Company Reports 2008 Third Quarter Net Income to Common Shareholders of $3.282 Billion, or $5.61 per Fully Diluted Common Share; Adjusted Net Income Available to Common Shareholders Is $486 Million, or $0.85 per Fully Diluted Common Share, an Increase of 47% Over 2007 Third Quarter

Company Reports 2008 Third Quarter Production of 2.3 Bcfe per Day, an Increase of 15% Over 2007 Third Quarter Production

Proved Reserves Reach 12.1 Tcfe and Increase 11% Year-to-Date on 1.2 Tcfe of Net Additions; Company Delivers First Three Quarters of 2008 Reserve Replacement Rate of 290% and a Drilling and Net Acquisition Cost of $1.35 per Mcfe

Chesapeake Energy Corporation (NYSE:CHK) today announced financial and operating results for the 2008 third quarter. For the quarter, Chesapeake reported net income to common shareholders of $3.282 billion ($5.61 per fully diluted common share), operating cash flow of $1.400 billion (defined as cash flow from operating activities before changes in assets and liabilities) and ebitda of $5.963 billion (defined as net income (loss) before income taxes, interest expense, and depreciation, depletion and amortization expense) on revenue of $7.491 billion and production of 214 billion cubic feet of natural gas equivalent (bcfe). The results above include the following items that are typically not included in published estimates of the company’s financial results by certain securities analysts:

• an unrealized noncash after-tax mark-to-market (MTM) gain of $2.846 billion from future period natural gas, oil and interest rate hedges primarily resulting from lower natural gas and oil prices as of September 30, 2008 compared to June 30, 2008;
• an after-tax loss of $19.0 million on the early redemption of the company’s $300 million 7.75% Senior Notes due 2015;
• an after-tax consent fee of $6.3 million paid to amend certain provisions contained in five of the company’s senior note indentures; and
• a reduction of net income available to common shareholders of $24.5 million resulting from exchanges of the company’s preferred stock for common stock that reduced future preferred stock dividend payment requirements.

Including the items noted above, Chesapeake reported adjusted net income to common shareholders during the quarter of $486 million ($0.85 per fully diluted common share) and adjusted ebitda of $1.386 billion, increases of 47% and 16%, respectively, over the 2007 third quarter. A reconciliation of operating cash flow, ebitda, adjusted ebitda and adjusted net income to comparable financial measures calculated in accordance with generally accepted accounting principles is presented on pages 14 – 17 of this release.

Key Operational and Financial Statistics Summarized

The table below summarizes Chesapeake’s key results during the 2008 third quarter and compares them to results during the 2008 second quarter and the 2007 third quarter.

(a) includes the effects of realized gains or (losses) from hedging, but does not include the effects of unrealized gains or (losses) from hedging

(b) excludes expenses associated with noncash stock-based compensation

(c) defined as cash flow provided by operating activities before changes in assets and liabilities

(d) defined as net income (loss) before income taxes, interest expense, and depreciation, depletion and amortization expense, as adjusted to remove the effects of certain items detailed on page 16

(e) defined as net income (loss) available to common shareholders, as adjusted to remove the effects of certain items detailed on page 16

2008 Third Quarter Average Daily Production Increases 15% over 2007 Third Quarter Production

Daily production for the 2008 third quarter averaged 2.321 bcfe, a decrease of 7 mmcfe, or 0.3%, over the 2.328 bcfe produced per day in the 2008 second quarter and an increase of 295 mmcfe, or 15%, over the 2.026 bcfe produced per day in the 2007 third quarter. Adjusted for the company’s year-end 2007, second quarter 2008 and third quarter 2008 VPP sales of 55, 47 and 47 mmcfe per day, respectively, and the company’s sale of Woodford Shale and Fayetteville Shale properties of 47 and 45 mmcfe per day, respectively, Chesapeake’s sequential and year-over-year production growth rates were 3% and 23%, respectively. In addition, during the quarter hurricane-related production curtailments totaled approximately 1.6 bcfe while voluntary production cutbacks due to low wellhead natural gas prices totaled approximately 0.6 bcfe.

Chesapeake’s average daily production for the 2008 third quarter consisted of 2.138 billion cubic feet of natural gas (bcf) and 30,543 barrels of oil and natural gas liquids (bbls). The company’s 2008 third quarter production of 213.5 bcfe was comprised of 196.7 bcf (92% on a natural gas equivalent basis) and 2.81 million barrels of oil and natural gas liquids (mmbbls) (8% on a natural gas equivalent basis).

Natural Gas and Oil Proved Reserves Reach 12.1 Tcfe on 1.2 Tcfe of Net Additions; During the First Three Quarters of 2008, Company Delivers a Reserve Replacement Rate of 290% and a Drilling and Net Acquisition Cost of $1.35 per Mcfe

Chesapeake began 2008 with estimated proved reserves of 10.879 trillion cubic feet of natural gas equivalent (tcfe) and ended the third quarter with 12.075 tcfe, an increase of 1.196 tcfe, or 11%. During the first three quarters of 2008, Chesapeake replaced 630 bcfe of production with an estimated 1.826 tcfe of new proved reserves for a reserve replacement rate of 290%. Reserve replacement through the drillbit was 2.286 tcfe, or 363% of production. This includes 1,128 bcfe of positive performance revisions (including 987 bcfe related to infill drilling and increased density locations) and 13 bcfe of positive revisions resulting from natural gas and oil price increases between December 31, 2007 and September 30, 2008. Acquisitions of proved reserves completed during the first three quarters of 2008 were 165 bcfe at a cost of $357 million, or $2.16 per mcfe, while sales of proved reserves during the first three quarters of 2008 totaled 638 bcfe for proceeds of $2.335 billion, or $3.66 per mcfe. Sales of undeveloped leasehold during the first three quarters of 2008 generated proceeds of $3.6 billion compared to a cost basis of approximately $750 million for the leasehold sold.

Chesapeake’s total drilling and net acquisition costs for the first three quarters of 2008 were $1.35 per mcfe. This calculation excludes costs of $3.3 billion for the acquisition of unproved properties and leasehold (net of sales), $289 million for capitalized interest on unproved properties, $234 million for seismic, and $19 million relating to tax basis step-up and asset retirement obligations, as well as positive revisions of proved reserves from higher natural gas and oil prices. Excluding these items and acquisition and divestiture activity, Chesapeake’s exploration and development costs through the drillbit during the first three quarters of 2008 were $1.94 per mcfe. A complete reconciliation of finding and acquisition costs and a roll-forward of proved reserves are presented on page 12 of this release.

During the first three quarters of 2008, Chesapeake continued the industry’s most active drilling program and drilled 1,435 gross operated wells (1,193 net with an average working interest of 83.1%) and participated in another 1,439 gross wells operated by other companies (195 net with an average working interest of 13.6%). The company’s drilling success rate was 99% for company-operated wells and 97% for non-operated wells. Also during the first three quarters of 2008, Chesapeake invested $3.852 billion in operated wells (using an average of 148 operated rigs) and $576 million in non-operated wells (using an average of 118 non-operated rigs) for total drilling, completing and equipping costs of $4.428 billion.

As of September 30, 2008, Chesapeake’s estimated future net cash flows from proved reserves, discounted at an annual rate of 10% before income taxes (PV-10), were $24.4 billion using field differential adjusted prices of $6.48 per thousand cubic feet of natural gas (mcf) (based on a NYMEX quarter-end price of $7.12 per mcf) and $96.66 per bbl (based on a NYMEX quarter-end price of $100.66 per bbl). Chesapeake’s PV-10 changes by approximately $420 million for every $0.10 per mcf change in natural gas prices and approximately $60 million for every $1.00 per bbl change in oil prices. Chesapeake’s enterprise value (market equity value plus long-term debt less working capital excluding current portion of derivative assets and liabilities) as of October 29, 2008 was approximately $27 billion.

By comparison, the December 31, 2007 PV-10 of the company’s proved reserves was $20.6 billion ($15.0 billion applying the SFAS 69 standardized measure) using field differential adjusted prices of $6.19 per mcf (based on a NYMEX year-end price of $6.80 per mcf) and $90.58 per bbl (based on a NYMEX year-end price of $96.00 per bbl). The September 30, 2007 PV-10 of the company’s proved reserves was $19.4 billion using field differential adjusted prices of $5.85 per mcf (based on a NYMEX quarter-end price of $6.38 per mcf) and $76.76 per bbl (based on a NYMEX quarter-end price of $81.56 per bbl).

The company calculates the standardized measure of future net cash flows in accordance with SFAS 69 only at year end because applicable income tax information on properties, including recently acquired natural gas and oil interests, is not readily available at other times during the year. As a result, the company is not able to reconcile the interim period-end values to the standardized measure at such dates. The only difference between the two measures is that PV-10 is calculated before considering the impact of future income tax expenses, while the standardized measure includes such effects.

In addition to the PV-10 value of its proved reserves and the very significant value of its undeveloped leasehold, particularly in the Haynesville, Marcellus, Barnett and Fayetteville shale plays, the net book value of the company’s other assets (including gathering systems, compressors, land and buildings, investments and other non-current assets) was $4.9 billion as of September 30, 2008, $3.1 billion as of December 31, 2007 and $2.9 billion as of September 30, 2007.

Average Realized Prices, Hedging Results and Hedging Positions Detailed

Average prices realized during the 2008 third quarter (including realized gains or losses from natural gas and oil derivatives, but excluding unrealized gains or losses on such derivatives) were $8.02 per mcf and $75.74 per bbl, for a realized natural gas equivalent price of $8.38 per mcfe. Realized gains and losses from natural gas and oil hedging activities during the 2008 third quarter generated a $0.71 loss per mcf and a $37.79 loss per bbl for a 2008 third quarter realized hedging loss of $246 million, or $1.15 per mcfe. Excluding hedging activity, Chesapeake’s average realized pricing basis differentials to NYMEX during the 2008 third quarter were a negative $1.52 per mcf and a negative $4.46 per bbl.

By comparison, average prices realized during the 2007 third quarter (including realized gains or losses from natural gas and oil derivatives, but excluding unrealized gains or losses on such derivatives) were $7.41 per mcf and $69.25 per bbl, for a realized natural gas equivalent price of $7.76 per mcfe. Realized gains from natural gas and oil hedging activities during the 2007 third quarter generated a $1.70 gain per mcf and a $1.51 loss per bbl for a 2007 third quarter realized hedging gain of $286 million, or $1.53 per mcfe. Excluding hedging activity, Chesapeake’s average realized pricing basis differentials to NYMEX during the 2007 third quarter were a negative $0.45 per mcf and a negative $4.62 per bbl.

The following tables summarize Chesapeake’s open hedge position through swaps and collars as of October 30, 2008. Depending on changes in natural gas and oil futures markets and management’s view of underlying natural gas and oil supply and demand trends, Chesapeake may either increase or decrease its hedging positions at any time in the future without notice.

Certain open natural gas swap positions include knockout swaps with knockout provisions at $6.50 per mcf covering 9 bcf in the 2008 fourth quarter, and prices ranging from $5.65 to $7.25 per mcf covering 150 bcf in 2009 and $5.45 to $7.40 per mcf covering 321 bcf in 2010. Certain open natural gas collar positions include three-way collars that include written put options with strike prices ranging from $5.00 to $6.00 per mcf covering 105 bcf in 2009 and at $6.00 per mcf covering 4 bcf in 2010. Also, certain open oil swap positions include cap-swaps and knockout swaps with provisions limiting the counterparty’s exposure below prices ranging from $45 to $60 per bbl covering 1 mmbbls in the 2008 fourth quarter, from $50 to $60 per bbl covering 6 mmbbls in 2009 and $60 per bbl covering 5 mmbbls in 2010. As of October 24, 2008, Chesapeake’s natural gas and oil hedging positions with a diversified group of 19 different counterparties had a positive mark-to-market (MTM) value of approximately $1.0 billion.

The company’s updated forecasts for 2008 through 2010 are attached to this release in an Outlook dated October 30, 2008, labeled as Schedule “A,” which begins on page 18. This Outlook has been changed from the Outlook dated October 14, 2008 (attached as Schedule “B,” which begins on page 23) to reflect various updated information.

Company Continues to Improve Balance Sheet and Liquidity

As a result of strong earnings growth and favorable changes in the MTM value of the company’s open hedging positions during the 2008 third quarter, Chesapeake’s net debt to book capitalization ratio decreased from 57% at June 30, 2008 to 43% at September 30, 2008. The company’s goal is to end 2008 with cash and cash equivalents on hand or bank credit availability of approximately $3.0 billion and to generate at least $1.0 billion of excess cash in each of 2009 and 2010. The company’s revolving credit facility matures in November 2012 and the first maturity of its senior unsecured notes is in July 2013.

Management Comments

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are pleased to report our financial and operational results for the 2008 third quarter. During the quarter, we earned almost $3.3 billion, improved our balance sheet and liquidity and closed approximately $7.5 billion of asset monetization transactions. Those transactions included selling a VPP for approximately $600 million in cash, selling 20% of our Haynesville Shale properties for $3.3 billion in cash and drilling carries, selling 25% of our Fayetteville Shale properties for $1.9 billion in cash and drilling carries and selling 100% of our remaining Woodford Shale properties for $1.7 billion in cash. Furthermore we are progressing on additional asset monetizations for the 2008 fourth quarter and we look forward to disclosing the details of these transactions later this quarter.

“Although financial market volatility remains high, Chesapeake is very well-positioned to continue growing and creating value in the 2008 fourth quarter and in 2009 and 2010. Our commodity hedges, our Haynesville and Fayetteville Shale drilling cost carries, our progress in the Marcellus Shale and our balance sheet, which has $2.0 billion in cash on it and requires no debt payments for four years, should enable Chesapeake to prosper during these difficult economic times. I am very excited to see the company continue realizing its full potential through the ongoing execution of our successful strategy and the full development of our top-tier properties.”

Conference Call Information

A conference call to discuss this release has been scheduled for Friday morning, October 31, 2008, at 9:00 a.m. EDT. The telephone number to access the conference call is 913-312-1437 or toll-free 888-240-9345. The passcode for the call is 7433119. We encourage those who would like to participate in the call to dial the access number between 8:50 and 9:00 a.m. EDT. For those unable to participate in the conference call, a replay will be available for audio playback from 2:00 p.m. EDT on October 31, 2008 through midnight EST on Friday, November 14, 2008. The number to access the conference call replay is 719-457-0820 or toll-free 888-203-1112. The passcode for the replay is 7433119. The conference call will also be webcast live on the Internet and can be accessed by going to Chesapeake’s website at www.chk.com and selecting the “News & Events” section. The webcast of the conference call will be available on our website for one year.

This press release and the accompanying Outlooks include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give our current expectations or forecasts of future events. They include estimates of natural gas and oil reserves, expected natural gas and oil production and future expenses, assumptions regarding future natural gas and oil prices, planned capital expenditures for drilling, leasehold acquisitions and seismic data and planned asset sales, as well as statements concerning anticipated cash flow and liquidity, business strategy and other plans and objectives for future operations. Disclosures concerning the fair value of derivative contracts and their estimated contribution to our future results of operations are based upon market information as of a specific date. These market prices are subject to significant volatility. We caution you not to place undue reliance on our forward-looking statements, which speak only as of the date of this press release, and we undertake no obligation to update this information.

Factors that could cause actual results to differ materially from expected results are described in “Risk Factors” in the Prospectus Supplement we filed with the U.S. Securities and Exchange Commission on July 10, 2008. These risk factors include the volatility of natural gas and oil prices; the limitations our level of indebtedness may have on our financial flexibility; our ability to compete effectively against strong independent natural gas and oil companies and majors; the availability of capital on an economic basis, including planned asset monetization transactions, to fund reserve replacement costs; our ability to replace reserves and sustain production; uncertainties inherent in estimating quantities of natural gas and oil reserves and projecting future rates of production and the amount and timing of development expenditures; uncertainties in evaluating natural gas and oil reserves of acquired properties and associated potential liabilities; our ability to effectively consolidate and integrate acquired properties and operations; unsuccessful exploration and development drilling; declines in the values of our natural gas and oil properties resulting in ceiling test write-downs; lower prices realized on natural gas and oil sales and collateral required to secure hedging liabilities resulting from our commodity price risk management activities; the negative impact lower natural gas and oil prices could have on our ability to borrow; drilling and operating risks, including potential environmental liabilities; production interruptions that could adversely affect our cash flow; and pending or future litigation.

Our production forecasts are dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.

Chesapeake Energy Corporation is the largest producer of natural gas in the U.S. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Fort Worth Barnett Shale, Haynesville Shale, Fayetteville Shale, Anadarko Basin, Arkoma Basin, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States. Further information is available at www.chk.com.