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Investing Activities
Cash used in investing activities was $8.503 billion in 2010, compared to $5.462 billion in 2009 and $9.965
billion in 2008. The majority of the increase in investing activities in 2010 was the result of our increased
acquisition of unproved properties, primarily in liquids-rich areas, and exploration and development activities.
Our investing activities in 2008 reflected our increasing focus on acquiring unproved properties in developing
natural gas shale plays, converting our resource inventory into production, redeploying our capital by selling
natural gas and oil properties with lower rates of return and increasing our investment in properties with higher
return potential. Investing activities in 2009 were at a reduced rate in response to a low natural gas price
environment, lower demand and the benefit of our drilling cost carries. Natural gas and oil investing activities
increased in 2010 as we pursued our strategy to acquire and develop liquids-rich properties. In each of 2010,
2009 and 2008, we also invested in drilling rigs, gathering systems, compressors, and other property and
equipment to support our natural gas and oil exploration, development and production activities. The following
table details our cash used in (provided by) investing activities during 2010, 2009 and 2008 ($ in millions):
2010 2009 2008
Natural Gas and Oil Investing Activities:
Acquisitions of natural gas and oil proved properties ................... $ 243 $ 5 $ 372
Acquisition of natural gas and oil unproved properties .................. 6,015 1,666 7,660
Exploration and development of natural gas and oil properties ........... 5,061 3,410 5,789
Geological and geophysical costs (a) ................................. 181 162 315
Interest capitalized on unproved properties ........................... 687 598 561
Deposits for acquisitions of proved and unproved properties ............. 43 — 12
Proceeds from divestitures of proved and unproved properties ........... (4,292) (1,926) (7,670)
Total natural gas and oil investing activities ......................... 7,938 3,915 7,039
Other Investing Activities:
Additions to other property and equipment ............................ 1,326 1,683 3,073
Additions to investments .......................................... 134 40 74
Proceeds from sales of other assets ................................. (883) (176) (219)
Other .......................................................... (12) — (2)
Total other investing activities .................................... 565 1,547 2,926
Total cash used in investing activities .......................... $ 8,503 $ 5,462 $ 9,965
(a) Including related capitalized interest.
Bank Credit Facilities
We utilize two revolving bank credit facilities, described below, as sources of liquidity.
Corporate
Credit Facility (a)
Midstream
Credit Facility (b)
Borrowing capacity ............................... $
($ in millions)
4,000 $ 300
Maturity date .................................... December 2015 July 2015
Facility structure ................................. Senior secured revolving Senior secured revolving
Amount outstanding as of December 31, 2010 ......... $ 3,612 $ 94
Letters of credit outstanding as of December 31, 2010 . . $ 13 $ —
(a) Borrower is Chesapeake Exploration, L.L.C.
(b) Borrower is Chesapeake Midstream Operating, L.L.C., a wholly owned subsidiary of Chesapeake
Midstream Development, L.P.
Our credit facilities do not contain material adverse change or adequate assurance covenants. Although
the applicable interest rates under our corporate credit facility fluctuate slightly based on our long-term senior
unsecured credit ratings, neither of our credit facilities contains provisions which would trigger an acceleration
of amounts due under the facilities or a requirement to post additional collateral in the event of a downgrade of
our credit ratings.
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