves Engineers. |

| • | registered professional geologist license in the Commonwealth of Pennsylvania; |

| • | member in good standing of the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers; and |

| • | Bachelor of Science degree in Geological Sciences. |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Marcellus | | 547 | | | 350 | | | 253 | | | 172 | | | 16 | | | 16 | | | 816 | | | 538 | |

| Haynesville | | 293 | | | 263 | | | 36 | | | 29 | | | 1 | | | 1 | | | 330 | | | 293 | |

| Eagle Ford | | 310 | | | 186 | | | 68 | | | 46 | | | — | | | — | | | 378 | | | 232 | |

| Brazos Valley | | 411 | | | 321 | | | 302 | | | 156 | | | — | | | — | | | 713 | | | 477 | |

| Powder River Basin | | 96 | | | 77 | | | 166 | | | 128 | | | 1 | | | 1 | | | 263 | | | 206 | |

| Mid-Continent | | 900 | | | 582 | | | 211 | | | 138 | | | 17 | | | 16 | | | 1,128 | | | 736 | |

We [removed: are] [added: were] involved in a number of litigation and regulatory proceedings [removed: including those described below.][added: as of the Petition Date.]

Many of these proceedings [removed: are] [added: were] in early stages, and many of them [removed: seek or may seek] [added: sought] damages and penalties, the amount of which is currently indeterminate.

See [Note [removed: 6](#s9EFCCF5BF88C55D9B5003DAB6C06D6EC)] [added: 6](#i95c607e4b20b4cc39273cc5a1e5634ef_175)] of the notes to our consolidated financial statements included in Item 8 of this report for information regarding our estimation and provision for potential losses related to litigation and regulatory proceedings.

[removed: Plaintiffs] [added: Royalty plaintiffs] have varying [removed: royalty] provisions in their respective leases, oil and gas law varies from state to state, and royalty owners and producers differ in their interpretation of the legal effect of lease provisions governing royalty calculations.

We are currently defending numerous lawsuits seeking damages with respect to underpayment of royalties or other shares of the proceeds of production in multiple states where we have operated, including [removed: the matters set forth] [added: those discussed] below.

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

[added: The lawsuit, which primarily relates to the Marcellus Shale and] Utica Shale, alleges that we violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) by making improper deductions and entering into arrangements with affiliates that resulted in underpayment of royalties.

We [removed: intend to] [added: are] vigorously [removed: defend] [added: defending] these claims.

Putative statewide class actions in Pennsylvania and Ohio and purported class arbitrations in Pennsylvania have been filed on behalf of royalty owners asserting various claims for damages related to alleged underpayment of royalties as a result of [removed: our] [added: the] divestiture of substantially all of our midstream business and most of our gathering assets in 2012 and 2013.

On December 20, 2017 and August 9, 2018, we reached tentative settlements to resolve [removed: substantially] all Pennsylvania civil royalty cases for a total [added: at that time] of approximately $36 million.

[removed: Resolution] [added: In addition to these steps, resolution] of the matter may result in monetary sanctions of more than [removed: $100,000.][added: $300,000.]

*Chapter 11 Proceedings*

Commencement of the Chapter 11 Cases automatically stayed the proceedings and actions against us that are described below, in addition to actions seeking to collect pre-petition indebtedness or to exercise control over the property of the Company’s bankruptcy estates.

The Plan in the Chapter 11 Cases, which became effective on February 9, 2021, provided for the treatment of claims against the Company’s bankruptcy estates, including pre-petition liabilities that had not been satisfied or addressed during the Chapter 11 Cases.

See [Note 2](#i95c607e4b20b4cc39273cc5a1e5634ef_160) of the notes to our consolidated financial statements included in Item 8 of this report for additional information.

The majority of these prepetition legal proceedings, including the matters below, have been settled during the Chapter 11 Cases or will be resolved in connection with the claims reconciliation process before the Bankruptcy Court.

Any allowed claim related to such prepetition litigation will be treated in accordance with the Plan.

Subsequent to our Bankruptcy Filing the parties reopened settlement discussions.

We believe losses are reasonably possible in certain of the pending royalty cases for which we have not accrued a loss contingency, but we are currently unable to estimate an amount or range of loss or the impact the actions could have on our future results of operations or cash flows.

Uncertainties in pending royalty cases generally include the complex nature of the claims and defenses, the potential size of the class in class actions, the scope and types of the properties and agreements involved, and the applicable production years.

On January 29, 2020, a well control incident occurred at one of our wellsites in Burleson County, Texas, causing the deaths of three of our contractors’ employees and injuring a fourth.

In connection with this incident, eleven lawsuits have been brought against us and our contractors alleging negligence, gross negligence, and breach of contract, and seeking wrongful death damages, survival statute damages, exemplary damages, and interest.

Ten of the suits have been filed in Dallas County, Texas.

A joint motion to consolidate filed by all the parties in nine of the ten Dallas County lawsuits is currently pending before the Texas Multidistrict Litigation Panel.

The

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

eleventh suit is pending in Burleson County, Texas.

The proceedings are in their early stages and are all stayed due to the pending bankruptcy.

Our general and excess liability insurance policies provide coverage for third party bodily injury and wrongful death claims, and the contracts between us and our contractors with respect to the well contain customary cross-indemnification provisions.

*Environmental Contingencies*

The nature of the oil and gas business carries with it certain environmental risks for us and our subsidiaries.

We have implemented various policies, programs, procedures, training and audits to reduce and mitigate such environmental risks.

We conduct periodic reviews, on a company-wide basis, to assess changes in our environmental risk profile.

Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable.

We manage our exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and address the potential liability.

Depending on the extent of an identified environmental concern, we may, among other things, exclude a property from the transaction, require the seller to remediate the property to our satisfaction in an acquisition or agree to assume liability for the remediation of the property.

Any allowed claim related to such prepetition litigation will be treated in accordance with the Plan.

We are in discussions with the Pennsylvania Department of Environmental Protection (PADEP) regarding gas migration in the vicinity of certain of our wells in Wyoming County, Pennsylvania.

We believe we are close to identifying agreed-upon steps to resolve PADEP’s concerns regarding the issue.

*Other Matters*

Based on management’s current assessment, we are of the opinion that no pending or threatened lawsuit or dispute relating to our business operations is likely to have a material adverse effect on our future consolidated financial position, results of operations or cash flows.

The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates.

The lawsuit, which primarily relates to the Marcellus Shale and

In February 2019, a putative class action lawsuit in the District Court of Dallas County, Texas was filed against FTS International, Inc. (“FTSI”), certain investment banks, FTSI’s directors including certain of our officers and certain shareholders of FTSI including us.

The lawsuit alleges various violations of Sections 11 (with respect to certain of our officers in their capacities as directors of FTSI) and 15 (with respect to such officers and us) of the Securities Act of 1933 in connection with public disclosure made during the initial public offering of FTSI.

The suit seeks damages in excess of $1,000,000 and attorneys’ fees and other expenses.

*Environmental Proceedings*

Our subsidiary Chesapeake Appalachia, LLC (CALLC) is engaged in discussions with the EPA, the USACE and the Pennsylvania Department of Environmental Protection (PADEP) regarding potential violations of the permitting requirements of the federal CWA, the Pennsylvania Clean Streams Law and the Pennsylvania Dam Safety and Encroachments Act in connection with the placement of dredge and fill material during construction of certain sites in Pennsylvania.

CALLC identified the potential violations in connection with an internal review of its facilities siting and construction processes and voluntarily reported them to the regulatory agencies.

On December 27, 2016, we received a Finding of Violation from the EPA alleging violations of the CAA at a number of locations in Ohio.

We have exchanged information with the EPA and are engaged in discussions aimed at resolving the allegations.

We received another Finding of Violation from EPA on December 20, 2018 alleging violations of the CAA and violations of the Ohio State Implementation Plan at a number of our Ohio facilities.

We are in discussions with EPA aimed at resolving the allegations.

Resolution of this matter may result in monetary sanctions of more than $100,000.

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| --- | --- |

[removed: FORM 10-K][added: FORM 10-K]

☒ [removed: ANNUAL REPORT] [added: ANNUAL REPORT] PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, [removed: 2019][added: 2020]

Commission File [removed: No. 1-13726][added: No. 001-13726]

| Oklahoma | | | [added: | | | | | |] 73-1395733 | | [added: | | | |]

| (State or other jurisdiction of incorporation or organization) | | | [added: | | | | | |] (I.R.S. Employer Identification No.) | | [added: | | | |]

| 6100 North Western Avenue, | [added: | |] Oklahoma City, | [added: | |] Oklahoma | [added: | |] 73118 | | [added: | | | |]

| (Address of principal executive offices) | | | [added: | | | | | |] (Zip Code) | | [added: | | | |]

| | | [added: | | | |] (405) | [added: | |] 848-8000 | | [added: | | | |]

| (Registrant’s telephone number, including area code) | | | | | [added: | | | | | | | | | |]

| Securities Registered Pursuant to Section 12(b) of the Act: | | | | | [added: | | | | | | | | | |]

| Title of Each Class | | [added: | | | |] Trading [removed: Symbol(s)] [added: Symbol] | | [added: | | | |] Name of Each Exchange on Which Registered | [added: | |]

| Common Stock, [added: $0.01] par value [removed: $0.01] [added: per share] | | [added: | | | |] CHK | | [removed: New York] [added: | | | | The Nasdaq] Stock [removed: Exchange] [added: Market LLC] | [added: | |]

Large Accelerated Filer [removed: ☒] [added: ☐] Accelerated Filer ☐ Non-accelerated Filer [removed: ☐][added: ☒]

Smaller Reporting Company [removed: ☐] [added: ☒] Emerging Growth Company ☐

The aggregate market value of our common stock held by non-affiliates on June [removed: 28, 2019,] [added: 30, 2020,] was approximately [removed: $2.2 billion.][added: $48 million.]

As of February [removed: 19, 2020,] [added: 25, 2021,] there were [removed: 1,954,583,780] [added: 97,907,081] shares of our $0.01 par value common stock outstanding.

Portions of the proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Shareholders are incorporated by reference in Part III.

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| [Item [removed: 5.](#s7bfc34e6bef24de5907007db7171b0c9)] [added: 5.](#i95c607e4b20b4cc39273cc5a1e5634ef_94)] | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s7bfc34e6bef24de5907007db7171b0c9)] [added: Securities](#i95c607e4b20b4cc39273cc5a1e5634ef_94)] | | [removed: [35](#s7bfc34e6bef24de5907007db7171b0c9)] | | [added: | | [40](#i95c607e4b20b4cc39273cc5a1e5634ef_94) | | | | | |]

| [Item [removed: 6.](#s159CB1D7B3EA5A08B517624ACFD860F2)] [added: 6.](#i95c607e4b20b4cc39273cc5a1e5634ef_97)] | [added: | |] [Selected Financial [removed: Data](#s159CB1D7B3EA5A08B517624ACFD860F2)] [added: Data](#i95c607e4b20b4cc39273cc5a1e5634ef_97)] | | [removed: [36](#s159CB1D7B3EA5A08B517624ACFD860F2)] | | [added: | | [41](#i95c607e4b20b4cc39273cc5a1e5634ef_97) | | | | | |]

| [Item [removed: 7.](#sD7C6A8E5B6FC5FEEB89AA86676F4F35D)] [added: 7.](#i95c607e4b20b4cc39273cc5a1e5634ef_100)] | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD7C6A8E5B6FC5FEEB89AA86676F4F35D)] [added: Operations](#i95c607e4b20b4cc39273cc5a1e5634ef_100)] | | [removed: [37](#sD7C6A8E5B6FC5FEEB89AA86676F4F35D)] | | [added: | | [42](#i95c607e4b20b4cc39273cc5a1e5634ef_100) | | | | | |]

| | [added: | |] [Liquidity and Capital [removed: Resources](#s59C95F50BFD155F1B8E50DEE093413B4)] [added: Resources](#i95c607e4b20b4cc39273cc5a1e5634ef_106)] | | [removed: [38](#s59C95F50BFD155F1B8E50DEE093413B4)] | | [added: | | [45](#i95c607e4b20b4cc39273cc5a1e5634ef_106) | | | | | |]

| | [added: | |] [Results of Operations, for the Years Ended December 31, 2019, 2018 and [removed: 2017](#sADEECF82FE51582EA430477E928CE986)] [added: 2017](#i95c607e4b20b4cc39273cc5a1e5634ef_109)] | | [removed: [45](#sADEECF82FE51582EA430477E928CE986)] | | [added: | | [52](#i95c607e4b20b4cc39273cc5a1e5634ef_109) | | | | | |]

| [Item [removed: 7A.](#s38c75550d88346eeac8a10b4aa4e8cfe)] [added: 7A.](#i95c607e4b20b4cc39273cc5a1e5634ef_118)] | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s38c75550d88346eeac8a10b4aa4e8cfe)] [added: Risk](#i95c607e4b20b4cc39273cc5a1e5634ef_118)] | | [removed: [56](#s38c75550d88346eeac8a10b4aa4e8cfe)] | | [added: | | [63](#i95c607e4b20b4cc39273cc5a1e5634ef_118) | | | | | |]

| [Item [removed: 8](#s2CB4232629285087979D88ED927DE512).] [added: 8](#i95c607e4b20b4cc39273cc5a1e5634ef_121).] | [added: | |] [Financial Statements and Supplementary [removed: Data](#s2CB4232629285087979D88ED927DE512)] [added: Data](#i95c607e4b20b4cc39273cc5a1e5634ef_121)] | | [removed: [60](#s2CB4232629285087979D88ED927DE512)] | | [added: | | [64](#i95c607e4b20b4cc39273cc5a1e5634ef_121) | | | | | |]

| [Item [removed: 9.](#s083c1993908e463180e388e51d43a29d)] [added: 9.](#i95c607e4b20b4cc39273cc5a1e5634ef_274)] | [added: | |] [Changes In and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s083c1993908e463180e388e51d43a29d)] [added: Disclosure](#i95c607e4b20b4cc39273cc5a1e5634ef_274)] | | [removed: [145](#s083c1993908e463180e388e51d43a29d)] | | [added: | | [139](#i95c607e4b20b4cc39273cc5a1e5634ef_274) | | | | | |]

| [Item [removed: 9A.](#s2cddb50a39c84d18b5ae14f427497552)] [added: 9A.](#i95c607e4b20b4cc39273cc5a1e5634ef_277)] | [added: | |] [Controls and [removed: Procedures](#s2cddb50a39c84d18b5ae14f427497552)] [added: Procedures](#i95c607e4b20b4cc39273cc5a1e5634ef_277)] | | [removed: [145](#s2cddb50a39c84d18b5ae14f427497552)] | | [added: | | [139](#i95c607e4b20b4cc39273cc5a1e5634ef_277) | | | | | |]

| [Item [removed: 9B.](#s63496b9e028046f3b58d78d8d38a331b)] [added: 9B.](#i95c607e4b20b4cc39273cc5a1e5634ef_280)] | [added: | |] [Other [removed: Information](#s63496b9e028046f3b58d78d8d38a331b)] [added: Information](#i95c607e4b20b4cc39273cc5a1e5634ef_280)] | | [removed: [145](#s63496b9e028046f3b58d78d8d38a331b)] | | [added: | | [140](#i95c607e4b20b4cc39273cc5a1e5634ef_280) | | | | | |]

| | [removed: [PART III](#s9C5D545E1AD7507D885F23FE251FD2CD)] | | [added: PART III] | | [added: | | | | | | | | | |]

| [Item [removed: 10.](#sad07624ef33a4ff1882c4d0c049b2e82)] [added: 10.](#i95c607e4b20b4cc39273cc5a1e5634ef_286)] | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#sad07624ef33a4ff1882c4d0c049b2e82)] [added: Governance](#i95c607e4b20b4cc39273cc5a1e5634ef_286)] | | [removed: [145](#sad07624ef33a4ff1882c4d0c049b2e82)] | | [added: | | [140](#i95c607e4b20b4cc39273cc5a1e5634ef_286) | | | | | |]

| [Item [removed: 11.](#sd175cf424496489ebe6a089663e892a6)] [added: 11.](#i95c607e4b20b4cc39273cc5a1e5634ef_289)] | [added: | |] [Executive [removed: Compensation](#sd175cf424496489ebe6a089663e892a6)] [added: Compensation](#i95c607e4b20b4cc39273cc5a1e5634ef_289)] | | [removed: [145](#sd175cf424496489ebe6a089663e892a6)] | | [added: | | [140](#i95c607e4b20b4cc39273cc5a1e5634ef_289) | | | | | |]

| [Item [removed: 12.](#se352d645975d4128aa56fe825dc8c290)] [added: 12.](#i95c607e4b20b4cc39273cc5a1e5634ef_292)] | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#se352d645975d4128aa56fe825dc8c290)] [added: Matters](#i95c607e4b20b4cc39273cc5a1e5634ef_292)] | | [removed: [145](#se352d645975d4128aa56fe825dc8c290)] | | [added: | | [140](#i95c607e4b20b4cc39273cc5a1e5634ef_292) | | | | | |]

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| Class A Warrants to purchase Common Stock | | | | | | CHKEW | | | | | | The Nasdaq Stock Market LLC | | |

| Class B Warrants to purchase Common Stock | | | | | | CHKEZ | | | | | | The Nasdaq Stock Market LLC | | |

| Class C Warrants to purchase Common Stock | | | | | | CHKEL | | | | | | The Nasdaq Stock Market LLC | | |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

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| [Signatures](#i95c607e4b20b4cc39273cc5a1e5634ef_310) | | | | | | | | | [144](#i95c607e4b20b4cc39273cc5a1e5634ef_310) | | | | | |

*Bankruptcy Code*.

Means title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as amended.

*Bankruptcy Court.* The United States Bankruptcy Court for the Southern District of Texas.

*Chapter 11 Cases.* When used with reference to a particular Debtor, the case pending for that Debtor under chapter 11 of the Bankruptcy Code in the Bankruptcy Court and when used with reference to all the Debtors, the procedurally consolidated chapter 11 cases pending for the Debtors in the Bankruptcy Court.

*Confirmation Order*.

The order confirming the Fifth Amended Joint Chapter 11 Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates, \[Docket No. 2915\] entered by the Bankruptcy Court on January 16, 2021.

*Debtors*.

The Company, together with all of its direct and indirect subsidiaries that have filed the Chapter 11 Cases.

*Effective Date*.

The first date, February 9, 2021, upon which all conditions precedent to the effectiveness of the Plan have been satisfied or waived in accordance with the Plan and no stay of the Confirmation Order is in effect.

*Exit Credit Facility.* The reserve-based revolving credit facility available upon emergence from bankruptcy.

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

*Petition Date.* June 28, 2020, the date on which the Debtors commenced the Chapter 11 Cases.

*Plan.* The Fifth Amended Joint Chapter 11 Plan of Reorganization of Chesapeake Energy Corporation and its Debtor Affiliates, attached as Exhibit A to the Confirmation Order.

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

*Restructuring*.

The financial restructuring of our debt and equity interests as of the date of the Plan, and certain other obligations pursuant to the Plan.

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

only recourse is to the reserves acquired); (iv) transfers title of the reserves to the purchaser; and (v) allows the seller to retain the remaining reserves, if any, after the scheduled production volumes have been delivered.

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

- the ability to execute on our business strategy following emergence from bankruptcy;

- the impact of the COVID-19 pandemic and its effect on our business, financial condition, employees, contractors, vendors and the global demand for oil and natural gas and U.S. and world financial markets;

- our ability to realize our anticipated annualized cash cost reductions;

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

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| --- | --- | --- | --- | --- |

| 6.625% Senior Notes due 2020 | | CHK20A | | New York Stock Exchange |

| 6.875% Senior Notes due 2020 | | CHK20 | | New York Stock Exchange |

| 6.125% Senior Notes due 2021 | | CHK21 | | New York Stock Exchange |

| 5.375% Senior Notes due 2021 | | CHK21A | | New York Stock Exchange |

| 4.875% Senior Notes due 2022 | | CHK22 | | New York Stock Exchange |

| 5.75% Senior Notes due 2023 | | CHK23 | | New York Stock Exchange |

| 4.5% Cumulative Convertible Preferred Stock | | CHK Pr D | | New York Stock Exchange |

| [Signatures](#saed4531f5b4e43a4ba48590c5f47c2e6) | | | [153](#saed4531f5b4e43a4ba48590c5f47c2e6) | |

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| • | effects of acquisitions and dispositions, including our acquisition of WildHorse and our ability to realize related synergies and cost savings; |

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| --- | --- |

[removed: Information regarding our properties is included in Item 1] [added: Business] and in the Supplementary Information included in Item 8 of this report.

Information regarding our properties is included in Item 1.

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| --- | --- |

The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17CFR 229.104) is included in Exhibit 95.1 to this [removed: Annual Report on] Form 10-K.

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

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| ITEM 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |

Common Stock

Our common stock trades on the NYSE under the symbol "CHK".

Shareholders

As of February 19, 2020, there were approximately 1,940 holders of record of our common stock and approximately 308,000 beneficial owners.

Dividends

We ceased paying dividends on our common stock in the 2015 third quarter and do not intend to resume paying cash dividends on our common stock in the foreseeable future.

Our revolving credit facility and the certificates of designation for our preferred stock contain restrictions on our ability to declare and pay cash dividends on our common or preferred stock if an event of default has occurred.

The certificates of designation for our preferred stock prohibit payment of cash dividends on our common stock unless we have declared and paid (or set apart for payment) full accumulated dividends on the preferred stock.

After suspending the payment of dividends on our outstanding convertible preferred stock during fiscal year 2016, we reinstated the payment of dividends on each series of our outstanding convertible preferred stock beginning with the dividends payable in the 2017 first quarter and paid all dividends in arrears.

Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information about repurchases of our common stock during the quarter ended December 31, 2019:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | Total Number of Shares Purchased(a) | | | Average Price Paid Per Share(a) | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | |

| | | | | | | | | | | | | ($ in millions) | | |

| October 1, 2019 through October 31, 2019 | | 44,323 | | | $ | 1.44 | | | — | | | $ | — | |

| November 1, 2019 through November 30, 2019 | | — | | | $ | — | | | — | | | $ | — | |

| December 1, 2019 through December 31, 2019 | | — | | | $ | — | | | — | | | $ | — | |

| Total | | 44,323 | | | $ | — | | | — | | | | | |

___________________________________________

| (a) | Includes shares of common stock purchased on behalf of our deferred compensation plan. |

Common Stock

Our common stock was previously listed on the New York Stock Exchange (the “NYSE”) under the symbol “CHK.” As a result of our failure to satisfy the continued listing requirements of the NYSE, on June 29, 2020, our common stock ceased to trade on the NYSE.

Since June 30, 2020, our common stock has been quoted on the OTC Pink Marketplace maintained by the OTC Markets Group, Inc. under the symbol “CHKAQ.” On July 20, 2020, the NYSE filed a Form 25 with the SEC to delist our common stock, senior notes and cumulative convertible preferred stock from the NYSE.

The delisting was effective 10 days after the Form 25 was filed and our common stock, senior notes and cumulative convertible preferred stock were deregistered under Section 12(b) of the Exchange Act on October 18, 2020.

Our common stock was canceled on February 9, 2021 as a result of our Chapter 11 proceedings.

On February 9, 2021, subsequent to our emergence from Bankruptcy, there were 97,906,968 outstanding shares of common stock of the Successor listed on the Nasdaq Stock Market LLC under the symbol CHK.

In addition, on February 9, 2021, we had 11,111,111 Class A Warrants, 12,345,679 Class B Warrants and 9,768,527 Class C Warrants outstanding that are exercisable for one share of common stock per warrant at the initial exercise prices of $27.63, $32.13 and $36.18 per share, respectively.

The warrants are immediately exercisable and will expire on February 9, 2026.

Dividends

We ceased paying dividends on our common stock in the third quarter of 2015.

Unregistered Sales of Equity Securities and Use of Proceeds

There were no repurchases or unregistered sales of our common stock during the quarter ended December 31, 2020.

Shareholders

As of February 25, 2021, there were approximately 122 holders of record of our common stock.

[TABLE OF CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)

The following table sets forth selected consolidated financial data of Chesapeake as of and for the years ended December 31, [added: 2020,] 2019, 2018, [removed: 2017, 2016] [added: 2017] and [removed: 2015.][added: 2016.]

See [removed: [Notes 1](#sC7C4FA668F9552D5B9ABF0E64A4C7A72) and [2](#s5CE524823841503782AD9252035013B5)] [added: [Note](#i95c607e4b20b4cc39273cc5a1e5634ef_196) [11](#i95c607e4b20b4cc39273cc5a1e5634ef_196)] of the notes to our consolidated financial statements included in Item 8 of this report for [removed: further discussion of the change in accounting principle.][added: additional information.]

| | | [added: | | | |] Years Ended December 31, | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| | | [added: | | | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [removed: 2017] | | [added: 2017] | | [removed: 2016] | | | | [removed: 2015] [added: 2016] | | |

| | | [added: | | | |] ($ in millions, except per share data) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| STATEMENT OF OPERATIONS DATA: | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Total revenues | | [added: | | | |] $ | [removed: 8,595] [added: 5,296] | | | [added: | |] $ | [removed: 10,030] [added: 8,595] | | | [added: | |] $ | [removed: 10,039] [added: 10,030] | | | [added: | |] $ | [removed: 8,705] [added: 10,039] | | | [added: | |] $ | [removed: 13,794] [added: 8,705] | |

| Net income (loss) available to common stockholders(a) | | [added: | | | |] $ | [removed: (416] [added: (9,756)] | [removed: )] | | [added: | |] $ | [removed: 133] [added: (416)] | | | [added: | |] $ | [removed: (631] [added: 133] | [removed: )] | | [added: | |] $ | [removed: (4,018] [added: (631)] | [removed: )] | | [added: | |] $ | [removed: (11,383] [added: (4,018)] | [removed: )] |

| EARNINGS (LOSS) PER COMMON [removed: SHARE:] [added: SHARE:(b)] | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| CASH DIVIDEND DECLARED PER COMMON SHARE | | [added: | | | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: 0.0875] [added: —] | |

| BALANCE SHEET DATA (AT END OF PERIOD): | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| Total assets | | [added: | | | |] $ | [removed: 16,193] [added: 6,584] | | | [added: | |] $ | [removed: 12,735] [added: 16,193] | | | [added: | |] $ | [removed: 14,925] [added: 12,735] | | | [added: | |] $ | [removed: 17,048] [added: 14,925] | | | [added: | |] $ | [removed: 21,432] [added: 17,048] | |

| Long-term debt, net of current maturities | | [added: | | | |] $ | [removed: 9,073] [added: —] | | | [added: | |] $ | [removed: 7,341] [added: 9,073] | | | [added: | |] $ | [removed: 9,921] [added: 7,341] | | | [added: | |] $ | [removed: 9,938] [added: 9,921] | | | [added: | |] $ | [removed: 10,311] [added: 9,938] | |

| Total equity [added: (deficit)] | | [added: | | | |] $ | [removed: 4,401] [added: (5,341)] | | | [added: | |] $ | [removed: 2,133] [added: 4,401] | | | [added: | |] $ | [removed: 1,943] [added: 2,133] | | | [added: | |] $ | [removed: 2,565] [added: 1,943] | | | [added: | |] $ | [removed: 5,256] [added: 2,565] | |

[removed: |] (a) [removed: |] Includes [added: $8.535 billion,] $11 million, $131 million, $814 [removed: million, $563] million and [removed: $11.590 billion] [added: $563 million] of impairments of oil and gas properties and other fixed assets for the years ended December 31, [added: 2020,] 2019, 2018, [removed: 2017, 2016] [added: 2017] and [removed: 2015,] [added: 2016,] respectively. [removed: |]

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

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| Basic | | | | | | $ | (998.26) | | | | | $ | (49.97) | | | | | $ | 29.26 | | | | | $ | (139.32) | | | | | $ | (1,051.83) | |

| Diluted | | | | | | $ | (998.26) | | | | | $ | (49.97) | | | | | $ | 29.26 | | | | | $ | (139.32) | | | | | $ | (1,051.83) | |

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(b) Amounts have been retroactively adjusted to reflect a 1-for-200 (1:200) reverse stock split effective April 14, 2020.

Financial information for prior periods has been recast to reflect retrospective application of the successful efforts method of accounting.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Basic | | $ | (0.25 | ) | | $ | 0.15 | | | $ | (0.70 | ) | | $ | (5.26 | ) | | $ | (17.18 | ) |

| Diluted | | $ | (0.25 | ) | | $ | 0.15 | | | $ | (0.70 | ) | | $ | (5.26 | ) | | $ | (17.18 | ) |

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| --- | --- |

| | [added: | |] INDEX TO FINANCIAL [removed: STATEMENTS CHESAPEAKE] [added: STATEMENTS CHESAPEAKE] ENERGY [removed: CORPORATION] [added: CORPORATION (DEBTOR-IN-POSSESSION)] | | | | [added: | | | | | | | |]

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| [Report of Independent Registered Public Accounting [removed: Firm](#sC9F78F185827547AB882D35521EF3A26)] [added: Firm](#i95c607e4b20b4cc39273cc5a1e5634ef_127)] | | | [removed: [63](#sC9F78F185827547AB882D35521EF3A26)] | | [added: | | | | [66](#i95c607e4b20b4cc39273cc5a1e5634ef_127) | | | | | |]

| Consolidated Financial Statements: | | | | | [added: | | | | | | | | | |]

| | [added: | |] [Consolidated Balance [removed: Sheets](#s438A5A5B760C5752BA38B754B358846B)] [added: Sheets](#i95c607e4b20b4cc39273cc5a1e5634ef_130)] as of December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] | | [removed: [67](#s438A5A5B760C5752BA38B754B358846B)] | | [added: | | [69](#i95c607e4b20b4cc39273cc5a1e5634ef_130) | | | | | |]

| | [added: | |] [Consolidated Statements of [removed: Operations](#s07F862AC712D5968BEC58B8C638D0E3F)] [added: Operations](#i95c607e4b20b4cc39273cc5a1e5634ef_136)] for the Years Ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] | | [removed: [69](#s07F862AC712D5968BEC58B8C638D0E3F)] | | [added: | | [71](#i95c607e4b20b4cc39273cc5a1e5634ef_136) | | | | | |]

| | [added: | |] [Consolidated Statements of Comprehensive Income [removed: (Loss)](#s351F3AFF2A6F587D8BEA52DF21113083)] [added: (Loss)](#i95c607e4b20b4cc39273cc5a1e5634ef_139)] for the Years Ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] | | [removed: [70](#s351F3AFF2A6F587D8BEA52DF21113083)] | | [added: | | [72](#i95c607e4b20b4cc39273cc5a1e5634ef_139) | | | | | |]

| | [added: | |] [Consolidated Statements of Cash [removed: Flows](#sFA503CCFA84F596D88286F2F1E681B57)] [added: Flows](#i95c607e4b20b4cc39273cc5a1e5634ef_145)] for the Years Ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] | | [removed: [71](#sFA503CCFA84F596D88286F2F1E681B57)] | | [added: | | [73](#i95c607e4b20b4cc39273cc5a1e5634ef_145) | | | | | |]

| | [added: | |] [Consolidated Statements of Stockholders’ [removed: Equity](#sACFD04A538A550F0A24BB68BCD44FC15)] [added: Equity](#i95c607e4b20b4cc39273cc5a1e5634ef_148)] for the Years Ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] | | [removed: [73](#sACFD04A538A550F0A24BB68BCD44FC15)] | | [added: | | [75](#i95c607e4b20b4cc39273cc5a1e5634ef_148) | | | | | |]

| Notes to the Consolidated Financial Statements: | | | | | [added: | | | | | | | | | |]

[removed: | | [Note 1.] Basis of Presentation and Summary of Significant Accounting [removed: Policies](#sC7C4FA668F9552D5B9ABF0E64A4C7A72) | | [75](#sC7C4FA668F9552D5B9ABF0E64A4C7A72) | |][added: Policies]

| [removed: | [Note 2. Change] [added: Cumulative effect of change] in [removed: Accounting Principle](#s5CE524823841503782AD9252035013B5)] [added: accounting principle] | | [removed: [82](#s5CE524823841503782AD9252035013B5)] | | [added: | | — | | | | | | — | | | | | | (8) | | |]

[removed: | | [Note 3.] Oil and Natural Gas Property [removed: Transactions](#s6C24CA5E58825CA3A04F97A858628395) | | [91](#s6C24CA5E58825CA3A04F97A858628395) | |][added: Transactions]

[removed: | | [Note 4.] Earnings [removed: per Share](#s4D92F1335D2E5ED38821491F256C8C05) | | [94](#s4D92F1335D2E5ED38821491F256C8C05) | |][added: Per Share]

| | [added: | |] [Note 5. [removed: Debt](#s5D137AEEA9A851B8B3C3DB703BCD831D)] [added: Debt](#i95c607e4b20b4cc39273cc5a1e5634ef_169)] | | [removed: [95](#s5D137AEEA9A851B8B3C3DB703BCD831D)] | | [added: | | [92](#i95c607e4b20b4cc39273cc5a1e5634ef_169) | | | | | |]

| | [added: | |] [Note 6. Contingencies and [removed: Commitments](#s9EFCCF5BF88C55D9B5003DAB6C06D6EC)] [added: Commitments](#i95c607e4b20b4cc39273cc5a1e5634ef_175)] | | [removed: [101](#s9EFCCF5BF88C55D9B5003DAB6C06D6EC)] | | [added: | | [99](#i95c607e4b20b4cc39273cc5a1e5634ef_175) | | | | | |]

[removed: | | [Note 7.] Other [removed: Liabilities](#s3719DECD192C5C92A8DD5297F971C3BD) | | [103](#s3719DECD192C5C92A8DD5297F971C3BD) | |][added: Liabilities]

[removed: | | [Note 9.] Revenue [removed: Recognition](#s1B97998F662858408C4A150EBAE8C1AF) | | [106](#s1B97998F662858408C4A150EBAE8C1AF) | |][added: Recognition]

| | [added: | |] [Note 10. Income [removed: Taxes](#s28236513BF6756ADB6839DA93E4629FF)] [added: Taxes](#i95c607e4b20b4cc39273cc5a1e5634ef_190)] | | [removed: [108](#s28236513BF6756ADB6839DA93E4629FF)] | | [added: | | [106](#i95c607e4b20b4cc39273cc5a1e5634ef_190) | | | | | |]

| | [added: | |] [Note 12. Share-Based [removed: Compensation](#s7C376DDD52025594AF62918778CB4B5D)] [added: Compensation](#i95c607e4b20b4cc39273cc5a1e5634ef_202)] | | [removed: [114](#s7C376DDD52025594AF62918778CB4B5D)] | | [added: | | [113](#i95c607e4b20b4cc39273cc5a1e5634ef_202) | | | | | |]

| | [added: | |] [Note 13. Employee Benefit [removed: Plans](#s78545594DFE1567286CD290F987C37AD)] [added: Plans](#i95c607e4b20b4cc39273cc5a1e5634ef_208)] | | [removed: [118](#s78545594DFE1567286CD290F987C37AD)] | | [added: | | [117](#i95c607e4b20b4cc39273cc5a1e5634ef_208) | | | | | |]

| | [added: | |] [Note 14. Derivative and Hedging [removed: Activities](#sF6FF4D83C9BA56118FB13A517F864CAC)] [added: Activities](#i95c607e4b20b4cc39273cc5a1e5634ef_214)] | | [removed: [119](#sF6FF4D83C9BA56118FB13A517F864CAC)] | | [added: | | [118](#i95c607e4b20b4cc39273cc5a1e5634ef_214) | | | | | |]

[removed: | | [Note 16.] Capitalized Exploratory Well [removed: Costs](#sDACD73D148B45457B26875DFD985C3D3) | | [125](#sDACD73D148B45457B26875DFD985C3D3) | |][added: Costs]

| [removed: | [Note 17.] Other [removed: Property] [added: property] and [removed: Equipment](#s45BDEBB7603F5B20A53EE6286F9F9118)] [added: equipment] | | [removed: [126](#s45BDEBB7603F5B20A53EE6286F9F9118)] | [added: 77] | [added: | |]

| | [added: | |] [Note 20. Other Operating [removed: Expense](#s6EA2FE9466AC5EF29710F61A14F218E4)] [added: Expense](#i95c607e4b20b4cc39273cc5a1e5634ef_238)] | | [removed: [127](#s6EA2FE9466AC5EF29710F61A14F218E4)] | | [added: | | [126](#i95c607e4b20b4cc39273cc5a1e5634ef_238) | | | | | |]

| | [added: | |] [Note 21. [removed: Restructuring] [added: Separation] and Other Termination [removed: Costs](#sB8B9EF2B68F45C2FBEF6157BC456B599)] [added: Costs](#i95c607e4b20b4cc39273cc5a1e5634ef_241)] | | [removed: [127](#sB8B9EF2B68F45C2FBEF6157BC456B599)] | | [added: | | [127](#i95c607e4b20b4cc39273cc5a1e5634ef_241) | | | | | |]

[removed: | | [Note 22. Asset] [added: 22. Asset] Retirement [removed: Obligations](#sD52D1A780A6F5BDAA40846940D8CAC15) | | [128](#sD52D1A780A6F5BDAA40846940D8CAC15) | |][added: Obligations]

| | [added: | |] [Note 23. Major [removed: Customers](#s707C7549E1E7554E8C0493995ADA15C1)] [added: Customers](#i95c607e4b20b4cc39273cc5a1e5634ef_247)] | | [removed: [128](#s707C7549E1E7554E8C0493995ADA15C1)] | | [added: | | [127](#i95c607e4b20b4cc39273cc5a1e5634ef_247) | | | | | |]

[removed: [TABLE] [added: [TABLE] OF [removed: CONTENTS](#sacd31288082644189dc9f32fd0d5ad4e)][added: CONTENTS](#i95c607e4b20b4cc39273cc5a1e5634ef_7)]

| Supplementary Information: | | | | | [added: | | | | | | | | | |]

| | [added: | |] [Quarterly Financial Data [removed: (unaudited)](#sD1BFEB85FCB3564682C4985CACBE5132)] [added: (unaudited)](#i95c607e4b20b4cc39273cc5a1e5634ef_268)] | | [removed: [138](#sD1BFEB85FCB3564682C4985CACBE5132)] | | [added: | | [132](#i95c607e4b20b4cc39273cc5a1e5634ef_268) | | | | | |]

| | [added: | |] [Supplemental Disclosures About Oil, Natural Gas and NGL Producing [removed: Activities](#sD2EC850D56085749A25F80A803DC9380) (unaudited)] [added: Activities](#i95c607e4b20b4cc39273cc5a1e5634ef_271) [(unaudited)](#i95c607e4b20b4cc39273cc5a1e5634ef_271)] | | [removed: [139](#sD2EC850D56085749A25F80A803DC9380)] | | [added: | | [133](#i95c607e4b20b4cc39273cc5a1e5634ef_271) | | | | | |]

Opinions on the Financial [removed: Statements and Internal Control over Financial Reporting][added: Statements]

We have audited the accompanying consolidated balance sheets of Chesapeake Energy Corporation and its subsidiaries (the “Company”) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the related consolidated statements of operations, of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] including the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements [removed: referred to above] present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019] [added: 2020] in conformity with accounting principles generally accepted in the United States of America.