For the 2003 first quarter, Chesapeake generated net income available to common shareholders of $70.0 million ($0.32 per fully diluted common share) and operating cash flow of $167.7 million (defined as cash flow from operating activities before changes in assets and liabilities) on revenue of $374.4 million.
The company's 2003 first quarter net income available to common shareholders of $70.0 million included a $17.2 million after-tax risk management gain (a non-cash item resulting from the application of SFAS 133 to the company's derivative contracts that do not qualify for hedge accounting) and a $2.4 million after-tax gain resulting from the cumulative effect of an accounting change for the adoption of SFAS 143 for asset retirement obligations.
Production for the 2003 first quarter was 56.8 billion cubic feet of natural gas equivalent (bcfe), comprised of 50.4 billion cubic feet of natural gas (bcf) (89%) and 1.06 million barrels of oil (mmbo) (11%). Oil and natural gas production increased 35% from the 2002 first quarter and 15% compared to the 2002 fourth quarter. The 2003 first quarter marked Chesapeake's seventh consecutive quarter of production growth compared to seven consecutive quarters of production decline in the industry. During the past seven quarters, Chesapeake's production has increased 45%, for an average per quarter growth rate of 6%. Reserve growth during the 2003 first quarter was also significant as production of 57 bcfe was replaced by 660 bcfe of new proved reserves (a 1,150% reserve replacement rate). This growth was comprised of 564 bcfe from acquisitions, 82 bcfe from drilling and 14 bcfe from positive revisions.
