Here is what Chesapeake Energy Corp. has to report about drilling in Ohio's Utica shale in the Winter 2013 issue of The Play, the company's publication.



The second ariicle is about new Chesapeake drilling rigs being used in Ohio:



I. The Play: Utica Shale

Poised for Success

By Cheryl Hudak


Chesapeake is looking forward to a happy new year in Ohio, as infrastructure is completed to process and transport the bountiful wet gas the company is finding in the Utica Shale.



Come February, our wells will be coming on line, as we complete compression and pipeline facilities to take liquids to processing plants, said Tim Dugan, District Manager Utica District, Eastern Division. Throughout 2013, we will continue to ramp up.



The discovery and launch of the Utica Shale has been a whirlwind, even for a company like Chesapeake, renowned for its innovative petroscience capabilities and rapid-fire development.






Floorhands Scott Niermeyer and Roger Harper,

crew members on Nomac Rig #70, drilling the

Lucas 35-11-4 6H in Carroll County, Ohio.


I am hoping that the Utica will achieve profitability faster than any other Chesapeake play, Dugan said. The companys initial drilling results, announced in September 2011, were exciting. Its energetic Land Department had already begun amassing leasehold of more than 1.6 million gross acres, which the company believes will support drilling more than 13,000 wells.



Today Chesapeake has defined the Uticas core wet gas window, in which it will target development in Carroll, Columbiana, Harrison and Jefferson counties in eastern Ohio. The company has 14 rigs operating in those counties and expects to raise that number to 17 in 2013. Of the 179 wells Chesapeake has drilled thus far in the Utica, 45 are producing while 45 await pipeline connections. Another 76 are in various stages of completion. As midstream constraints are reduced, Chesapeake expects the Utica to make a much larger contribution to its production growth.



The Utica is a complex play to develop, with other E&P operators in the region wondering how Chesapeake coordinates drilling locations and schedules for 14 rigs. Geologically, the Utica is challenging as we try to understand the varying rock properties across the different windows (dry gas, wet gas and oil windows). From a land standpoint, putting units together, working around mining operations and clearing titles has not been an easy task. Operationally, the terrain and weather in the Eastern Division also create unique challenges. However, we have assembled a Utica team that has been able to work through these obstacles and stay ahead of the drilling rigs to keep us well ahead of our competitors.



We do a great deal of work before we even build a drilling location or a drillbit hits the ground, Dugan noted. Were out there clearing title, working with leaseholders and coal companies on surface issues, and making sure our operations will have as little impact as possible on the environment and the public. These preliminary operations cost us up to $300,000 before we even begin to build a drillsite. The land and preparatory work is almost harder than drilling and production.






A pristine Christmas tree marks a Carroll County

production site.


To further refine the process, Nomac Drilling, a wholly owned affiliate of Chesapeake Oilfield Services (itself a wholly owned subsidiary of Chesapeake), delivered the first new PeakeRig to the Utica Shale in December. Designed and built especially for the company, the PeakeRig incorporates new advancements in efficiency and hydraulics that enable it to walk on a multiwell padsite. That capability will be put to good use in the Utica, where 60% of all drilling sites are on multiwell pads. It will also keep costs down a big challenge in todays energy industry.



Weve worked our costs down relatively fast in this new play, Dugan said. Were increasing efficiencies and finding ways to reduce costs in every aspect of development: using the PeakeRig, rotary steerable drilling capacity, innovations in our well completions, and more efficient production facility installations. And while we are using new techniques and equipment, we are not cutting corners. We want to impact costs, but not impact the quality of what were doing.



A $2.32 billion joint venture partnership the company entered into with Total E&P USA in December 2011 is helping defray some of those costs. Approximately $1.25 billion of the original $1.42 billion in drilling carries remained available at the end of the third quarter of 2012. Chesapeake anticipates using all the remaining carry by year-end 2014, which will pay for 60% of our drilling costs during that time.



Safety continues to be a top priority in the new play not just among Chesapeake employees, but vendors as well. Dugan pointed out that although the Utica ramp up has been rapid, its safety record has been outstanding.



Teamwork makes that possible. So does experience. Dugan himself has worked with Chesapeake development teams in the Barnett, Haynesville and Marcellus South regions before taking on leadership in Ohio. Everyone shares their knowledge and experience from other plays, Dugan said. For instance, a big challenge in Utica is that the liquid-rich nature of this play adds complexity to the development process. So were getting great input from our counterparts in the liquids-rich Eagle Ford Shale play of South Texas.



Homecoming

Chesapeakes Utica Shale operations bring native sons back to Ohio




Joe Starkey


Joe Starkey, Production Superintendent in Chesapeakes Utica Shale operations, grew up in Waterford, Ohio. But it took almost a decade after graduating from college for Starkey to find his true career and come back home to the Buckeye State.



It was kind of a roundabout process, he explained. I originally got a marketing degree from Marietta College in southeast Ohio. Then in 2001, I ran into a childhood friend, Zach Arnold, who was doing an internship for an exploration and production company in West Texas. Running into Zach was a wakeup call, because those were tough times in the marketing business.



So tough, in fact, that Starkey returned to Marietta College for a degree in petroleum engineering. The school has a strong petroleum engineering curriculum, because the area was once a hub of E&P development. But when that activity faded, the college only had three or four engineering students graduating each year. Today, amidst Ohios new energy boom, the program has more than 100 students.



After receiving his engineering degree in 2004, Starkey moved to West Virginia with an E&P company, and later found himself working as a production engineer in Midland, Texas.



I was homesick for more than three and a half years while I lived in Midland, Starkey recalled. Then in the fall of 2010, I heard that Chesapeake had drilled a Utica Shale well in Ohio. That was very exciting to me. I was really eager to get back home. I sent my resume to an engineer I knew at Chesapeake and called him every month to ask about job opportunities.



He told me to hang tight, Starkey laughed. I kept calling and finally got an interview. I went to work for Chesapeake on June 29, 2011, in the companys Jane Lew, West Virginia, office. It wasnt quite home, but it was a lot closer.



Today, Joe Starkey is officially back home in Ohio, where he is working in Chesapeakes Canton, Ohio, field office and making a very important contribution to Chesapeakes success in the Utica Shale and where his two young children live in happy proximity to their grandmothers.



Joe and his group are outstanding, said District Manager Tim Dugan. For example, they worked with a local tank manufacturer, the Waterford Tank Company, to get certified with the American Petroleum Institute to meet Chesapeakes specifications. They made it. And its been great for everyone involved: their business benefits because theyre selling us tanks, and by buying locally, we reduced our transportation costs, which has saved Chesapeake a lot of money.



Just as important, a generation of excellent workers has found its way home.



I really love my job and being near my family, Starkey said. He also enjoys working with three of his childhood friends who are also Chesapeake employees today: Nick Pottmeyer, Completion Superintendent; Joe Baker, Associate Production Superintendent; and Zachary Arnold, Operations Manager in South/Marcellus Central.



To date, Chesapeake operations in the Utica Shale have been the catalyst for creating more than 500 direct jobs with thousands of jobs created indirectly with vendors, service companies and peripheral businesses.






State-of-the-art systems and controls on the

PeakeRig increase efficiency and safety for

crew members like Driller Jeremy Camburn

and Motorman Roger Van Ryn.


An Economic Boon


The Utica Shale is helping to enliven the Ohio economy, with unemployment dropping from 9.4% in 2011 to 6.8% in 2012. In Carroll County, at the heart of Chesapeakes core area, unemployment moved from above 12% in early 2011 to 6.9% in November 2012. A recent Global Insight Study from IHS (Information Handling Services) stated that unconventional gas activity contributed value-added economic activity of $4.1 billion to Ohio in 2012, and forecast that the contribution will grow to $35.2 billion by 2035. Oil and gas activity creates jobs and income, creates leasehold payments, taxes and renewed economic activity, including the manufacturing sector as it makes supplies, equipment and machinery to support the industry. A study by the Ohio Shale Coalition predicts that $6 billion will be spent on drilling and completing wells in Ohio by the end of 2014.????????



Peake Move Process" />

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The Logistics: The Peake Move Process

Moving On

By Cheryl Hudak


Anyone who has been daunted by the prospect of moving a refrigerator or a couch should consider the challenge of loading up, transporting and reassembling a 106-foot, 2-million-pound drilling rig every few weeks!



Moving a typical drilling rig involves 85 tractor-trailer loads, each weighing between 25,000 and 50,000 pounds. Load sizes may vary depending on the specific equipment, but they average 50 feet in length, 9 feet wide and 11 feet tall.



As the most active driller in the nation, Chesapeake knows that time is money. Every day that passes between the time a rig is released from one site and it spuds a well on the next site is a day not drilling. Down time between drilling also affects the companys production and efficiency, which reduces profitability.






Concentration shows on the face of

Greg Armstead and fellow Nomac

Rig #311 crew members.


Early in 2012, a multidisciplinary team took on the challenge of improving rig move efficiency, and it began by recording a video of the moving process on one rig.



Our team watched that video several times, said Dave Bert, Vice President Drilling, Eastern Division. We thought wed probably see some double handling of equipment. But watching the video, we saw that one piece of equipment was handled five times! It was time to do something.



Senior Drilling Engineer Roi Lam was named to manage a project designed to break down performance barriers in the rig moving process, using new approaches to teamwork, communications and planning.



The resulting Peake Move Process (PMP) was implemented in the Eastern Division in July 2012, and its results have been very impressive. Almost every one of the 21 rigs using the process has reduced its average move time from 7.78 days to 3.67 days more than 50%. The time saved equates to money saved, and with the cost of a typical rig move between $300,000 and $500,000, PMP is improving Chesapeakes bottom line.






Hodges Trucking, a Chesapeake affiliate,

takes on a heavy load during the complex

task of moving and reassembling a

2-million-pound drilling rig.


Every day we save moving one rig saves the company more than $42,000, said Bert. Since implementing PMP, we have saved more than $110,000 per well thats an estimated $9.7 million over the past six months.



The logistics of rig moving are complicated. Something as obvious as mis-scheduling equipment can impede the entire job. With PMP, no detail is left to chance, from the arrival of trailers to haul a 50,000-pound rig mast to making sure the outdoor grill works at the celebration following a Best-In-Class move. The bottlenecks are in the details, such as having enough pressure washers ready at a drillsite to wash down equipment without holding up trucking crews.



Manpower is equally challenging: coordinating rig crews, drilling supervisors, pressure washing companies, crane operators, heavy-hauling companies, specialized moving crews and safety representatives. Some of the participants are Chesapeake employees, while others work for subsidiaries and third-party vendors, all of whom are required to attend pre-move meetings that enhance teamwork and communication.



The field personnel from Hodges Trucking, Nomac and Chesapeake should all be commended on their support, said Lam. Without them, the program would not be as successful.



Every risk in an upcoming move is identified, assessed and managed. A PMP workbook describes every step of the move and assigns tasks to accomplish it. Planning sheets are developed for each phase of the move. Daily progress reports are filed, and a final review provides highlights of each move as well as lessons learned for future reference. An online PMP site holds support documents, layouts of all rigs, best practices, moving tips and warnings.






Rigging down! Nomac Rig #311

begins its move after reaching a total

depth of more than 15,000 feet

on the Creamer 25-5-2 3H well

in Jefferson County, Ohio.


We have employees who form special moving crews, Bert explained, and we may have a PMP facilitator on hand to coach the rig move, improving teamwork and communications. Some of these facilitators are among Chesapeakes military veteran hires. That makes sense, because PMP moves rigs with almost military precision. Their military training and logistical experience makes them ideal candidates for the job.



One of the most important benefits of PMP is its emphasis on safety. An orderly process with careful planning and risk assessment reduces the risk of accidents.



Our goal is to learn the difference between being quick, precise and efficient versus hurrying and taking high-risk shortcuts, Bert said. Safety is a priority in the PMP. We use walkie-talkies, reflective vests, hard hat lamps, risk registers and debriefing to determine how each task can be done safely.



The process was also designed to heighten sensitivity to how rig moves impact communities where we operate.



The PMP helps minimize disruption to the public by focusing on making rig moves as efficient as possible through more effective planning and scheduling, said Lam. The fewer days it takes to move a rig, the lower our impact on the public.



Since its successful introduction in the Eastern Division, PMP is being expanded into the Northern Division and then to other operations across the company.



Improved rig moving processes may be just the beginning. Given Chesapeakes characteristic ability to transfer knowledge from one activity to another, PMP will likely be adapted to further refine other company operations.?????





Building CNG Infrastructure" />

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The Business: Building CNG Infrastructure

Changing the Way America Fuels

By Brandi Wessel


This Breakthrough system Provides An Affordable and market-ready Compressed natural gas option for retailers and fleets





Compressed natural gas (CNG) as a transportation fuel is often viewed as a chicken or egg conundrum. Which comes first the infrastructure needed to make CNG accessible to the public or consumer demand for more CNG fueling stations? Peake Fuel Solutions, a wholly owned Chesapeake subsidiary, through a partnership with GE, is delivering the answer with its CNG In A Box system.



The breakthrough, plug-and-play system provides retailers and fleet managers an affordable and market-ready CNG fueling option. Backed by GEs ecomagination qualification, it provides the on-site infrastructure compressors, motors, dispensers, storage and controls needed to instantly unlock new profits for retailers and help fleet managers save 4060% a year on fuel costs.



The benefits of natural gas, particularly the cost savings, make it an attractive alternative to gasoline or diesel, said Norman Herrera, Director Market Development for Chesapeake. Fleet managers who have a private central location for fueling have been realizing cost savings for some time. But now, convenience store owners and other fuel providers have the ability to add an affordable, reliable CNG system to public stations, which will simultaneously help grow infrastructure and consumer demand.






Plug-and-play systems make CNG In A Box

accessible to retailers from coast to coast.


So far, the CNG In A Box system, which debuted in 2012 at the National Association of Convenience Stores Show in Las Vegas, is receiving rave reviews. We received more than 220 sales leads with some of the nations most recognized chains, said Kent Wilkinson, Chesapeake Vice President Natural Gas Ventures. Most importantly, we were able to get the attention we wanted from the right audience and they were impressed with what they saw and the way the product addresses all of the issues they thought they might encounter.



From compressors specifically designed to take advantage of real-time diagnostic readings to dispenser systems guaranteed to provide a positive user experience, CNG In A Box is the first completely integrated system of its kind.



GE had some great ideas about how we could make this doable on a mass scale, said Wilkinson. We went through the supply chain and selected equipment that allowed us to create an easy-to-install unit. We only have to make small, simple additions to our base system to allow it to safely operate on higher pressure supply lines.



This versatility means the system does not require expensive specialty parts or training to operate an appealing benefit over competing alternatives.



Nothing we did was really rocket science, said Wilkinson, but its definitely something no one else is doing. When we first started talking with GE about the product, we sat down and discussed what our ideal system would look like, how it would function and what we needed to do to make it work. Then we did the first install ourselves so we could see what did and didnt work, and corrected any problems we encountered without using potential customers as our guinea pigs. The result is something unlike anything else on the market today.



Want to know more about CNG In A Box or see just how much you could save by switching to a CNG vehicle? Visit PeakeFuelSolutions.com.



What is CNG?


CNG is a readily available alternative to gasoline thats made by compressing natural gas to less than 1% of its volume at standard pressure. It offers the same power and performance as its gasoline and diesel counterparts at approximately half the price per gallon at the pump.



CNG is also better for the environment, reducing:



Carbon dioxide (CO2) emissions by 20% to 30%



Carbon monoxide (CO) emissions up to 75%



Nitrogen oxide (NOx) emissions by approximately 50%



Up to 95% of particulate matter (PM) emissions



Natural gas powers more than 12 million vehicles on the road today. Unfortunately, only 125,000 of these are being used in the U.S., according to GE. The average growth rate in the U.S. shows a 3.7% increase per year since 2000, compared to the booming global growth rate of 30.6% per year.



Learn more about the advantages of CNG at CNGnow.com.?





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The Technology: Liquids Measurement

Liquid Assets

By Cheryl Hudak


New Technology Helps Chesapeake Measure Up



Each day approximately 1,000 tanker trucks of oil leave Chesapeake-operated wells. For each of those loads, the process begins when a tank of oil is ready to sell on a production site.



In the past two years, Chesapeakes success in refocusing its production on oil and natural gas liquids has earned it a position as the 11th largest oil and natural gas liquids producer in the U.S. while also retaining its status as the #2 producer of U.S. natural gas. Remarkably,



the companys oil production increased 96% from the third quarter of 2011 to the third quarter 2012, during which it produced an average of 97,800 barrels of oil per day.



A focused oil measurement program is integral to the companys success in growing its production as 90% of its oil production is transported from the wellhead to the market by truck and 10% by pipeline. Recognizing the complexity of tracking production, quality, movement, sales and royalty payments on rapidly increasing quantities of oil, a program was initiated in 2010 to measure oil as efficiently as the companys gas measurement program. The foundation of that program would be new technology.






In the oil-rich Eagle Ford Shale of South Texas,

driver Jim Schell tests and hauls crude oil for

Chesapeake affiliate Oilfield Trucking Solutions.


Oil production is on a rapid incline, said Andrew McCalmont, Manager GHG, Power and Programs for Chesapeakes Engineering Technology Group. As with many manufacturing processes, new technology provides a competitive advantage.



Developing an oil measurement program began with McCalmont in the Engineering Technology Group, in collaboration with Production Control, Crude Oil Marketing, Information Technology and Supervisory Control and Data Acquisition (SCADA) groups. As the program successfully grew, oil measurement became a separate entity led by Misty Isaacs within Operations in October 2012.



I was interested in process, control and efficiency, said Isaacs, Coordinator Liquids Measurements and Projects. So helping build the oil measurement program has been exciting for me.



From their first meeting, everyone involved in developing the program focused on adding value and efficiency to Chesapeake. Each day approximately 1,000 tanker trucks of oil leave Chesapeake-operated wells. For each of those loads, the process begins when a tank of oil is ready to sell on a production site. Chesapeake pumpers submit load hauling requests for oil haulers through the CHKLiquids website, a system developed by the companys in-house information technology team. This website allows the load request to be transmitted via email to the hauler, rather than by telephone as in the past. The CHKLiquids website also contains a reporting tool employees use to submit any problems they may encounter in the field for analysis and improvement.



This enables us to have better tracking and analysis, Isaacs said, and helps us improve on the processes and procedures we use to manage our 1.1 million barrel average oil inventory. It also includes a contract section for CEMI, Chesapeake Energy Marketing, Inc., our crude oil marketing group. Previously, contracts were managed within spreadsheets.







When the hauler arrives at the well, the driver measures the oil volume in the tank before and after oil is pumped onto the truck for transport and sale. A run ticket is left on location to document the sale. Pumpers enter the run ticket into a database so the data can be tracked and validated.



This new technology is a step in the right direction, Isaacs said. It saves time and provides a verifiable audit trail of data. It aligns with American Petroleum Institute standards and gives us continually updated information at our fingertips.



Pumpers work closely with measurement technicians assigned to the field, and together they play a critical role in the process of tracking transportation and sales of the companys oil production. Since June 2011, more than 500 of Chesapeakes 720 pumpers have been trained for their role in the new process. The oil measurement group has high regard for the pumpers who maintain and protect the companys production sites.



They teach us a great deal, and we hope we can teach them a thing or two also, Isaacs said. Its definitely a two-way street.







Tools of the Trade


New technology used in the oil measurement process provides information to manage inventory, obtain accurate measurements and track sales. In addition to CHKLiquids, some of the tools include:



Tank Sticks installed at batteries to read oil and water levels and oil temperature in the tank. Tank sticks can be tied back to flow computers, which relay information and help avoid spills by automatically shutting in a well if oil and water levels are too high.



Coriolis Allocation Meters measure the oil delivered to a central delivery point and determine the number of barrels produced by each well. The meters also indicate the density/API gravity of the oil, which the field and Oil Measurement Group monitors for changes to help optimize production equipment and ensure accurate measurement.



Lease Automatic Custody Transfer (LACT) Meters are used for selling oil on large-volume central tank batteries and determine the quality and quantity of oil sold. This automated system is safer, more efficient and provides more accurate measurement than the previous process, where the driver used a gauge line and dropped it in the tank to measure the oil.



FlowCal Measurement Software receives data directly from allocation and LACT meters. This data is studied daily by measurement analysts for accuracy to ensure that royalty owners are properly paid for the correct amount of resources sold. This task was previously done using spreadsheets.???







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Inside CHK

Innovative workplace culture

Chesapeake Names To Fortune '100 Best Companies To Work For' List




Unique facilities such as the Reservoir

Technology Center attract top scientific

talent.


For the sixth consecutive year, FORTUNE Magazine named Chesapeake to its list of 100 Best Companies to Work For. Chesapeake ranked #26, the highest listed Oklahoma-based employer for the third consecutive year and the second highest ranked company in the energy industry.



Empowered and motivated employees continue to make Chesapeake a great place to work, said Aubrey McClendon, Chesapeake CEO. Our employees are focused on creating and delivering value for our shareholders while also making our country more energy secure. Although we have made progress in achieving these goals, we are determined to do even better with our distinctive and attractive corporate culture and workplace being key elements in our drive for further success.






Creekside is the newest of four

on-site restaurants that surprise and

delight corporate headquarters

employees every day.


Martha A. Burger, Chesapeakes Senior Vice President Human & Corporate Resources noted, We believe our workplace culture allows Chesapeake to recruit and retain some of the industrys best talent. We are extremely proud of our nearly 12,000 employees who consistently deliver outstanding performance, quality, innovation and collaboration, even when faced with the cyclical nature of our industry.



Archie W. Dunham, Chairman of the Board, added, In addition to our extraordinarily high quality assets below ground, Chesapeake has built an asset base of tremendous breadth, value and energy above ground our employees. It is a tribute to our management team for their excellence and efforts that Chesapeake has now been recognized among the 100 Best Companies to Work For six years running.



Chesapeake employees offer H.E.L.P. for the Holidays




Cleburne, Texas, employees brighten the

holidays with gifts ranging from bikes to

clothing through The Salvation Army.


Employees demonstrated Chesapeakes core value of giving back to those in need during this years H.E.L.P. for the Holidays campaign. Working together to serve their neighbors and help build strong communities, employees from 61 Chesapeake offices contributed 2,400 volunteer hours to serve 125 nonprofit organizations in 12 states. The annual campaign runs from November 26 to December 31.



It is an honor to work with such generous employees committed to Chesapeakes culture of giving back and strengthening the communities in which we operate, said Teresa Rose, Sr. Director Community Relations. It is humbling to witness the sincere passion Chesapeake employees demonstrate when donating to a worthy cause or helping with community needs, especially during the holiday season. From providing toys and warm coats for children to spending time sorting donations at a food bank, Chesapeake volunteers always go above and beyond.



Chesapeake Sells Midstream Assets for $2.16 Billion





Chesapeake recently sold a substantial majority of its midstream assets to Access Midstream Partners, L.P. (NYSE:ACMP) for approximately $2.16 billion. These midstream assets are located primarily in the companys Marcellus, Utica, Eagle Ford, Haynesville and Niobrara shale plays.



The company also recently completed the sale of other midstream assets in Oklahoma and Texas during the 2012 fourth quarter for approximately $175 million. Finally, Chesapeake anticipates completing the sale of its remaining midstream assets, including its Mid-Continent assets, by the end of the 2013 first quarter for approximately $425 million, bringing the total of current and anticipated midstream asset sales to $2.75 billion. Including the approximate $2.125 billion of midstream asset sales completed in the 2012 second and third quarters, the proceeds from the companys midstream exit are anticipated to total approximately $4.875 billion.



Aubrey McClendon, CEO, said, We are pleased to announce further progress towards our asset sale goals for 2013. We look forward to completing additional asset sales and achieving our goals of strengthening our balance sheet, tightening our asset focus and increasing returns to shareholders.????????????







2.



The Logistics: The Peake Move Process

Moving On

By Cheryl Hudak


Anyone who has been daunted by the prospect of moving a refrigerator or a couch should consider the challenge of loading up, transporting and reassembling a 106-foot, 2-million-pound drilling rig every few weeks!



Moving a typical drilling rig involves 85 tractor-trailer loads, each weighing between 25,000 and 50,000 pounds. Load sizes may vary depending on the specific equipment, but they average 50 feet in length, 9 feet wide and 11 feet tall.



As the most active driller in the nation, Chesapeake knows that time is money. Every day that passes between the time a rig is released from one site and it spuds a well on the next site is a day not drilling. Down time between drilling also affects the companys production and efficiency, which reduces profitability.






Concentration shows on the face of

Greg Armstead and fellow Nomac

Rig #311 crew members.


Early in 2012, a multidisciplinary team took on the challenge of improving rig move efficiency, and it began by recording a video of the moving process on one rig.



Our team watched that video several times, said Dave Bert, Vice President Drilling, Eastern Division. We thought wed probably see some double handling of equipment. But watching the video, we saw that one piece of equipment was handled five times! It was time to do something.



Senior Drilling Engineer Roi Lam was named to manage a project designed to break down performance barriers in the rig moving process, using new approaches to teamwork, communications and planning.



The resulting Peake Move Process (PMP) was implemented in the Eastern Division in July 2012, and its results have been very impressive. Almost every one of the 21 rigs using the process has reduced its average move time from 7.78 days to 3.67 days more than 50%. The time saved equates to money saved, and with the cost of a typical rig move between $300,000 and $500,000, PMP is improving Chesapeakes bottom line.






Hodges Trucking, a Chesapeake affiliate,

takes on a heavy load during the complex

task of moving and reassembling a

2-million-pound drilling rig.


Every day we save moving one rig saves the company more than $42,000, said Bert. Since implementing PMP, we have saved more than $110,000 per well thats an estimated $9.7 million over the past six months.



The logistics of rig moving are complicated. Something as obvious as mis-scheduling equipment can impede the entire job. With PMP, no detail is left to chance, from the arrival of trailers to haul a 50,000-pound rig mast to making sure the outdoor grill works at the celebration following a Best-In-Class move. The bottlenecks are in the details, such as having enough pressure washers ready at a drillsite to wash down equipment without holding up trucking crews.



Manpower is equally challenging: coordinating rig crews, drilling supervisors, pressure washing companies, crane operators, heavy-hauling companies, specialized moving crews and safety representatives. Some of the participants are Chesapeake employees, while others work for subsidiaries and third-party vendors, all of whom are required to attend pre-move meetings that enhance teamwork and communication.



The field personnel from Hodges Trucking, Nomac and Chesapeake should all be commended on their support, said Lam. Without them, the program would not be as successful.



Every risk in an upcoming move is identified, assessed and managed. A PMP workbook describes every step of the move and assigns tasks to accomplish it. Planning sheets are developed for each phase of the move. Daily progress reports are filed, and a final review provides highlights of each move as well as lessons learned for future reference. An online PMP site holds support documents, layouts of all rigs, best practices, moving tips and warnings.






Rigging down! Nomac Rig #311

begins its move after reaching a total

depth of more than 15,000 feet

on the Creamer 25-5-2 3H well

in Jefferson County, Ohio.


We have employees who form special moving crews, Bert explained, and we may have a PMP facilitator on hand to coach the rig move, improving teamwork and communications. Some of these facilitators are among Chesapeakes military veteran hires. That makes sense, because PMP moves rigs with almost military precision. Their military training and logistical experience makes them ideal candidates for the job.



One of the most important benefits of PMP is its emphasis on safety. An orderly process with careful planning and risk assessment reduces the risk of accidents.



Our goal is to learn the difference between being quick, precise and efficient versus hurrying and taking high-risk shortcuts, Bert said. Safety is a priority in the PMP. We use walkie-talkies, reflective vests, hard hat lamps, risk registers and debriefing to determine how each task can be done safely.



The process was also designed to heighten sensitivity to how rig moves impact communities where we operate.



The PMP helps minimize disruption to the public by focusing on making rig moves as efficient as possible through more effective planning and scheduling, said Lam. The fewer days it takes to move a rig, the lower our impact on the public.



Since its successful introduction in the Eastern Division, PMP is being expanded into the Northern Division and then to other operations across the company.



Improved rig moving processes may be just the beginning. Given Chesapeakes characteristic ability to transfer knowledge from one activity to another, PMP will likely be adapted to further refine other company operations.?????