<PAGE>

     As filed with the Securities and Exchange Commission on April 9, 2003
                                                  Registration No. 333-
================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                               -----------------

                                   FORM S-4
                       REGISTRATION STATEMENT UNDER THE
                            SECURITIES ACT OF 1933

                               -----------------

                        CHESAPEAKE ENERGY CORPORATION*
            (exact name of registrant as specified in its charter)

<TABLE>
<S>                             <C>                          <C>
           Oklahoma                         1311                          73-1395733
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification No.)
Incorporation or Organization)  Classification Code Number)
</TABLE>

             6100 North Western Avenue     Aubrey K. McClendon
              Oklahoma City, Oklahoma   Chairman of the Board and
                       73118             Chief Executive Officer
                  (405) 848-8000        6100 North Western Avenue
              (Address, Including Zip    Oklahoma City, Oklahoma
                       Code,                      73118
               and Telephone Number,         (405) 848-8000
               Including Area Code,
             of Registrant's Principal
                Executive Offices)
                                        (Name, Address, Including
                                                Zip Code,
                                          and Telephone Number,
                                                Including
                                         Area Code, of Agent for
                                                Service)

                               -----------------
                                   Copy to:
                             James M. Prince, Esq.
                            Vinson & Elkins L.L.P.
                             2300 First City Tower
                              1001 Fannin Street
                           Houston, Texas 77002-6760
                                 713-758-3710
                              713-615-5962 (fax)

                               -----------------

   Approximate date of commencement of proposed sale to the public:  As soon as
practicable after the effective date of this Registration Statement.

                               -----------------

   If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]

   If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [_]

   If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

                        CALCULATION OF REGISTRATION FEE

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                 Proposed Maximum  Proposed Maximum
      Title of Each Class of        Amount to be  Offering Price  Aggregate Offering    Amount of
    Securities to be Registered      Registered    Per Note(1)         Price(1)      Registration Fee
-----------------------------------------------------------------------------------------------------
<S>                                 <C>          <C>              <C>                <C>
7.50% Senior Notes due 2013........ $300,000,000       100%          $300,000,000        $24,270
-----------------------------------------------------------------------------------------------------
Guarantees by certain of Chesapeake
  Energy Corporation's subsidiaries           --        --                     --            -- (2)
-----------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------

(1) Estimated solely for the purpose of calculating the registration fee in
    accordance with Rule 457(f) under the Securities Act of 1933.
(2) Pursuant to Rule 457(n) no separate fee for the guarantees is payable
    because the guarantees relate to other securities that are being registered
    concurrently.
*  Includes certain subsidiaries of Chesapeake Energy Corporation identified on
   the following pages.

<PAGE>

                           The Ames Company, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1470082
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                          Carmen Acquisition, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1604860
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                        Chesapeake Acquisition, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1528271
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                    Chesapeake Energy Louisiana Corporation
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1524569
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                           Chesapeake EP Corporation
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          48-1270813
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                  Chesapeake Exploration Limited Partnership
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1384282
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                          Chesapeake Louisiana, L.P.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1519126
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                          Chesapeake Operating, Inc.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1343196
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                   Chesapeake Panhandle Limited Partnership
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1565350
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                          Chesapeake Royalty, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1549744
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                             Gothic Energy, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          22-2663839
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                           Gothic Production, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1539475
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

<PAGE>

                          Nomac Drilling Corporation
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1606317
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                       Chesapeake Mountain Front, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1238619
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                            Chesapeake ORC, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          71-0934234
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                            Sap Acquisition, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1622555
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                     Chesapeake-Staghorn Acquisition L.P.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1612854
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                      Chesapeake KNAN Acquisition, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          73-1300132
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                      Chesapeake ENO Acquisition, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          82-0553595
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                            Chesapeake Delta Corp.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          41-2050649
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                           Chesapeake Focus, L.L.C.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          33-1021135
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

                            Chesapeake Sigma, L.P.
            (Exact Name of Registrant As Specified In Its Charter)

<TABLE>
<S>                                                            <C>
                           Oklahoma                                          27-0029884
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>

   Each Registrant hereby amends this Registration Statement on such dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

================================================================================

<PAGE>

                  SUBJECT TO COMPLETION, DATED APRIL 9, 2003.


PROSPECTUS

                         Chesapeake Energy Corporation

                            Offer to Exchange up to
                  $300,000,000 of 7.50% Senior Notes due 2013

                                      for

                  $300,000,000 of 7.5% Senior Notes due 2013
          that have been Registered under the Securities Act of 1933

                          Terms of the Exchange Offer

..  We are offering to exchange up to $300,000,000 of our outstanding 7.50%
   Senior Notes due 2013 for new notes with substantially identical terms that
   have been registered under the Securities Act and are freely tradable.

..  We will exchange all outstanding notes that you validly tender and do not
   validly withdraw before the exchange offer expires for an equal principal
   amount of new notes.
..  The exchange offer expires at 5:00 p.m., New York City time, on       ,
   2003, unless extended. We do not currently intend to extend the exchange
   offer.

..  Tenders of outstanding notes may be withdrawn at any time prior to the
   expiration of the exchange offer.

..  The exchange of outstanding notes for new notes will not be a taxable event
   for U.S. federal income tax purposes.


       Terms of the New 7.5% Senior Notes Offered in the Exchange Offer

Maturity
..  The new notes will mature on September 15, 2013.

Interest
..  Interest on the new notes is payable on March 15 and September 15 of each
   year, beginning September 15, 2003.
..  Interest will accrue from March 5, 2003.

Redemption
..  We may redeem some or all of the new notes at any time on or after September
   15, 2008 at redemption prices listed in "Description of the New
   Notes--Optional Redemption," and we may redeem some or all of the notes
   before that date by the payment of a make-whole premium.
..  Subject to certain limitations, we may also redeem up to 35% of the new
   notes using the proceeds of certain equity offerings completed before
   September 15, 2006.

Change of Control
..  If we experience a change of control, subject to certain conditions, we must
   offer to purchase the new notes.

Ranking
..  The new notes are unsecured. The new notes rank equally in right of payment
   with all of our other existing and future senior debt and senior in right of
   payment to all of our future subordinated debt.

                               -----------------

    PLEASE READ "RISK FACTORS" ON PAGE 6 FOR A DISCUSSION OF FACTORS YOU SHOULD
CONSIDER BEFORE PARTICIPATING IN THE EXCHANGE OFFER.

                               -----------------

   THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                               -----------------

              The date of this prospectus is              , 2003.

<PAGE>

   This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission. In making your investment decision, you
should rely only on the information contained in this prospectus and in the
accompanying letter of transmittal. We have not authorized anyone to provide
you with any other information. If you receive any unauthorized information,
you must not rely on it. We are not making an offer to sell these securities in
any state where the offer is not permitted. You should not assume that the
information contained in this prospectus, or the documents incorporated by
reference into this prospectus, is accurate as of any date other than the date
on the front cover of this prospectus or the date of such document, as the case
may be.

                               -----------------

                               TABLE OF CONTENTS

<TABLE>
                  <S>                                 <C>
                  PROSPECTUS SUMMARY.................       1
                  RISK FACTORS.......................       6
                  EXCHANGE OFFER.....................      15
                  RATIOS OF EARNINGS TO FIXED CHARGES      22
                  USE OF PROCEEDS....................      23
                  DESCRIPTION OF THE NEW NOTES.......      24
                  FEDERAL INCOME TAX CONSIDERATIONS..      56
                  PLAN OF DISTRIBUTION...............      56
                  LEGAL MATTERS......................      57
                  EXPERTS............................      57
                  WHERE YOU CAN FIND MORE INFORMATION      57
                  LETTER OF TRANSMITTAL.............. ANNEX A
</TABLE>

                               -----------------


                                       i

<PAGE>

                              PROSPECTUS SUMMARY

   This summary may not contain all the information that may be important to
you. You should read this entire prospectus and the documents we have
incorporated into this prospectus by reference before making an investment
decision. You should carefully consider the information set forth under "Risk
Factors." In addition, certain statements include forward-looking information
which involves risks and uncertainties. Please read "Forward-Looking
Statements." Unless this prospectus otherwise indicates or the context
otherwise requires, the terms "we," "our," "us" "Chesapeake" or the "Company"
as used in this prospectus refer to Chesapeake Energy Corporation and its
subsidiaries.

                                  The Company

   We are among the ten largest independent natural gas producers in the United
States, owning interests in approximately 13,400 producing oil and gas wells
(which includes the approximately 1,900 wells we recently acquired from ONEOK
and the approximately 800 wells we recently acquired from the El Paso
Corporation and Vintage Petroleum, Inc.). We estimate that our proved reserves
were approximately 2.75 trillion cubic feet of gas equivalent as of December
31, 2002, pro forma for the recently completed ONEOK, El Paso and Vintage
acquisitions. Approximately 91% of our pro forma proved reserves are natural
gas and 89% of our pro forma proved reserves are located in the Mid-Continent
region of the United States, which includes Oklahoma, western Arkansas,
southwestern Kansas and the Texas Panhandle. We have smaller operations in the
Deep Giddings field in Texas, the Tuscaloosa Trend in Louisiana, the Permian
Basin region of southeastern New Mexico and the Williston Basin of North Dakota
and Montana.

   Our executive offices are located at 6100 North Western Avenue, Oklahoma
City, Oklahoma 73118, and our telephone number is (405) 848-8000.

                              The Exchange Offer

   On March 5, 2003, we completed a private offering of the outstanding notes.
As part of the private offering, we entered into a registration rights
agreement with the initial purchasers of the outstanding notes in which we
agreed, among other things, to deliver this prospectus to you and to use our
best efforts to complete the exchange offer within 240 days after the date we
issued the outstanding notes. The following is a summary of the exchange offer.

Exchange Offer..............  We are offering to exchange new notes for
                              outstanding notes.

Expiration Date.............  The exchange offer will expire at 5:00 p.m. New
                              York City time, on                     , 2003,
                              unless we decide to extend it.

Condition to the Exchange     The registration rights agreement does not
  Offer.....................  require us to accept outstanding notes for
                              exchange if the exchange offer or the making of
                              any exchange by a holder of the outstanding notes
                              would violate any applicable law or
                              interpretation of the staff of the SEC. A minimum
                              aggregate principal amount of outstanding notes
                              being tendered is not a condition to the exchange
                              offer.

Procedures for Tendering
  Outstanding Notes.........  To participate in the exchange offer, you must
                              follow the procedures established by The
                              Depository Trust Company, which we call "DTC,"

                                      1

<PAGE>

                              for tendering notes held in book-entry form.
                              These procedures, which we call "ATOP," require
                              that the exchange agent receive, prior to the
                              expiration date of the exchange offer, a computer
                              generated message known as an "agent's message"
                              that is transmitted through DTC's automated
                              tender offer program and that DTC confirm that:

                             .  DTC has received your instructions to exchange
                                your notes; and
                             .  you agree to be bound by the terms of the
                                letter of transmittal

                              For more details, please refer to the sections of
                              this prospectus entitled "Exchange Offer--Terms
                              of the Exchange Offer" and
                              "--Procedures for Tendering."

Guaranteed Delivery           None.
  Procedures................

Withdrawal of Tenders.......  You may withdraw your tender of outstanding notes
                              at any time prior to the expiration date. To
                              withdraw, you must submit a notice of withdrawal
                              to exchange agent using ATOP procedures before
                              5:00 p.m. New York City time on the expiration
                              date of the exchange offer. Please read "Exchange
                              Offer--Withdrawal of Tenders."

Acceptance of Outstanding
  Notes and Delivery of New
  Notes.....................  If you fulfill all conditions required for proper
                              acceptance of outstanding notes, we will accept
                              any and all outstanding notes that you properly
                              tender in the exchange offer on or before 5:00
                              p.m. New York City time on the expiration date.
                              We will return any outstanding note that we do
                              not accept for exchange to you without expense as
                              promptly as practicable after the expiration
                              date. We will deliver the new notes as promptly
                              as practicable after the expiration date and
                              acceptance of the outstanding notes for exchange.
                              Please refer to the section in this prospectus
                              entitled "Exchange Offer--Terms of the Exchange
                              Offer."

Fees and Expenses...........  We will bear all expenses related to the exchange
                              offer. Please refer to the section in this
                              prospectus entitled "Exchange Offer--Fees and
                              Expenses."

Use of Proceeds.............  The issuance of the new notes will not provide us
                              with any new proceeds. We are making this
                              exchange offer solely to satisfy our obligations
                              under our registration rights agreement.

Consequences of Failure to
  Exchange Outstanding Notes  If you do not exchange your outstanding notes in
                              this exchange offer, you will no longer be able
                              to require us to register the outstanding notes
                              under the Securities Act except in the limited
                              circumstances provided under our registration
                              rights agreement. In addition, you will not be
                              able to resell, offer to resell or otherwise
                              transfer the outstanding notes unless we have
                              registered the outstanding notes under the
                              Securities Act, or unless you resell, offer to
                              resell or otherwise transfer them under an
                              exemption from the registration requirements of,
                              or in a transaction not subject to, the
                              Securities Act.

                                      2

<PAGE>

U.S. Federal Income Tax
  Considerations............  The exchange of new notes for outstanding notes
                              in the exchange offer should not be a taxable
                              event for U.S. federal income tax purposes.
                              Please read "Federal Income Tax Considerations."

Exchange Agent..............  We have appointed The Bank of New York as
                              exchange agent for the exchange offer. You should
                              direct questions and requests for assistance and
                              requests for additional copies of this prospectus
                              (including the letter of transmittal) to the
                              exchange agent addressed as follows: The Bank of
                              New York, Corporate Trust Operations,
                              Reorganization Unit, 101 Barclay Street--7 East,
                              New York, New York, 10286. Eligible institutions
                              may make requests by facsimile at (212) 298-1915.

                                      3

<PAGE>

                            Terms of the New Notes

   The new notes will be identical to the outstanding notes except that the new
notes are registered under the Securities Act and will not have restrictions on
transfer, registration rights or provisions for additional interest and will
contain different administrative terms. The new notes will evidence the same
debt as the outstanding notes, and the same indenture will govern the new notes
and the outstanding notes.

   The following summary contains basic information about the new notes and is
not intended to be complete. It does not contain all the information that is
important to you. For a more complete understanding of the new notes, please
refer to the section of this prospectus entitled "Description of the New Notes."

Issuer......................  Chesapeake Energy Corporation.

Notes Offered...............  $300,000,000 in aggregate principal amount of
                              7.50% Senior Notes due 2013.

Maturity....................  September 15, 2013.

Interest on the New Notes...  7.50% annually.

Interest Payment Dates......  March 15 and September 15 of each year,
                              commencing on September 15, 2003.

Sinking Fund................  None.

Optional Redemption.........  On or after September 15, 2008, we may redeem
                              some or all of the notes at the redemption prices
                              listed in the "Description of the New
                              Notes--Optional Redemption" section of this
                              prospectus, plus accrued but unpaid interest to
                              the date of redemption.

                              Until September 15, 2006, we may choose to redeem
                              up to 35% of the original principal amount of the
                              notes (and any additional notes of the same
                              series that we may issue later) with money we
                              raise in certain equity offerings, as long as:

                             .  we pay the holders of notes (and any such
                                additional notes) redeemed a redemption price
                                of 107.50% of the principal amount of the notes
                                (and any such additional notes) we redeem, plus
                                accrued but unpaid interest to the date of
                                redemption; and

                             .  at least 65% of the original aggregate
                                principal amount of the notes (and any
                                additional notes) remains outstanding after
                                such redemption.

                              In addition to the foregoing, we may redeem some
                              or all of the notes prior to September 15, 2008
                              by the payment of a make-whole premium described
                              in the "Description of the New Notes--Optional
                              Redemption" section of this prospectus.

Change of Control...........  If a Change of Control of our company occurs,
                              subject to certain conditions, we must give
                              holders of the new notes an opportunity to

                                      4

<PAGE>

                              sell us their notes at a purchase price of 101%
                              of the principal amount of the new notes, plus
                              accrued but unpaid interest to the date of
                              purchase. The term "Change of Control" is defined
                              in the "Description of the New Notes--Certain
                              Definitions" section of this prospectus.

Guarantees..................  The new notes will be unconditionally guaranteed,
                              jointly and severally, by each of our existing
                              and future restricted subsidiaries. All of our
                              existing subsidiaries other than Chesapeake
                              Energy Marketing, Inc. are restricted
                              subsidiaries.

Ranking.....................  The new notes will be unsecured and will rank
                              equally in right of payment to all of our
                              existing and future senior indebtedness. The new
                              notes will rank senior in right of payment to all
                              of our future subordinated indebtedness. Please
                              read "Description of the New Notes--Ranking."

Restrictive Covenants.......  The indenture governing the notes contains, among
                              other things, limitations on our ability and the
                              ability of our restricted subsidiaries to:

                             .  incur additional indebtedness;

                             .  pay dividends on our capital stock or redeem,
                                repurchase or retire our capital stock or
                                subordinated indebtedness;

                             .  make investments and other restricted payments;

                             .  create restrictions on the payment of dividends
                                or other amounts to us from our restricted
                                subsidiaries;

                             .  incur liens;

                             .  engage in transactions with affiliates;

                             .  sell assets; and

                             .  consolidate, merge or transfer assets.

                              All of these limitations are subject to a number
                              of important exceptions and qualifications, which
                              are described in the "Description of the New
                              Notes--Certain Covenants" section of this
                              prospectus.

Transfer Restrictions;
  Absence of a Public Market
  for the Notes.............  The new notes generally will be freely
                              transferable, but will also be new securities for
                              which there will not initially be a market. There
                              can be no assurance as to the development or
                              liquidity of any market for the new notes.

                                 Risk Factors

   Please read "Risk Factors," beginning on page 6 of this prospectus, for a
discussion of certain factors that you should consider before participating in
the exchange offer.

                                      5

<PAGE>

                                 RISK FACTORS

   In addition to the other information set forth elsewhere or incorporated by
reference in this prospectus, the following factors relating to our company and
the exchange offer and the new notes should be considered carefully in deciding
whether to participate in the exchange offer.

Risks Related to Our Business

   Oil and gas prices are volatile. A decline in prices could adversely affect
our financial results, cash flows, access to capital and ability to grow.

   Our revenues, operating results, profitability, future rate of growth and
the carrying value of our oil and gas properties depend primarily upon the
prices we receive for our oil and gas. Prices also affect the amount of cash
flow available for capital expenditures and our ability to borrow money or
raise additional capital. The amount we can borrow from banks is subject to
periodic redeterminations based on prices specified by our bank group at the
time of redetermination. In addition, we may have ceiling test writedowns in
the future if prices fall significantly.

   Historically, the markets for oil and gas have been volatile and they are
likely to continue to be volatile. Wide fluctuations in oil and gas prices may
result from relatively minor changes in the supply of and demand for oil and
natural gas, market uncertainty and other factors that are beyond our control,
including:

  .   worldwide and domestic supplies of oil and gas;

  .   weather conditions;

  .   the level of consumer demand;

  .   the price and availability of alternative fuels;

  .   risks associated with owning and operating drilling rigs;

  .   the availability of pipeline capacity;

  .   the price and level of foreign imports;

  .   domestic and foreign governmental regulations and taxes;

  .   the ability of the members of the Organization of Petroleum Exporting
      Countries to agree to and maintain oil price and production controls;

  .   political instability or armed conflict in oil-producing regions; and

  .   the overall economic environment.

   These factors and the volatility of the energy markets make it extremely
difficult to predict future oil and gas price movements with any certainty.
Declines in oil and gas prices would not only reduce revenue, but could reduce
the amount of oil and gas that we can produce economically and, as a result,
could have a material adverse effect on our financial condition, results of
operations and reserves. Further, oil and gas prices do not necessarily move in
tandem. Because approximately 91% of our proved reserves are currently natural
gas reserves, we are more affected by movements in natural gas prices.

                                      6

<PAGE>

   Our level of indebtedness and preferred stock may adversely affect
operations and limit our growth, and we may have difficulty making debt service
and preferred stock dividend payments on our indebtedness, including the new
notes and our preferred stock as such payments become due.

   As of March 31, 2003, we had $1.98 billion in aggregate principal amount of
long-term indebtedness outstanding, none of which was secured indebtedness,
plus preferred stock outstanding having an aggregate liquidation preference of
$379.9 million. Our long-term indebtedness represented 65% of our total book
capitalization at December 31, 2002. We will continue to be highly leveraged
after the exchange offer.

   Our level of indebtedness affects our operations in several ways, including
the following:

  .   a significant portion of our cash flows must be used to service our
      indebtedness and we cannot assure you that our business will generate
      sufficient cash flows from operations to enable us to continue to meet
      our obligations under our indebtedness and our stated dividends on our
      preferred stock;

  .   a high level of debt increases our vulnerability to general adverse
      economic and industry conditions;

  .   the covenants contained in the agreements governing our outstanding
      indebtedness limit our ability to borrow additional funds, dispose of
      assets, pay dividends and make certain investments;

  .   our debt covenants may also affect our flexibility in planning for, and
      reacting to, changes in the economy and in our industry and the rights
      and preferences applicable to our preferred stock may limit our ability
      to pay dividends on our common stock; and

  .   a high level of debt and preferred stock may impair our ability to obtain
      additional financing in the future for working capital, capital
      expenditures, acquisitions, general corporate or other purposes.

   We may incur additional debt, including significant secured indebtedness, or
issue additional series of preferred stock, in order to make future
acquisitions or to develop our properties. A higher level of indebtedness
increases the risk that we may default on our debt obligations, including the
new notes. Our ability to meet our debt obligations and to reduce our level of
indebtedness depends on our future performance. General economic conditions,
oil and gas prices and financial, business and other factors affect our
operations and our future performance. Many of these factors are beyond our
control. We may not be able to generate sufficient cash flow to pay the
interest on our debt, and future working capital, borrowings or equity
financing may not be available to pay or refinance such debt. Factors that will
affect our ability to raise cash through an offering of our capital stock or a
refinancing of our debt include financial market conditions, the value of our
assets and our performance at the time we need capital.

   In addition, our bank borrowing base is subject to periodic
redeterminations. We could be forced to repay a portion of our bank borrowings
due to redeterminations of our borrowing base. If we are forced to do so, we
may not have sufficient funds to make such repayments. If we do not have
sufficient funds and are otherwise unable to negotiate renewals of our
borrowings or arrange new financing, we may have to sell significant assets.
Any such sale could have a material adverse effect on our business and
financial results.

   Our industry is extremely competitive.

   The energy industry is extremely competitive. This is especially true with
regard to exploration for, and development and production of, new sources of
oil and natural gas. As an independent producer of oil and natural gas, we
frequently compete against companies that are larger and financially stronger
in acquiring properties suitable for exploration, in contracting for drilling
equipment and other services and in securing trained personnel.

                                      7

<PAGE>

   Our commodity price risk management activities may reduce the realized
prices received for our oil and gas sales.

   In order to manage our exposure to price volatility in marketing our oil and
gas, we enter into oil and gas price risk management arrangements for a portion
of our expected production. These transactions are limited in life. While
intended to reduce the effects of volatile oil and gas prices, commodity price
risk management transactions may limit the prices we actually realize and we
may experience reductions in oil and gas revenues from our commodity price risk
management activities in the future. In addition, our commodity price risk
management transactions may expose us to the risk of financial loss in certain
circumstances, including instances in which:

  .   our production is less than expected;

  .   there is a widening of price differentials between delivery points for
      our production and the delivery point assumed in the hedge arrangement; or

  .   the counterparties to our contracts fail to perform under the contracts.

   Some of our commodity price and interest rate risk management arrangements
require us to deliver cash collateral or other assurances of performance to the
counterparties in the event that our payment obligations with respect to our
risk management transactions exceed certain levels. As of March 31, 2003, we
were required to post $14.5 million of collateral with one of our
counterparties through letters of credit issued under our bank credit facility.
Future collateral requirements are uncertain and will depend on arrangements
with our counterparties and highly volatile natural gas and oil prices.

   Estimates of oil and gas reserves are uncertain and inherently imprecise.

   This prospectus and the documents incorporated by reference in this
prospectus contain estimates of our proved reserves and the estimated future
net revenues from our proved reserves as well as estimates relating to our
recent acquisitions. These estimates are based upon various assumptions,
including assumptions required by the SEC relating to oil and gas prices,
drilling and operating expenses, capital expenditures, taxes and availability
of funds. The process of estimating oil and gas reserves is complex. The
process involves significant decisions and assumptions in the evaluation of
available geological, geophysical, engineering and economic data for each
reservoir. Therefore, these estimates are inherently imprecise.

   Actual future production, oil and gas prices, revenues, taxes, development
expenditures, operating expenses and quantities of recoverable oil and gas
reserves most likely will vary from these estimates. Such variations may be
significant and could materially affect the estimated quantities and present
value of our proved reserves. In addition, we may adjust estimates of proved
reserves to reflect production history, results of exploration and development
drilling, prevailing oil and gas prices and other factors, many of which are
beyond our control. Our properties may also be susceptible to hydrocarbon
drainage from production by operators on adjacent properties.

   At December 31, 2002 approximately 26% by volume of our estimated proved
reserves were undeveloped. Recovery of undeveloped reserves requires
significant capital expenditures and successful drilling operations. The
estimates of these reserves include the assumption that we will make
significant capital expenditures to develop the reserves, including $248
million in 2003. Although we have prepared estimates of our oil and gas
reserves and the costs associated with these reserves in accordance with
industry standards, the estimated costs may not be accurate, development may
not occur as scheduled and results may not be as estimated.

   You should not assume that the present values referred to in the documents
incorporated by reference in this prospectus represent the current market value
of our estimated oil and gas reserves. In accordance with SEC requirements, the
estimates of our present values are based on prices and costs as of the date of
the estimates. The December 31, 2002 present value is based on weighted average
oil and gas prices of $30.18 per barrel of oil and $4.28 per mcf of natural
gas. Actual future prices and costs may be materially higher or lower than the
prices and costs as of the date of an estimate.

                                      8

<PAGE>

   Any changes in consumption by oil and gas purchasers or in governmental
regulations or taxation will also affect actual future net cash flows.

   The timing of both the production and the expenses from the development and
production of oil and gas properties will affect both the timing of actual
future net cash flows from our proved reserves and their present value. In
addition, the 10% discount factor, which is required by the SEC to be used in
calculating discounted future net cash flows for reporting purposes, is not
necessarily the most accurate discount factor. The effective interest rate at
various times and the risks associated with our business or the oil and gas
industry in general will affect the accuracy of the 10% discount factor.

   If we do not make significant capital expenditures, we may not be able to
replace reserves.

   Our exploration, development and acquisition activities require substantial
capital expenditures. Historically, we have funded our capital expenditures
through a combination of cash flows from operations, our bank credit facility
and debt and equity issuances. Future cash flows are subject to a number of
variables, such as the level of production from existing wells, prices of oil
and gas, and our success in developing and producing new reserves. If revenue
were to decrease as a result of lower oil and gas prices or decreased
production, and our access to capital were limited, we would have a reduced
ability to replace our reserves. If our cash flow from operations is not
sufficient to fund our capital expenditure budget, there can be no assurance
that additional bank debt, debt or equity issuances or other methods of
financing will be available to meet these requirements.

   Our recent reserve estimates have not been reviewed by independent petroleum
engineers.

   Our estimates of proved reserves attributed to our ONEOK, El Paso and
Vintage acquisitions included or incorporated by reference in this prospectus
have not been reviewed or reported on by independent petroleum engineers. These
estimates were prepared by our own engineers and professionals using criteria
otherwise in compliance with SEC rules. Furthermore, our internal reserve
estimates for the El Paso and Vintage acquisitions are based upon data
available to us, which may not be as complete as data available on our other
properties. Oil and gas pricing can affect estimates of quantities of proved
reserves due to the impact of pricing on ultimate economic recovery. Estimates
prepared by independent engineers might be different than our internal
estimates.

   If we are not able to replace reserves, we may not be able to sustain
production.

   Our future success depends largely upon our ability to find, develop or
acquire additional oil and gas reserves that are economically recoverable.
Unless we replace the reserves we produce through successful development,
exploration or acquisition, our proved reserves will decline over time. In
addition, approximately 26% by volume of our total estimated proved reserves at
December 31, 2002 were undeveloped. By their nature, undeveloped reserves are
less certain. Recovery of such reserves will require significant capital
expenditures and successful drilling operations. We cannot assure you that we
can successfully find and produce reserves economically in the future. In
addition, we may not be able to acquire proved reserves at acceptable costs.

   Acquisitions are subject to the uncertainties of evaluating recoverable
reserves and potential liabilities.

   Our recent growth is due in part to acquisitions of exploration and
production companies and producing properties. We expect acquisitions will also
contribute to our future growth. Successful acquisitions require an assessment
of a number of factors, many of which are beyond our control. These factors
include recoverable reserves, exploration potential, future oil and gas prices,
operating costs and potential environmental and other liabilities. Such
assessments are inexact and their accuracy is inherently uncertain. In
connection with our assessments, we perform a review of the acquired
properties, which we believe is generally consistent with industry practices.
However, such a review will not reveal all existing or potential problems. In
addition, our review may not permit us to become sufficiently familiar with the
properties to fully assess their deficiencies and capabilities. We do not
inspect every well. Even when we inspect a well, we do not always discover
structural,

                                      9

<PAGE>

subsurface and environmental problems that may exist or arise. Our review prior
to signing a definitive purchase agreement may be even more limited. For
example, based on our knowledge of the properties and in exchange for
concessions in the negotiations for the El Paso acquisition, we elected to
forego most due diligence review including environmental site inspections prior
to signing a definitive agreement which contains limited remedies against the
seller.

   We are generally not entitled to contractual indemnification for preclosing
liabilities, including environmental liabilities, on acquisitions, including
our recent El Paso and Vintage acquisitions. Normally, we acquire interests in
properties on an "as is" basis with limited remedies for breaches of
representations and warranties. We could incur significant unknown liabilities,
including environmental liabilities, or experience losses due to title defects,
in our recent acquisitions for which we have limited or no contractual remedies
or insurance coverage.

   In addition, competition for producing oil and gas properties is intense and
many of our competitors have financial and other resources that are
substantially greater than those available to us. Therefore, we may not be able
to acquire oil and gas properties that contain economically recoverable
reserves or be able to complete such acquisitions on acceptable terms.

   Additionally, significant acquisitions can change the nature of our
operations and business depending upon the character of the acquired
properties, which may have substantially different operating and geological
characteristics or be in different geographic locations than our existing
properties. While it is our current intention to continue to concentrate on
acquiring properties with development and exploration potential located in the
Mid-Continent region, there can be no assurance that in the future we will not
decide to pursue acquisitions or properties located in other geographic
regions. To the extent that such acquired properties are substantially
different than our existing properties, our ability to efficiently realize the
economic benefits of such transactions may be limited.

   Future price declines may result in a write-down of our asset carrying
values.

   We utilize the full cost method of accounting for costs related to our oil
and gas properties. Under this method, all such costs (productive and
nonproductive) are capitalized and amortized on an aggregate basis over the
estimated lives of the properties using the units-of-production method. These
capitalized costs are subject to a ceiling test, however, which limits such
pooled costs to the aggregate of the present value of future net revenues
attributable to proved oil and gas reserves discounted at 10% plus the lower of
cost or market value of unproved properties. The full cost ceiling is evaluated
at the end of each quarter utilizing the prices for oil and gas at that date. A
significant decline in oil and gas prices from current levels, or other
factors, without other mitigating circumstances, could cause a future
write-down of capitalized costs and a non-cash charge against future earnings.

   Oil and gas drilling and producing operations are hazardous and expose us to
environmental liabilities.

   Oil and gas operations are subject to many risks, including well blowouts,
cratering and explosions, pipe failure, fires, formations with abnormal
pressures, uncontrollable flows of oil, natural gas, brine or well fluids, and
other environmental hazards and risks. Our drilling operations involve risks
from high pressures and from

                                      10

<PAGE>

mechanical difficulties such as stuck pipes, collapsed casings and separated
cables. If any of these risks occurs, we could sustain substantial losses as a
result of:

  .   injury or loss of life;

  .   severe damage to or destruction of property, natural resources and
      equipment;

  .   pollution or other environmental damage;

  .   clean-up responsibilities;

  .   regulatory investigations and penalties; and

  .   suspension of operations.

   Our liability for environmental hazards includes those created either by the
previous owners of properties that we purchase or lease or by acquired
companies prior to the date we acquire them. In accordance with industry
practice, we maintain insurance against some, but not all, of the risks
described above. We cannot assure you that our insurance will be adequate to
cover casualty losses or liabilities. Also, we cannot predict the continued
availability of insurance at premium levels that justify its purchase.

   Exploration and development drilling may not result in commercially
productive reserves.

   We do not always encounter commercially productive reservoirs through our
drilling operations. The new wells we drill or participate in may not be
productive and we may not recover all or any portion of our investment in wells
we drill or participate in. The seismic data and other technologies we use do
not allow us to know conclusively prior to drilling a well that oil or gas is
present or may be produced economically. The cost of drilling, completing and
operating a well is often uncertain, and cost factors can adversely affect the
economics of a project. Our efforts will be unprofitable if we drill dry wells
or wells that are productive but do not produce enough reserves to return a
profit after drilling, operating and other costs. Further, our drilling
operations may be curtailed, delayed or canceled as a result of a variety of
factors, including:

  .   unexpected drilling conditions;

  .   title problems;

  .   pressure or irregularities in formations;

  .   equipment failures or accidents;

  .   adverse weather conditions;

  .   compliance with environmental and other governmental requirements; and

  .   cost of, or shortages or delays in the availability of, drilling rigs and
      equipment.

   The loss of key personnel could adversely affect our ability to operate.

   We depend, and will continue to depend in the foreseeable future, on the
services of our officers and key employees with extensive experience and
expertise in evaluating and analyzing producing oil and gas properties and
drilling prospects, maximizing production from oil and gas properties and
marketing oil and gas production. Our ability to retain our officers and key
employees is important to our continued success and growth. The unexpected loss
of the services of one or more of these individuals could have a detrimental
effect on our business.

   Lower oil and gas prices could negatively impact our ability to borrow.

   Our current bank credit facility limits our borrowings to a borrowing base
of $250 million as of the date of this prospectus. The borrowing base is
determined periodically at the discretion of a majority of the banks and is
based in part on oil and gas prices. Additionally, some of our indentures,
including the indenture under which the new notes will be issued, contain
covenants limiting our ability to incur indebtedness in addition to that
incurred under our bank credit facility. These indentures limit our ability to
incur additional indebtedness unless we meet

                                      11

<PAGE>

one of two alternative tests. The first alternative is based on a percentage of
our adjusted consolidated net tangible assets, which is determined using
discounted future net revenues from proved oil and gas reserves as of the end
of each year. As of the date of this prospectus, we cannot incur additional
indebtedness under this first alternative of the debt incurrence test. The
second alternative is based on the ratio of our adjusted consolidated EBITDA
(as defined in the agreement) to our adjusted consolidated interest expense
over a trailing twelve-month period. As of the date of this prospectus, we are
permitted to incur significant additional indebtedness under this second
alternative of the debt incurrence test. Lower oil and gas prices in the future
could reduce our adjusted consolidated EBITDA (as defined in the agreement), as
well as our adjusted consolidated net tangible assets, and thus could reduce
our ability to incur additional indebtedness.

   Our oil and gas marketing activities may expose us to claims from royalty
owners.

   In addition to marketing our own oil and gas production, our marketing
activities include marketing oil and gas production for working interest owners
and royalty owners in the wells that we operate. These activities include the
operation of gathering systems and the sale of oil and natural gas under
various arrangements. In the past two years, royalty owners have commenced
litigation against a number of companies in the oil and gas production business
claiming that amounts paid for production attributable to the royalty owners'
interest violated the terms of the applicable leases and state law, that
deductions from the proceeds of oil and gas production were unauthorized under
the applicable leases and that amounts received by upstream sellers should be
used to compute the amounts paid to the royalty owners. Some of this litigation
was commenced as class action suits including five class action suits filed
against Chesapeake. As new cases are decided and the law in this area continues
to develop, our liability relating to the marketing of oil and gas may increase.

Risks Related to the Exchange Offer and the New Notes

   If you do not properly tender your outstanding notes, you will continue to
hold unregistered outstanding notes and your ability to transfer outstanding
notes will be adversely affected.

   We will only issue new notes in exchange for outstanding notes that you
timely and properly tender. Therefore, you should allow sufficient time to
ensure timely delivery of the outstanding notes and you should carefully follow
the instructions on how to tender your outstanding notes. Neither we nor the
exchange agent is required to tell you of any defects or irregularities with
respect to your tender of outstanding notes.

   If you do not exchange your outstanding notes for new notes pursuant to the
exchange offer, the outstanding notes you hold will continue to be subject to
the existing transfer restrictions. In general, you may not offer or sell the
outstanding notes except under an exemption from, or in a transaction not
subject to, the Securities Act and applicable state securities laws. We do not
plan to register outstanding notes under the Securities Act unless our
registration rights agreement with the initial purchasers of the outstanding
notes requires us to do so. Further, if you continue to hold any outstanding
notes after the exchange offer is consummated, you may have trouble selling
them because there will be fewer such notes outstanding.

   If an active trading market does not develop for the new notes, you may be
unable to sell the new notes or to sell the new notes at a price that you deem
sufficient.

   The new notes will be new securities for which there currently is no
established trading market. Although the initial purchasers of the outstanding
notes have informed us that they intend to make a market in the new notes after
the exchange offer, the initial purchasers may stop making a market at any
time. Finally, if a large number of holders of outstanding notes do not tender
outstanding notes or tender outstanding notes improperly, the limited amount of
new notes that would be issued and outstanding after we consummate the exchange
offer could adversely affect the development of a market for these new notes.

                                      12

<PAGE>

   A guarantee could be voided if the guarantor fraudulently transferred the
guarantee at the time it incurred the indebtedness, which could result in the
noteholders being able to rely on only Chesapeake to satisfy claims.

   Under U.S. bankruptcy law and comparable provisions of state fraudulent
transfer laws, a guarantee can be voided, or claims under a guarantee may be
subordinated to all other debts of that guarantor if, among other things, the
guarantor, at the time it incurred the indebtedness evidenced by its guarantee:

  .   intended to hinder, delay or defraud any present or future creditor or
      received less than reasonably equivalent value or fair consideration for
      the incurrence of the guarantee;

  .   was insolvent or rendered insolvent by reason of such incurrence;

  .   was engaged in a business or transaction for which the guarantor's
      remaining assets constituted unreasonably small capital; or

  .   intended to incur, or believed that it would incur, debts beyond its
      ability to pay those debts as they mature.

   In addition, any payment by that guarantor under a guarantee could be voided
and required to be returned to the guarantor or to a fund for the benefit of
the creditors of the guarantor.

   The measures of insolvency for purposes of fraudulent transfer laws vary
depending upon the governing law. Generally, a guarantor would be considered
insolvent if:

  .   the sum of its debts, including contingent liabilities, was greater than
      the fair saleable value of all of its assets;

  .   the present fair saleable value of its assets was less than the amount
      that would be required to pay its probable liability on its existing
      debts, including contingent liabilities, as they became absolute and
      mature; or

  .   it could not pay its debts as they became due.

   On the basis of historical financial information, recent operating history
and other factors, we believe that the subsidiary guarantees are being incurred
for proper purposes and in good faith and that each subsidiary guarantor, after
giving effect to its guarantee of the notes, will not be insolvent, have
unreasonably small capital for the business in which it is engaged or have
incurred debts beyond its ability to pay those debts as they mature. We cannot
be certain, however, that a court would agree with our conclusions in this
regard.

   Holders of the new notes, like holders of the outstanding notes, will be
effectively subordinated to all of our and the subsidiary guarantors' secured
indebtedness and to all liabilities of our non-guarantor subsidiaries.

   Holders of our secured indebtedness, including the indebtedness under our
revolving bank credit facility, have claims with respect to our assets
constituting collateral for their indebtedness that are prior to your claims
under the new notes. In the event of a default on the new notes or our
bankruptcy, liquidation or reorganization, those assets would be available to
satisfy obligations with respect to the indebtedness secured thereby before any
payment could be made on the new notes. Accordingly, the secured indebtedness
would effectively be senior to the new notes to the extent of the value of the
collateral securing the indebtedness. While the indenture governing the notes
places some limitations on our ability to create liens, there are significant
exceptions to these limitations, including with respect to sale and leaseback
transactions, that will allow us to secure some kinds of indebtedness without
equally and ratably securing the new notes. To the extent the value of the
collateral is not sufficient to satisfy the secured indebtedness, the holders
of that indebtedness would be entitled to share with the holders of the new
notes and the holders of other claims against us with respect to our other
assets.

                                      13

<PAGE>

   In addition, the new notes are not guaranteed by all of our subsidiaries,
and our non-guarantor subsidiary is permitted to incur additional indebtedness
under the indenture. As a result, holders of the new notes will be effectively
subordinated to claims of third party creditors, including holders of
indebtedness, and preferred shareholders of our non-guarantor subsidiary.
Claims of those other creditors, including trade creditors, secured creditors,
authorities, holders of indebtedness or guarantees issued by this non-guarantor
subsidiary and preferred shareholders of our non-guarantor subsidiary, will
generally have priority as to the assets of the non-guarantor subsidiary over
our claims and equity interests. As a result, holders of our indebtedness,
including the holders of the new notes, will be effectively subordinated to all
those claims. As of March 31, 2003, our non-guarantor subsidiary had no
outstanding senior indebtedness.

                                      14

<PAGE>

                                EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

   In connection with the issuance of the outstanding notes, we entered into a
registration rights agreement. Under the registration rights agreement, we
agreed to:

  .   within 60 days after the original issuance of the outstanding notes on
      March 5, 2003, file a registration statement with the SEC with respect to
      a registered offer to exchange each outstanding note for a new note
      having terms substantially identical in all material respects to such
      note except that the new note will not contain terms with respect to
      transfer restrictions;

  .   use our best efforts to cause the registration statement to be declared
      effective under the Securities Act within 180 days after the original
      issuance of the outstanding notes;

  .   promptly following the effectiveness of the registration statement, offer
      the new notes in exchange for surrender of the outstanding notes; and

  .   keep the exchange offer open for not less than 30 days (or longer if
      required by applicable law) after the date notice of the exchange offer
      is mailed to the holders of the outstanding notes.

   We have fulfilled the agreements described in the first two of the preceding
bullet points and are now offering eligible holders of the outstanding notes
the opportunity to exchange their outstanding notes for new notes registered
under the Securities Act. Holders are eligible if they are not prohibited by
any law or policy of the SEC from participating in this exchange offer. The new
notes will be substantially identical to the outstanding notes except that the
new notes will not contain terms with respect to transfer restrictions,
registration rights or additional interest.

   Under limited circumstances, we agreed to use our best efforts to cause the
SEC to declare effective a shelf registration statement for the resale of the
outstanding notes. We also agreed to use our best efforts to keep the shelf
registration statement effective for up to two years after its effective date.
The circumstances include if:

  .   a change in law or in applicable interpretations thereof of the staff of
      the SEC does not permit us to effect the exchange offer; or

  .   for any other reason the exchange offer is not consummated within 240
      days from March 5, 2003, the date of the original issuance of the
      outstanding notes; or

  .   the initial purchasers notify us following consummation of the exchange
      offer that outstanding notes held by it are not eligible to be exchanged
      for new notes in the exchange offer; or

  .   certain holders are not eligible to participate in the exchange offer, or
      such holders do not receive freely tradeable securities on the date of
      the exchange.

   We will pay additional cash interest on the applicable outstanding notes,
subject to certain exceptions:

  .   if the exchange offer is not consummated on or before the 60th business
      day after this registration statement is declared effective,

  .   if obligated to file a shelf registration statement, we fail to file the
      shelf registration statement with the SEC on or prior to the 30th day
      after the date on which the obligation to file a shelf registration
      statement arises, which we refer to as the shelf filing date,

  .   if obligated to file a shelf registration statement due to the
      circumstances described in the first bullet point of the preceding
      paragraph, the shelf registration statement is not declared effective on
      or prior to the 180th day after the original issuance of the outstanding
      notes,

  .   if we are obligated to file a shelf registration statement due to the
      circumstances described in the second, third or fourth bullet points of
      the preceding paragraph, the shelf registration statement is not declared
      effective on or prior to the 60th day after the shelf filing date, or

                                      15

<PAGE>

  .   after this registration statement or the shelf registration statement, as
      the case may be, is declared effective, such registration statement
      thereafter ceases to be effective or usable (subject to certain
      exceptions) (each such event referred to in the preceding clauses being a
      "registration default");

from and including the date on which any such registration default occurs to
but excluding the date on which all registration defaults have been cured.

   The rate of the additional interest will be 0.5% per year for the first
90-day period immediately following the occurrence of a registration default,
and such rate will increase by an additional 0.5% per year with respect to each
subsequent 90-day period until all registration defaults have been cured, up to
a maximum additional interest rate of 2.0% per year. We will pay such
additional interest on regular interest payment dates. Such additional interest
will be in addition to any other interest payable from time to time with
respect to the outstanding notes and the new notes.

   Upon the effectiveness of this registration statement, the consummation of
the exchange offer, the effectiveness of a shelf registration statement, or the
effectiveness of a succeeding registration statement, as the case may be, the
interest rate borne by the notes from the date of such effectiveness or
consummation, as the case may be, will be reduced to the original interest
rate. However, if after any such reduction in interest rate, a different
registration default occurs, the interest rate may again be increased pursuant
to the preceding paragraph.

   To exchange your outstanding notes for transferable new notes in the
exchange offer, you will be required to make the following representations:

  .   any new notes will be acquired in the ordinary course of your business;

  .   you have no arrangement or understanding with any person or entity to
      participate in the distribution of the new notes;

  .   you are not engaged in and do not intend to engage in the distribution of
      the new notes;

  .   if you are a broker-dealer that will receive new notes for your own
      account in exchange for outstanding notes, you acquired those notes as a
      result of market-making activities or other trading activities and you
      will deliver a prospectus, as required by law, in connection with any
      resale of such new notes; and

  .   you are not our "affiliate," as defined in Rule 405 of the Securities Act.

   In addition, we may require you to provide information to be used in
connection with the shelf registration statement to have your outstanding notes
included in the shelf registration statement and benefit from the provisions
regarding additional interest described in the preceding paragraphs. A holder
who sells outstanding notes under the shelf registration statement generally
will be required to be named as a selling securityholder in the related
prospectus and to deliver a prospectus to purchasers. Such a holder will also
be subject to the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
registration rights agreement that are applicable to such a holder, including
indemnification obligations.

   The description of the registration rights agreement contained in this
section is a summary only. For more information, you should review the
provisions of the registration rights agreement that we filed with the SEC as
an exhibit to the registration statement of which this prospectus is a part.

Resale of New Notes

   Based on no action letters of the SEC staff issued to third parties, we
believe that new notes may be offered for resale, resold and otherwise
transferred by you without further compliance with the registration and
prospectus delivery provisions of the Securities Act if:

  .   you are not our "affiliate" within the meaning of Rule 405 under the
      Securities Act;

  .   such new notes are acquired in the ordinary course of your business; and

  .   you do not intend to participate in a distribution of the new notes.

                                      16

<PAGE>

   The SEC, however, has not considered the exchange offer for the new notes in
the context of a no action letter, and the SEC may not make a similar
determination as in the no action letters issued to these third parties.

   If you tender in the exchange offer with the intention of participating in
any manner in a distribution of the new notes, you

  .   cannot rely on such interpretations by the SEC staff; and

  .   must comply with the registration and prospectus delivery requirements of
      the Securities Act in connection with a secondary resale transaction.

   Unless an exemption from registration is otherwise available, any security
holder intending to distribute new notes should be covered by an effective
registration statement under the Securities Act. This registration statement
should contain the selling security holder's information required by Item 507
of Regulation S-K under the Securities Act. This prospectus may be used for an
offer to resell, resale or other retransfer of new notes only as specifically
described in this prospectus. Only broker-dealers that acquired the outstanding
notes as a result of market-making activities or other trading activities may
participate in the exchange offer. Each broker-dealer that receives new notes
for its own account in exchange for outstanding notes, where such outstanding
notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities, must acknowledge by way of the letter
of transmittal that it will deliver a prospectus in connection with any resale
of the new notes. Please read the section captioned "Plan of Distribution" for
more details regarding the transfer of new notes.

Terms of the Exchange Offer

   Subject to the terms and conditions described in this prospectus and in the
letter of transmittal, we will accept for exchange any outstanding notes
properly tendered and not withdrawn prior to 5:00 p.m. New York City time on
the expiration date. We will issue new notes in principal amount equal to the
principal amount of outstanding notes surrendered under the exchange offer.
Outstanding notes may be tendered only for new notes and only in integral
multiples of $1,000.

   The exchange offer is not conditioned upon any minimum aggregate principal
amount of outstanding notes being tendered for exchange.

   As of the date of this prospectus, $300,000,000 in aggregate principal
amount of the outstanding notes are outstanding. This prospectus is being sent
to DTC, the sole registered holder of the outstanding notes, and to all persons
that we can identify as beneficial owners of the outstanding notes. There will
be no fixed record date for determining registered holders of outstanding notes
entitled to participate in the exchange offer.

   We intend to conduct the exchange offer in accordance with the provisions of
the registration rights agreement, the applicable requirements of the
Securities Act and the Securities Exchange Act of 1934 and the rules and
regulations of the SEC. Outstanding notes whose holders do not tender for
exchange in the exchange offer will remain outstanding and continue to accrue
interest. These outstanding notes will be entitled to the rights and benefits
such holders have under the indenture relating to the notes and the
registration rights agreement.

   We will be deemed to have accepted for exchange properly tendered
outstanding notes when we have given oral or written notice of the acceptance
to the exchange agent and complied with the applicable provisions of the
registration rights agreement. The exchange agent will act as agent for the
tendering holders for the purposes of receiving the new notes from us.

   If you tender outstanding notes in the exchange offer, you will not be
required to pay brokerage commissions or fees or, subject to the letter of
transmittal, transfer taxes with respect to the exchange of outstanding notes.
We will pay all charges and expenses, other than certain applicable taxes
described below, in connecting with the exchange offer. It is important that
you read the section labeled "--Fees and Expenses" for more details regarding
fees and expenses incurred in the exchange offer.

                                      17

<PAGE>

   We will return any outstanding notes that we do not accept for exchange for
any reason without expense to their tendering holder as promptly as practicable
after the expiration or termination of the exchange offer.

Expiration Date

   The exchange offer will expire at 5:00 p.m. New York City time on
2003, unless, in our sole discretion, we extend it.

Extensions, Delays in Acceptance, Termination or Amendment

   We expressly reserve the right, at any time or various times, to extend the
period of time during which the exchange offer is open. We may delay acceptance
of any outstanding notes by giving oral or written notice of such extension to
their holders. During any such extensions, all outstanding notes previously
tendered will remain subject to the exchange offer, and we may accept them for
exchange.

   In order to extend the exchange offer, we will notify the exchange agent
orally or in writing of any extension. We will notify the registered holders of
outstanding notes of the extension no later than 9:00 a.m., New York City time,
on the business day after the previously scheduled expiration date.

   If any of the conditions described below under "--Conditions to the Exchange
Offer" have not been satisfied, we reserve the right, in our sole discretion

  .   to delay accepting for exchange any outstanding notes,

  .   to extend the exchange offer, or

  .   to terminate the exchange offer,

by giving oral or written notice of such delay, extension or termination to the
exchange agent. Subject to the terms of the registration rights agreement, we
also reserve the right to amend the terms of the exchange offer in any manner.

   Any such delay in acceptance, extension, termination or amendment will be
followed as promptly as practicable by oral or written notice thereof to the
registered holders of outstanding notes. If we amend the exchange offer in a
manner that we determine to constitute a material change, we will promptly
disclose such amendment by means of a prospectus supplement. The supplement
will be distributed to the registered holders of the outstanding notes.
Depending upon the significance of the amendment and the manner of disclosure
to the registered holders, we will extend the exchange offer if the exchange
offer would otherwise expire during such period.

Conditions to the Exchange Offer

   We will not be required to accept for exchange, or exchange any new notes
for, any outstanding notes if the exchange offer, or the making of any exchange
by a holder of outstanding notes, would violate applicable law or any
applicable interpretation of the staff of the SEC. Similarly, we may terminate
the exchange offer as provided in this prospectus before accepting outstanding
notes for exchange in the event of such a potential violation.

   In addition, we will not be obligated to accept for exchange the outstanding
notes of any holder that has not made to us the representations described under
"--Purpose and Effect of the Exchange Offer," "--Procedures for Tendering" and
"Plan of Distribution" and such other representations as may be reasonably
necessary under applicable SEC rules, regulations or interpretations to allow
us to use an appropriate form to register the new notes under the Securities
Act.

                                      18

<PAGE>

   We expressly reserve the right to amend or terminate the exchange offer, and
to reject for exchange any outstanding notes not previously accepted for
exchange, upon the occurrence of any of the conditions to the exchange offer
specified above. We will give oral or written notice of any extension,
amendment, non-acceptance or termination to the holders of the outstanding
notes as promptly as practicable.

   These conditions are for our sole benefit, and we may assert them or waive
them in whole or in part at any time or at various times in our sole
discretion. If we fail at any time to exercise any of these rights, this
failure will not mean that we have waived our rights. Each such right will be
deemed an ongoing right that we may assert at any time or at various times.

   In addition, we will not accept for exchange any outstanding notes tendered,
and will not issue new notes in exchange for any such outstanding notes, if at
such time any stop order has been threatened or is in effect with respect to
the registration statement of which this prospectus constitutes a part or the
qualification of the indenture relating to the notes under the Trust Indenture
Act of 1939.

Procedures for Tendering

   In order to participate in the exchange offer, you must properly tender your
outstanding notes to the exchange agent as described below. It is your
responsibility to properly tender your notes. We have the right to waive any
defects. However, we are not required to waive defects and are not required to
notify you of defects in your exchange.

   If you have any questions or need help in exchanging your notes, please call
the exchange agent whose address and phone number are described in the section
of the prospectus entitled "Where You Can Find More Information."

   All of the outstanding notes were issued in book-entry form, and all of the
outstanding notes are currently represented by global certificates held for the
account of DTC. We have confirmed with DTC that the outstanding notes may be
tendered using the Automated Tender Offer Program ("ATOP") instituted by DTC.
The exchange agent will establish an account with DTC for purposes of the
exchange offer promptly after the commencement of the exchange offer and DTC
participants may electronically transmit their acceptance of the exchange offer
by causing DTC to transfer their outstanding notes to the exchange agent using
the ATOP procedures. In connection with the transfer, DTC will send an "agent's
message" to the exchange agent. The agent's message will state that DTC has
received instructions from the participant to tender outstanding notes and that
the participant agrees to be bound by the terms of the letter of transmittal.

   By using the ATOP procedures to exchange outstanding notes, you will not be
required to deliver a letter of transmittal to the exchange agent. However, you
will be bound by its terms just as if you had signed it.

   There is no procedure for guaranteed late delivery of the notes.

  Determinations Under the Exchange Offer

   We will determine in our sole discretion all questions as to the validity,
form, eligibility, time of receipt, acceptance of tendered outstanding notes
and withdrawal of tendered outstanding notes. Our determination will be final
and binding. We reserve the absolute right to reject any outstanding notes not
properly tendered or any outstanding notes our acceptance of which would, in
the opinion of our counsel, be unlawful. We also reserve the right to waive any
defect, irregularities or conditions of tender as to particular outstanding
notes. Our interpretation of the terms and conditions of the exchange offer,
including the instructions in the letter of transmittal, will be final and
binding on all parties. Unless waived, all defects or irregularities in
connection with tenders of outstanding notes must be cured within such time as
we shall determine. Although we intend to notify holders of defects or
irregularities with respect to tenders of outstanding notes, neither we, the
exchange agent nor any other person will incur any liability for failure to
give such notification. Tenders of outstanding notes

                                      19

<PAGE>

will not be deemed made until such defects or irregularities have been cured or
waived. Any outstanding notes received by the exchange agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned to the tendering holder as soon as practicable
following the expiration date.

  When We Will Issue New Notes

   In all cases, we will issue new notes for outstanding notes that we have
accepted for exchange under the exchange offer only after the exchange agent
receives, prior to 5:00 p.m., New York City time, on the expiration date,

  .   a book-entry confirmation of such outstanding notes into the exchange
      agent's account at DTC; and

  .   a properly transmitted agent's message.

  Return of Outstanding Notes Not Accepted or Exchanged

   If we do not accept any tendered outstanding notes for exchange or if
outstanding notes are submitted for a greater principal amount than the holder
desires to exchange, the unaccepted or non-exchanged outstanding notes will be
returned without expense to their tendering holder. Such non-exchanged
outstanding notes will be credited to an account maintained with DTC. These
actions will occur as promptly as practicable after the expiration or
termination of the exchange offer.

  Your Representations to Us

   By agreeing to be bound by the letter of transmittal, you will represent to
us that, among other things:

  .   any new notes that you receive will be acquired in the ordinary course of
      your business;

  .   you have no arrangement or understanding with any person or entity to
      participate in the distribution of the new notes;

  .   you are not engaged in and do not intend to engage in the distribution of
      the new notes;

  .   if you are a broker-dealer that will receive new notes for your own
      account in exchange for outstanding notes, you acquired those notes as a
      result of market-making activities or other trading activities and you
      will deliver a prospectus, as required by law, in connection with any
      resale of such new notes; and

  .   you are not our "affiliate," as defined in Rule 405 of the Securities Act.

Withdrawal of Tenders

   Except as otherwise provided in this prospectus, you may withdraw your
tender at any time prior to 5:00 p.m. New York City time on the expiration
date. For a withdrawal to be effective you must comply with the appropriate
procedures of DTC's ATOP system. Any notice of withdrawal must specify the name
and number of the account at DTC to be credited with withdrawn outstanding
notes and otherwise comply with the procedures of DTC.

   We will determine all questions as to the validity, form, eligibility and
time of receipt of notice of withdrawal. Our determination shall be final and
binding on all parties. We will deem any outstanding notes so withdrawn not to
have been validly tendered for exchange for purposes of the exchange offer.

   Any outstanding notes that have been tendered for exchange but that are not
exchanged for any reason will be credited to an account maintained with DTC for
the outstanding notes. This return or crediting will take place as soon as
practicable after withdrawal, rejection of tender or termination of the
exchange offer. You may retender properly withdrawn outstanding notes by
following the procedures described under "--Procedures for Tendering" above at
any time on or prior to the expiration date.

                                      20

<PAGE>

Fees and Expenses

   We will bear the expenses of soliciting tenders. The principal solicitation
is being made by mail; however, we may make additional solicitation by
telegraph, telephone or in person by our officers and regular employees and
those of our affiliates.

   We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker-dealers or others soliciting
acceptances of the exchange offer. We will, however, pay the exchange agent
reasonable and customary fees for its services and reimburse it for its related
reasonable out-of-pocket expenses.

   We will pay the cash expenses to be incurred in connection with the exchange
offer. They include:

  .   SEC registration fees;

  .   fees and expenses of the exchange agent and trustee;

  .   accounting and legal fees and printing costs; and

  .   related fees and expenses.

Transfer Taxes

   We will pay all transfer taxes, if any, applicable to the exchange of
outstanding notes under the exchange offer. The tendering holder, however, will
be required to pay any transfer taxes, whether imposed on the registered holder
or any other person, if a transfer tax is imposed for any reason other than the
exchange of outstanding notes under the exchange offer.

Consequences of Failure to Exchange

   If you do not exchange new notes for your outstanding notes under the
exchange offer, you will remain subject to the existing restrictions on
transfer of the outstanding notes. In general, you may not offer or sell the
outstanding notes unless they are registered under the Securities Act, or if
the offer or sale is exempt from the registration under the Securities Act and
applicable state securities laws. Except as required by the registration rights
agreement, we do not intend to register resales of the outstanding notes under
the Securities Act.

Accounting Treatment

   We will record the new notes in our accounting records at the same carrying
value as the outstanding notes. This carrying value is the aggregate principal
amount of the outstanding notes less any bond discount, as reflected in our
accounting records on the date of exchange. Accordingly, we will not recognize
any gain or loss for accounting purposes in connection with the exchange offer.

Other

   Participation in the exchange offer is voluntary, and you should carefully
consider whether to accept. You are urged to consult your financial and tax
advisors in making your own decision on what action to take.

   We may in the future seek to acquire untendered outstanding notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. We have no present plans to acquire any outstanding notes that
are not tendered in the exchange offer or to file a registration statement to
permit resales of any untendered outstanding notes.

                                      21

<PAGE>

                      RATIOS OF EARNINGS TO FIXED CHARGES

   For purposes of determining the ratio of earnings to fixed charges, earnings
are defined as net income (loss) before income taxes, extraordinary items,
amortization of capitalized interest and fixed charges, less capitalized
interest. Fixed charges consist of interest (whether expensed or capitalized),
and amortization of debt expenses and discount or premium relating to any
indebtedness.

<TABLE>
<CAPTION>
                                             Year Ended December 31,
                                             ------------------------
                                             1998 1999 2000 2001 2002
                                             ---- ---- ---- ---- ----
          <S>                                <C>  <C>  <C>  <C>  <C>
          Ratio of earnings to fixed charges  (a) 1.4x 3.1x 5.1x 1.5x
</TABLE>
--------
(a) Earnings for such year were insufficient to cover fixed charges by
    approximately $915 million.

                                      22

<PAGE>

                                USE OF PROCEEDS

   The exchange offer is intended to satisfy our obligations under the
registration rights agreement. We will not receive any cash proceeds from the
issuance of the new notes in the exchange offer. In consideration for issuing
the new notes as contemplated by this prospectus, we will receive outstanding
notes in a like principal amount. The form and terms of the new notes are
identical in all respects to the form and terms of the outstanding notes,
except the new notes do not include certain transfer restrictions. Outstanding
notes surrendered in exchange for the new notes will be retired and cancelled
and will not be reissued. Accordingly, the issuance of the new notes will not
result in any change in our outstanding indebtedness.

                                      23

<PAGE>

                         DESCRIPTION OF THE NEW NOTES

   The new notes will be issued, and the outstanding notes were issued,
pursuant to an indenture dated as of March 5, 2003 (the "Indenture") among the
Company, as issuer, the Subsidiary Guarantors, as guarantors, and The Bank of
New York, as trustee (the "Trustee"). The terms of the new notes include those
stated in the Indenture and those made part of the Indenture by the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The definitions
of certain capitalized terms used in the following summary are set forth below
under "--Certain Definitions." References to the "Notes" in this section of the
prospectus include both the outstanding notes and the new notes.

   The following description is only a summary of the material provisions of
the Indenture. It does not restate that agreement in its entirety. The Company
urges Holders to read the Indenture because it, and not this description,
defines the rights of Holders of these notes. The Company has filed the
Indenture as an exhibit to the registration statement which includes this
prospectus.

   If the exchange offer contemplated by this prospectus (the "Exchange Offer")
is consummated, Holders of outstanding notes who do not exchange those notes
for new notes in the Exchange Offer will vote together with Holders of new
notes for all relevant purposes under the Indenture. In that regard, the
Indenture requires that certain actions by the Holders thereunder (including
acceleration following an Event of Default) must be taken, and certain rights
must be exercised, by specified minimum percentages of the aggregate principal
amount of the outstanding securities issued under the Indenture. In determining
whether Holders of the requisite percentage in principal amount have given any
notice, consent or waiver or taken any other action permitted under the
Indenture, any outstanding notes that remain outstanding after the Exchange
Offer will be aggregated with the new notes, and the Holders of such
outstanding notes and the new notes will vote together as a single series for
all such purposes. Accordingly, all references herein to specified percentages
in aggregate principal amount of the notes outstanding shall be deemed to mean,
at any time after the Exchange Offer is consummated, such percentages in
aggregate principal amount of the outstanding notes and the new notes then
outstanding.

Brief Description of the Notes

   The Notes:

  .   are unsecured senior indebtedness of the Company;

  .   are unlimited in aggregate principal amount, of which $300,000,000 are
      outstanding;

  .   are senior in right of payment to all future Subordinated Indebtedness of
      the Company; and

  .   rank equally in right of payment with all existing and future Senior
      Indebtedness.

   The new notes will be issued, and the outstanding notes were issued, only in
registered form, without coupons, in denominations of $1,000 and integral
multiples thereof.

   Any outstanding notes that remain outstanding after the completion of the
Exchange Offer, together with the new notes issued in connection with the
Exchange Offer and any other notes issued under the indenture then outstanding,
will be treated as a single class of securities under the Indenture.

   The Company may issue the notes from time to time with an unlimited maximum
aggregate principal amount, of which $300 million were issued on March 5, 2003.
Any notes issued in the future ("Add On Notes") will be subject to the debt
incurrence covenant described in the first paragraph of "--Certain
Covenants--Limitations on Incurrence of Additional Indebtedness." Any Add On
Notes that are actually issued will be treated as issued and outstanding Notes
(as the same class as the new notes) for all purposes of the Indenture and this
"Description of the New Notes," unless the context indicates otherwise.

                                      24

<PAGE>

   Each Note will mature on September 15, 2013 and will bear interest at the
rate of interest per annum indicated on the cover page of this prospectus.

   Interest on the new notes will accrue from March 5, 2003, and will be
payable semiannually in arrears on March 15 and September 15 of each year,
commencing September 15, 2003. We will make each interest payment to the
holders of record of the Notes at the close of business on the March 1 or
September 1 preceding such interest payment date. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Principal, premium, if
any, and interest will be payable at the offices of the Trustee and the Paying
Agent, provided that, at the option of the Company, payment of interest on
Notes not in global form may be made by check mailed to the address of the
Person entitled thereto as it appears in the register of the Notes maintained
by the Registrar. Initially, the Trustee will also act as Paying Agent and
Registrar for the Notes.

Guarantees

   All the existing subsidiaries of the Company, other than Chesapeake Energy
Marketing, Inc., will fully and unconditionally guarantee, on a joint and
several basis, the Company's obligations to pay principal of, premium, if any,
and interest on the Notes. The Indenture provides that each Person that becomes
a Restricted Subsidiary after the Issue Date will guarantee the payment of the
Notes.

   The obligations of each Subsidiary Guarantor under its Guarantee will be
limited as necessary to prevent that Guarantee from constituting a fraudulent
conveyance or fraudulent transfer under federal, state or foreign law. Each
Subsidiary Guarantor that makes a payment or distribution under a Guarantee
shall be entitled to a contribution from each other Subsidiary Guarantor in a
pro rata amount based on the respective net assets of each Subsidiary Guarantor
at the time of such payment determined in accordance with GAAP.

   If a Guarantee were rendered voidable, it could be subordinated by a court
to all other indebtedness (including guarantees and other contingent
liabilities) of the applicable Subsidiary Guarantor, and, depending on the
amount of such indebtedness, a Subsidiary Guarantor's liability on its
Guarantee could be reduced to zero. Please read "Risk Factors--Risks Related to
The Exchange Offer and the New Notes--A guarantee could be voided if the
guarantor fraudulently transferred the guarantee at the time it incurred the
indebtedness, which could result in the noteholders being able to rely on only
Chesapeake to satisfy claims."

   Subject to the next succeeding paragraph, no Subsidiary Guarantor may
consolidate or merge with or into (whether or not such Subsidiary Guarantor is
the surviving Person) another Person unless:

      (1)  the Person formed by or surviving any such consolidation or merger
   (if other than such Subsidiary Guarantor) assumes all the obligations of
   such Subsidiary Guarantor under the Indenture and the Notes pursuant to a
   supplemental indenture, in a form reasonably satisfactory to the Trustee,

      (2)  immediately after such transaction, no Default or Event of Default
   exists,

      (3)  such Subsidiary Guarantor or the Person formed by or surviving any
   such consolidation or merger will have Consolidated Tangible Net Worth
   immediately after the transaction equal to or greater than the Consolidated
   Tangible Net Worth of such Subsidiary Guarantor immediately preceding the
   transaction, and

      (4)  the Company will, at the time of such transaction after giving pro
   forma effect thereto as if such transaction had occurred at the beginning of
   the Reference Period, be permitted to incur at least $1.00 of additional
   Indebtedness (other than Permitted Indebtedness) pursuant to the
   "--Limitation on Incurrence of Additional Indebtedness" covenant.

The preceding does not prohibit a merger between Subsidiary Guarantors or a
merger between the Company and a Subsidiary Guarantor.

   In the event of a sale or other disposition of all or substantially all of
the assets of any Subsidiary Guarantor, or a sale or other disposition of all
the Capital Stock of such Subsidiary Guarantor, in any case whether by way of

                                      25

<PAGE>

merger, consolidation or otherwise, or a Subsidiary Guarantor otherwise ceases
to be a Subsidiary Guarantor, then the Person acquiring the assets (in the
event of a sale or other disposition, by way of such a merger, consolidation or
otherwise, of all or substantially all of the assets of such Subsidiary
Guarantor) or such Subsidiary Guarantor (in any other event) will be released
and relieved of any obligations under its Guarantee. Additionally, upon the
designation by the Board of Directors of a Subsidiary Guarantor as an
Unrestricted Subsidiary in accordance with the provisions described in the
definition of "Unrestricted Subsidiary" below, the Subsidiary Guarantor will be
deemed released and relieved of any obligations under its Guarantee.

Ranking

   Senior Indebtedness versus Notes.  The Indebtedness evidenced by the Notes
and the Guarantees is unsecured and ranks pari passu in right of payment to all
Senior Indebtedness of the Company and the Subsidiary Guarantors, as the case
may be.

   As of March 31, 2003, Senior Indebtedness of the Company and the Subsidiary
Guarantors was approximately $1.98 billion, none of which was secured
indebtedness.

   The Notes are unsecured obligations of the Company. Secured debt and other
secured obligations of the Company and the Subsidiary Guarantors (including
obligations with respect to our current bank credit facility) is effectively
senior to the Notes to the extent of the value of the assets securing such debt
or other obligations.

   Liabilities of Subsidiaries versus Notes.  A substantial portion of the
Company's operations is conducted through its subsidiaries. Claims of creditors
of such subsidiaries that are not Subsidiary Guarantors, including trade
creditors and creditors holding indebtedness or guarantees issued by such
subsidiaries, and claims of preferred stockholders of such subsidiaries have
priority with respect to the assets and earnings of such subsidiaries over the
claims of the Company's creditors, including holders of the Notes. Accordingly,
the Notes are effectively subordinated to creditors (including trade creditors)
and preferred stockholders, if any, of the Company's subsidiaries that are not
Subsidiary Guarantors. All of the Company's subsidiaries, other than Chesapeake
Energy Marketing, Inc., will be Subsidiary Guarantors. As of the date of this
prospectus, the non-guarantor subsidiary has no outstanding indebtedness.

   Although the Indenture limits the incurrence of Indebtedness (including some
types of preferred stock) of the Restricted Subsidiaries, such limitations are
subject to a number of significant qualifications. In addition, the Indenture
does not impose any limitations on the incurrence by the Restricted
Subsidiaries of liabilities that are not considered Indebtedness under the
Indenture. Please read "--Certain Covenants--Limitation on Incurrence of
Additional Indebtedness." Moreover, the Indenture does not impose any
limitation on the incurrence by any Unrestricted Subsidiary of Indebtedness
(including preferred stock).

Optional Redemption

   At any time on or after September 15, 2008, the Company may, at its option,
redeem all or any portion of the Notes at the applicable redemption prices
(expressed as percentages of the principal amount of the Notes) described
below, plus, in each case, accrued but unpaid interest thereon to the
applicable redemption date if the Notes are redeemed during the twelve-month
period beginning on September 15 of the years set forth below:

<TABLE>
<CAPTION>
                                             Redemption
                         Year                  Price
                         ----                ----------
                         <S>                 <C>
                         2008...............  103.750%
                         2009...............  102.500%
                         2010...............  101.250%
                         2011 and thereafter  100.000%
</TABLE>

                                      26

<PAGE>

   Notwithstanding the foregoing, at any time prior to September 15, 2008, the
Company may, at its option, redeem all or any portion of the Notes at the
Make-Whole Price plus accrued and unpaid interest to the date of redemption. In
addition, in the event the Company consummates one or more Equity Offerings on
or prior to September 15, 2006, the Company, at its option, may redeem up to
35% of the aggregate principal amount of the Notes (which includes Add On
Notes, if any) issued under the Indenture with all or a portion of the
aggregate net proceeds received by the Company from such Equity Offerings at a
redemption price of 107.50%, plus accrued and unpaid interest thereon to the
redemption date; provided, however, that

  .   the date of such redemption occurs within the 90-day period after the
      Equity Offering in respect of which such redemption is made and

  .   following each such redemption, at least 65% of the aggregate principal
      amount of the Notes (which includes Add On Notes, if any) issued under
      the Indenture remain outstanding.

Change of Control

   The Indenture provides that, following the occurrence of any Change of
Control, the Company must offer to purchase all outstanding Notes at a purchase
price equal to 101% of the aggregate principal amount of the Notes, plus
accrued and unpaid interest to the date of purchase.

   Within 15 days after any Change of Control, the Company will mail or cause
to be mailed to all Holders on the date of the Change of Control a Notice (the
"Change of Control Notice") of the occurrence of such Change of Control and of
the Holders' rights arising as a result thereof. The Change of Control Notice
shall state, among other things:

      (1)  that the change of control offer is being made pursuant to this
   covenant;

      (2)  the purchase price and the change of control payment date;

      (3)  that any Note not tendered will continue to accrue interest;

      (4)  that any Note accepted for payment pursuant to the change of control
   offer shall cease to accrue interest on the change of control payment date;
   and

      (5)  the instructions, consistent with the covenant described hereunder,
   that a Holder must follow in order to have such Holder's Notes purchased.

   The change of control offer will be deemed to have commenced upon mailing of
a notice pursuant to the Indenture and will terminate 20 business days after
its commencement, unless a longer offering period is required by law. Promptly
after the termination of the change of control offer, the Company will purchase
and mail or deliver payment for all Notes tendered in response to the change of
control offer.

   On the change of control payment date, the Company will, to the extent
lawful:

  .   accept for payment Notes or portions thereof tendered pursuant to the
      change of control offer,

  .   deposit with the paying agent an amount equal to the change of control
      payment in respect of all Notes or portions thereof so tendered and

  .   deliver to the Trustee the Notes so accepted together with an officers'
      certificate stating the Notes or portions thereof tendered to the
      Company. The paying agent will promptly mail or deliver to each Holder of
      Notes so accepted payment in an amount equal to the purchase price for
      such Notes, and the Trustee will promptly authenticate and mail or
      deliver to each Holder a new Note equal in principal amount to any
      unpurchased portion of the Notes surrendered, if any, provided that each
      such new Note will be in a principal amount of $1,000 or an integral
      multiple thereof.

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<PAGE>

   The Company will comply with Section 14 of the Exchange Act and the
provisions of Regulation 14E and any other tender offer rules under the
Exchange Act and any other federal and state securities laws, rules and
regulations which may then be applicable to any change of control offer.

   The Change of Control purchase feature of the Notes may in certain
circumstances make more difficult or discourage a sale or takeover of the
Company. The change of control purchase feature is a result of negotiations
between the Company and the initial purchasers. The Company has no present
intention to engage in a transaction involving a Change of Control, although it
is possible that it could decide to do so in the future. Subject to the
limitations discussed below, the Company could, in the future, enter into
certain transactions, including acquisitions, refinancings or other
recapitalizations, that would not constitute a Change of Control under the
Indenture, but that could increase the amount of indebtedness outstanding at
such time or otherwise affect the Company's capital structure or credit
ratings. Restrictions on the Company's ability to incur additional Indebtedness
are contained in the covenants described under "--Certain Covenants--Limitation
on Incurrence of Additional Indebtedness," "--Limitation on Liens" and
"--Limitation on Sale/Leaseback Transactions." Under the Indenture, such
restrictions can only be waived with the consent of the Holders of a majority
in principal amount of the Notes then outstanding. Except for the limitations
contained in such covenants, however, the Indenture does not contain any
covenants or provisions that may afford Holders of the Notes protection in the
event of a highly leveraged transaction.

   Future indebtedness that the Company may incur may contain prohibitions on
the occurrence of certain events that would constitute a Change of Control or
require the repurchase of such indebtedness upon a Change of Control. Moreover,
the exercise by the Holders of their right to require the Company to repurchase
the Notes could cause a default under such indebtedness, even if the Change of
Control itself does not, due to the financial effect of such repurchase on the
Company. Finally, the Company's ability to pay cash to the Holders of Notes
following the occurrence of a Change of Control may be limited by the Company's
then existing financial resources. There can be no assurance that sufficient
funds will be available when necessary to make any required repurchases.

   The provisions under the Indenture relative to the Company's obligation to
make an offer to repurchase the Notes as a result of a Change of Control may be
waived or modified with the written consent of the Holders of a majority in
principal amount of the Notes.

Certain Covenants

   The following restrictive covenants are applicable to the Company and its
Restricted Subsidiaries.

   Limitation on Incurrence of Additional Indebtedness.  The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, issue, incur, assume, guarantee, become liable, contingently or
otherwise, with respect to or otherwise become responsible for the payment of
(collectively, "incur") any Indebtedness; provided, however, that if no Default
or Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness, the Company or its
Restricted Subsidiaries may incur Indebtedness if, on a pro forma basis, after
giving effect to such incurrence and the application of the proceeds therefrom,
either of the following tests shall have been satisfied: (1) the Adjusted
Consolidated EBITDA Coverage Ratio would have been at least 2.25 to 1.0 or (2)
Adjusted Consolidated Net Tangible Assets would have been greater than 200% of
Indebtedness of the Company and its Restricted Subsidiaries.

   Notwithstanding the preceding, if no Default or Event of Default shall have
occurred and be continuing at the time or as a consequence of the incurrence of
such Indebtedness, the Company and its Restricted Subsidiaries may incur
Permitted Indebtedness. For purposes of determining compliance with this
covenant:

      (1)  in the event that an item of proposed Indebtedness meets the
   criteria of more than one of the categories of Permitted Indebtedness as of
   the date of incurrence thereof or is entitled to be incurred pursuant to the
   first paragraph of this covenant as of the date of incurrence thereof, the
   Company shall, in its

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<PAGE>

   sole discretion, classify (or later classify in whole or in part, in its
   sole discretion) such item of Indebtedness in any manner that complies with
   this covenant; and

      (2)  for purposes of determining compliance with any dollar-denominated
   restriction on the incurrence of Indebtedness denominated in a foreign
   currency, the dollar-equivalent principal amount of such Indebtedness
   incurred pursuant thereto shall be calculated based on the relevant currency.

Accrual of interest or dividends, the accretion of accreted value or
liquidation preference and the payment of interest or dividends in the form of
additional Indebtedness will not be deemed to be an incurrence of Indebtedness
for purposes of this covenant.

   Any Indebtedness of a Person existing at the time such Person becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be incurred by such Restricted Subsidiary at the
time it becomes a Restricted Subsidiary.

   Limitation on Restricted Payments.  The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, make any
Restricted Payment, unless:

      (1)  no Default or Event of Default shall have occurred and be continuing
   at the time of or immediately after giving effect to such Restricted Payment;

      (2)  at the time of and immediately after giving effect to such
   Restricted Payment, the Company would be able to incur at least $1.00 of
   additional Indebtedness (other than Permitted Indebtedness) pursuant to the
   first paragraph of the covenant captioned "--Limitation on Incurrence of
   Additional Indebtedness"; and

      (3)  immediately after giving effect to such Restricted Payment, the
   aggregate of all Restricted Payments declared or made after the Reference
   Date does not exceed the sum of

          (A)  50% of the Consolidated Net Income of the Company and its
       Restricted Subsidiaries (or in the event such Consolidated Net Income
       shall be a deficit, minus 100% of such deficit) during the period
       (treated as one accounting period) subsequent to the Reference Date and
       ending on the last day of the fiscal quarter immediately preceding the
       date of such Restricted Payment;

          (B)  the aggregate Net Cash Proceeds, and the fair market value of
       property other than cash (as determined in good faith by the Company's
       Board of Directors and evidenced by a resolution of such Board),
       received by the Company during such period from any Person other than a
       Subsidiary of the Company as a result of the issuance or sale of Capital
       Stock of the Company (other than any Disqualified Stock and other than
       Preferred Stock issued in the Preferred Stock Offering), other than in
       connection with the conversion of Indebtedness or Disqualified Stock;

          (C)  the aggregate Net Cash Proceeds, and the fair market value of
       property other than cash (as determined in good faith by the Company's
       Board of Directors and evidenced by a resolution of such Board),
       received by the Company during such period from any Person other than a
       Subsidiary of the Company as a result of the issuance or sale of any
       Indebtedness or Disqualified Stock to the extent that at the time the
       determination is made such Indebtedness or Disqualified Stock, as the
       case may be, has been converted into or exchanged for Capital Stock of
       the Company (other than Disqualified Stock); and

          (D)  (i) in case any Unrestricted Subsidiary has been redesignated a
       Restricted Subsidiary, an amount equal to the lesser of (x) the book
       value (determined in accordance with GAAP) at the date of such
       redesignation of the aggregate Investments made by the Company and its
       Restricted Subsidiaries in such Unrestricted Subsidiary and (y) the fair
       market value of such Investments in such Unrestricted Subsidiary at the
       time of such redesignation (determined in good faith by the Company's
       Board of Directors, including a majority of the Company's Disinterested
       Directors, whose determination shall be conclusive and evidenced by a
       resolution of such Board); or (ii) in case any Restricted Subsidiary has

                                      29

<PAGE>

       been redesignated an Unrestricted Subsidiary, minus the greater of (x)
       the book value (determined in accordance with GAAP) at the date of
       redesignation of the aggregate Investments made by the Company and its
       Restricted Subsidiaries in such Restricted Subsidiary and (y) the fair
       market value of such Investments in such Restricted Subsidiary at the
       time of such redesignation (determined in good faith by the Company's
       Board of Directors, including a majority of the Company's Disinterested
       Directors, whose determination shall be conclusive and evidenced by a
       resolution of such Board).

   Notwithstanding the preceding, the above limitations will not prevent:

      (1)  the payment of any dividend within 60 days after the date of
   declaration thereof, if at such date of declaration such payment complied
   with the provisions hereof;

      (2)  the purchase, redemption, acquisition or retirement of any shares of
   Capital Stock of the Company in exchange for, or out of the net proceeds of
   the substantially concurrent sale (other than to a Restricted Subsidiary of
   the Company) of, other shares of Capital Stock (other than Disqualified
   Stock) of the Company;

      (3)  any dividend or other distribution payable from a Restricted
   Subsidiary to the Company or any other Restricted Subsidiary;

      (4)  regular quarterly dividends on the 6.75% Cumulative Convertible
   Preferred Stock or the 6.00% Cumulative Convertible Preferred Stock of the
   Company outstanding on the Issue Date, provided that no Default or Event of
   Default shall have occurred and be continuing at the time of or immediately
   after giving effect to any such Restricted Payment; and

      (5)  other Restricted Payments not in excess of $25 million in the
   aggregate since the Issue Date, provided that no Default or Event of Default
   shall have occurred and be continuing at the time of or immediately after
   giving effect to any such Restricted Payment.

   Any Restricted Payment described in the preceding clause (3) shall be
excludable in the calculation of the amount of Restricted Payments, and any
Restricted Payment described in any other clause shall be included in the
calculation.

   Limitation on Sale of Assets.  The Company will not, and will not permit any
Restricted Subsidiary to, make any Asset Sale unless:

      (1)  the Company (or its Restricted Subsidiaries, as the case may be)
   receives consideration at the time of such sale or other disposition at
   least equal to the fair market value thereof (as determined in good faith by
   the Company's Board of Directors and evidenced by a resolution of such
   Board, including a majority of the Company's Disinterested Directors, in the
   case of any Asset Sales or series of related Asset Sales having a fair
   market value of $20 million or greater);

      (2)  (A) the consideration consists of cash, cash equivalents, Permitted
   Financial Investments or property, equipment, leasehold interests or other
   assets used in the Oil and Gas Business ("Permitted Consideration") or (B)
   the portion of the consideration that does not constitute Permitted
   Consideration, together with all other consideration received for Asset
   Sales since the Issue Date that does not constitute Permitted Consideration,
   has a fair market value of no more than 10% of ACNTA; and

      (3)  the Net Available Proceeds received by the Company (or its
   Restricted Subsidiaries, as the case may be) from such Asset Sale are
   applied in accordance with the following two paragraphs.

   The Company may apply such Net Available Proceeds, within 365 days following
the receipt of Net Available Proceeds from any Asset Sale, to:

      (1)  the repayment of Indebtedness of the Company under Credit Facilities
   or other Senior Indebtedness, including any mandatory redemption or
   repurchase or optional redemption of the Existing Notes or the Notes;

                                      30

<PAGE>

      (2)  make an Investment in assets used in the Oil and Gas Business; or

      (3)  develop by drilling the Company's oil and gas reserves.

   If, upon completion of the 365-day period, any portion of the Net Available
Proceeds of any Asset Sale shall not have been applied by the Company as
described in clauses (1), (2) or (3) in the immediately preceding paragraph and
such remaining Net Available Proceeds, together with any remaining net cash
proceeds from any prior Asset Sale (such aggregate constituting "Excess
Proceeds"), exceed $15 million, then the Company will be obligated to make an
offer (the "Net Proceeds Offer") to purchase the Notes and any other Senior
Indebtedness in respect of which such an offer to purchase is also required to
be made concurrently with the Net Proceeds Offer having an aggregate principal
amount equal to the Excess Proceeds (such purchase to be made on a pro rata
basis if the amount available for such repurchase is less than the principal
amount of the Notes and other such Senior Indebtedness tendered in such Net
Proceeds Offer) at a purchase price of 100% of the principal amount thereof
plus accrued interest to the date of repurchase. Upon the completion of the Net
Proceeds Offer, the amount of Excess Proceeds will be reset to zero.

   Any Net Proceeds Offer will be conducted in substantially the same manner as
a change of control offer. The Company will comply with Section 14 of the
Exchange Act and the provisions of Regulation 14E and any other tender offer
rules under the Exchange Act and any other federal and state securities laws,
rules and regulations which may then be applicable to any Net Proceeds Offer.

   During the period between any Asset Sale and the application of the Net
Available Proceeds therefrom in accordance with this covenant, all Net
Available Proceeds shall be maintained in a segregated account and shall be
invested in Permitted Financial Investments.

   Notwithstanding the preceding, the Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, make any Asset Sale of any of
the Capital Stock of a Restricted Subsidiary except pursuant to an Asset Sale
of all of the Capital Stock of such Restricted Subsidiary.

   Limitation on Liens.  The Company will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any Liens
(other than Permitted Liens) upon any of their respective properties securing
any Indebtedness of the Company or any Restricted Subsidiary, unless the Notes
are equally and ratably secured; provided that if such Indebtedness is
expressly subordinated to the Notes or the Guarantees, the Lien securing such
Indebtedness will be subordinated and junior to the Lien securing the Notes or
the Guarantees.

   Limitation on Sale/Leaseback Transactions.  The Company will not, and will
not permit any Restricted Subsidiary to, enter into any Sale/Leaseback
Transaction with any Person (other than the Company or any other Restricted
Subsidiary) unless:

      (1)  the Company or such Restricted Subsidiary would be entitled to incur
   Indebtedness, in a principal amount equal to the Attributable Indebtedness
   with respect to such Sale/Leaseback Transaction in accordance with the
   covenant captioned "-- Limitation on Incurrence of Additional Indebtedness;"
   or

      (2)  the Company or such Restricted Subsidiary receives proceeds from
   such Sale/Leaseback Transactions at least equal to the fair market value
   thereof (as determined in good faith by the Company's Board of Directors,
   whose determination in good faith, evidenced by a resolution of such Board,
   shall be conclusive) and such proceeds are applied in the same manner and to
   the same extent as Net Available Proceeds and Excess Proceeds from an Asset
   Sale.

   Limitations on Mergers and Consolidations.  The Company will not consolidate
or merge with or into any Person, or sell, convey, lease or otherwise dispose
of all or substantially all of its assets to any Person, unless:

      (1)  the Person formed by or surviving such consolidation or merger (if
   other than the Company), or to which such sale, lease, conveyance or other
   disposition or assignment shall be made (collectively, the

                                      31

<PAGE>

   "Successor"), is a corporation organized and existing under the laws of the
   United States or any state thereof or the District of Columbia, or Canada or
   any province thereof, and the Successor assumes by supplemental indenture in
   a form satisfactory to the Trustee all of the obligations of the Company
   under the Indenture and under the Notes;

      (2)  immediately before and after giving effect to such transaction, no
   Event of Default shall have occurred and be continuing;

      (3)  immediately after giving effect to such transaction on a pro forma
   basis, the Consolidated Tangible Net Worth of the Company (or the Successor)
   is equal to or greater than the Consolidated Tangible Net Worth of the
   Company immediately before such transaction; and

      (4)  immediately after giving effect to such transaction on a pro forma
   basis, the Company (or the Successor) would be able to incur $1.00 of
   additional Indebtedness (other than Permitted Indebtedness) pursuant to the
   first paragraph of the covenant captioned "--Limitation on Incurrence of
   Additional Indebtedness."

   Limitation on Payment Restrictions Affecting Subsidiaries.  The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary of the Company to:

      (1)  pay dividends or make any other distributions on its Capital Stock
   to the Company or a Restricted Subsidiary;

      (2)  pay any Indebtedness owed to the Company or a Restricted Subsidiary
   of the Company;

      (3)  make loans or advances to the Company or a Restricted Subsidiary of
   the Company; or

      (4)  transfer any of its properties or assets to the Company or a
   Restricted Subsidiary of the Company (each, a "Payment Restriction");

except for (a) encumbrances or restrictions under Credit Facilities, provided
that any Payment Restrictions thereunder (other than, with respect to (4)
above, customary restrictions in security agreements or other loan documents
thereunder securing or governing Indebtedness of a Restricted Subsidiary) may
be imposed only upon the acceleration of the maturity of the Indebtedness
thereunder; (b) consensual encumbrances or consensual restrictions binding upon
any Person at the time such Person becomes a Restricted Subsidiary of the
Company (unless the agreement creating such consensual encumbrances or
consensual restrictions was entered into in connection with, or in
contemplation of, such entity becoming a Restricted Subsidiary); (c) consensual
encumbrances or consensual restrictions under any agreement that refinances or
replaces any agreement described in clauses (a) and (b) above, provided that
the terms and conditions of any such restrictions are no less favorable to the
Holders of Notes than those under the agreement so refinanced or replaced; and
(d) customary non-assignment provisions in leases, purchase money financings
and any encumbrance or restriction due to applicable law.

   Limitation on Transactions with Affiliates.  The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into any transaction or series of transactions (including, without limitation,
the sale, purchase or lease of any assets or properties or the rendering of any
services) with any Affiliate or beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act) of 10% or more of the Company's common stock
(other than with a Restricted Subsidiary) (an "Affiliate Transaction"), on
terms that are less favorable to the Company or such Restricted Subsidiary, as
the case may be, than would be available in a comparable transaction with an
unrelated Person. In addition, the Company will not, and will not permit any
Restricted Subsidiary of the Company to, enter into an Affiliate Transaction,
or any series of related Affiliate Transactions having a value of:

      (1)  more than $5 million, unless a majority of the Board of Directors of
   the Company (including a majority of the Company's Disinterested Directors)
   determines in good faith, as evidenced by a resolution

                                      32

<PAGE>

   of such Board, that such Affiliate Transaction or series of related
   Affiliate Transactions is fair to the Company; or

      (2)  more than $25 million, unless the Company receives a written opinion
   from a nationally recognized investment banking firm with total assets in
   excess of $1.0 billion that such transaction or series of transactions is
   fair to the Company from a financial point of view.

   SEC Reports.  Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the SEC and provide the Trustee and Holders
with annual reports and such information, documents and other reports specified
in Sections 13 and 15(d) of the Exchange Act.

Certain Definitions

   The following is a summary of certain defined terms used in the Indenture.
Reference is made to the Indenture for the full definition of all such terms
and for the definitions of capitalized terms used in this prospectus and not
defined below.

   "Adjusted Consolidated EBITDA" means the Consolidated Net Income of the
Company and its Restricted Subsidiaries for the Reference Period, (a) increased
(to the extent deducted in determining Consolidated Net Income) by the sum,
without duplication, of:

      (1)  all income and state franchise taxes of the Company and its
   Restricted Subsidiaries paid or accrued according to GAAP for such period
   (other than income taxes attributable to extraordinary, unusual or
   non-recurring gains or losses);

      (2)  all interest expense of the Company and its Restricted Subsidiaries
   paid or accrued in accordance with GAAP for such period (including
   amortization of original issue discount or premium);

      (3)  depreciation and depletion of the Company and its Restricted
   Subsidiaries;

      (4)  amortization of the Company and its Restricted Subsidiaries
   including, without limitation, amortization of capitalized debt issuance
   costs;

      (5)  any loss realized in accordance with GAAP upon the sale or other
   disposition of any property, plant or equipment of the Company or its
   Restricted Subsidiaries (including pursuant to any Sale/Leaseback
   Transaction) which is not sold or otherwise disposed of in the ordinary
   course of business and any loss realized in accordance with GAAP upon the
   sale or other disposition of any Capital Stock of any Person;

      (6)  any loss realized in accordance with GAAP from currency exchange
   transactions not in the ordinary course of business consistent with past
   practice;

      (7)  any loss net of income taxes realized in accordance with GAAP
   attributable to extraordinary items;

      (8)  any charges associated solely with the prepayment of any
   Indebtedness; and

      (9)  any other non-cash charges to the extent deducted from Consolidated
   Net Income

and (b) decreased (to the extent included in determining Consolidated Net
Income) by the sum of

      (1)  the amount of deferred revenues that are amortized during the
   Reference Period and are attributable to reserves that are subject to
   Volumetric Production Payments and

                                      33

<PAGE>

      (2)  amounts recorded in accordance with GAAP as repayments of principal
   and interest pursuant to Dollar-Denominated Production Payments.

   "Adjusted Consolidated EBITDA Coverage Ratio" means, for any Reference
Period, the ratio on a pro forma basis of (a) Adjusted Consolidated EBITDA for
the Reference Period to (b) Adjusted Consolidated Interest Expense for such
Reference Period; provided, that, in calculating Adjusted Consolidated EBITDA
and Adjusted Consolidated Interest Expense

      (1)  acquisitions which occurred during the Reference Period or
   subsequent to the Reference Period and on or prior to the date of the
   transaction giving rise to the need to calculate the Adjusted Consolidated
   EBITDA Coverage Ratio (the "Transaction Date") shall be assumed to have
   occurred on the first day of the Reference Period,

      (2)  the incurrence of any Indebtedness (including the issuance of the
   Notes) or issuance of any Disqualified Stock during the Reference Period or
   subsequent to the Reference Period and on or prior to the Transaction Date
   shall be assumed to have occurred on the first day of such Reference Period,

      (3)  any Indebtedness that had been outstanding during the Reference
   Period that has been repaid on or prior to the Transaction Date shall be
   assumed to have been repaid as of the first day of such Reference Period,

      (4)  the Adjusted Consolidated Interest Expense attributable to interest
   on any Indebtedness or dividends on any Disqualified Stock bearing a
   floating interest (or dividend) rate shall be computed on a pro forma basis
   as if the rate in effect on the Transaction Date were the average rate in
   effect during the entire Reference Period and

      (5)  in determining the amount of Indebtedness pursuant to the covenant
   captioned "Limitation on Incurrence of Additional Indebtedness," the
   incurrence of Indebtedness or issuance of Disqualified Stock giving rise to
   the need to calculate the Adjusted Consolidated EBITDA Coverage Ratio and,
   to the extent the net proceeds from the incurrence or issuance thereof are
   used to retire Indebtedness, the application of the proceeds therefrom shall
   be assumed to have occurred on the first day of the Reference Period.

   "Adjusted Consolidated Interest Expense" means, with respect to the Company
and its Restricted Subsidiaries, for the Reference Period, the aggregate amount
(without duplication) of

      (a)  interest expensed in accordance with GAAP (including, in accordance
   with the following sentence, interest attributable to Capitalized Lease
   Obligations, but excluding interest attributable to Dollar-Denominated
   Production Payments and amortization of deferred debt expense) during such
   period in respect of all Indebtedness of the Company and its Restricted
   Subsidiaries (including (1) amortization of original issue discount or
   premium on any Indebtedness (other than with respect to the Existing Notes
   and the Notes), (2) the interest portion of all deferred payment
   obligations, calculated in accordance with GAAP, and (3) all commissions,
   discounts and other fees and charges owed with respect to bankers'
   acceptance financings and currency and interest rate swap arrangements, in
   each case to the extent attributable to such period), and

      (b)  dividend requirements of the Company and its Restricted Subsidiaries
   with respect to any preferred stock dividends (whether in cash or otherwise
   (except dividends paid solely in shares of Qualified Stock)) paid (other
   than to the Company or any of its Restricted Subsidiaries), declared,
   accrued or accumulated during such period, divided by one minus the
   applicable actual combined federal, state, local and foreign income tax rate
   of the Company and its Subsidiaries (expressed as a decimal), on a
   consolidated basis, for the four quarters immediately preceding the date of
   the transaction giving rise to the need to calculate Consolidated Interest
   Expense,

                                      34

<PAGE>

in each case to the extent attributable to such period and excluding items
eliminated in consolidation. For purposes of this definition, (a) interest on a
Capitalized Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by the Company to be the rate of interest implicit in
such Capitalized Lease Obligation in accordance with GAAP and (b) interest
expense attributable to any Indebtedness represented by the guarantee by the
Company or a Restricted Subsidiary of the Company of an obligation of another
Person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.

   "Adjusted Consolidated Net Tangible Assets" or "ACNTA" means, without
duplication, as of the date of determination, (a) the sum of

      (1)  discounted future net revenue from proved oil and gas reserves of
   the Company and its Restricted Subsidiaries calculated in accordance with
   SEC guidelines before any state or federal income taxes, as estimated by
   independent petroleum engineers in a reserve report prepared as of the end
   of the Company's most recently completed fiscal year, as increased by, as of
   the date of determination, the discounted future net revenue of (A)
   estimated proved oil and gas reserves of the Company and its Restricted
   Subsidiaries attributable to any acquisition consummated since the date of
   such year-end reserve report and (B) estimated proved oil and gas reserves
   of the Company and its Restricted Subsidiaries attributable to extensions,
   discoveries and other additions and upward revisions of estimates of proved
   oil and gas reserves due to exploration, development or exploitation,
   production or other activities conducted or otherwise occurring since the
   date of such year-end reserve report which, in the case of sub-clauses (A)
   and (B), would, in accordance with standard industry practice, result in
   such increases as calculated in accordance with SEC guidelines (utilizing
   the prices utilized in such year-end reserve report), and decreased by, as
   of the date of determination, the discounted future net revenue of (C)
   estimated proved oil and gas reserves of the Company and its Restricted
   Subsidiaries produced or disposed of since the date of such year-end reserve
   report and (D) reductions in the estimated oil and gas reserves of the
   Company and its Restricted Subsidiaries since the date of such year-end
   reserve report attributable to downward revisions of estimates of proved oil
   and gas reserves due to exploration, development or exploitation, production
   or other activities conducted or otherwise occurring since the date of such
   year-end reserve report which, in the case of sub-clauses (C) and (D) would,
   in accordance with standard industry practice, result in such decreases as
   calculated in accordance with SEC guidelines (utilizing the prices utilized
   in such year-end reserve report); provided that, in the case of each of the
   determinations made pursuant to clauses (A) through (D), such increases and
   decreases shall be as estimated by the Company's engineers,

      (2)  the capitalized costs that are attributable to oil and gas
   properties of the Company and its Restricted Subsidiaries to which no proved
   oil and gas reserves are attributable, based on the Company's books and
   records as of a date no earlier than the date of the Company's latest annual
   or quarterly financial statements,

      (3)  the Net Working Capital on a date no earlier than the date of the
   Company's latest annual or quarterly financial statements and

      (4)  the greater of (I) the net book value on a date no earlier than the
   date of the Company's latest annual or quarterly financial statements and
   (II) the appraised value, as estimated by independent appraisers, of other
   tangible assets (including Investments in unconsolidated Subsidiaries) of
   the Company and its Restricted Subsidiaries, as of a date no earlier than
   the date of the Company's latest audited financial statements,

minus (b) the sum of

      (1)  minority interests,

      (2)  any gas balancing liabilities of the Company and its Restricted
   Subsidiaries reflected in the Company's latest annual or quarterly financial
   statements,

      (3)  the discounted future net revenue, calculated in accordance with SEC
   guidelines (utilizing the prices utilized in the Company's year-end reserve
   report), attributable to reserves which are required to be

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<PAGE>

   delivered to third parties to fully satisfy the obligations of the Company
   and its Restricted Subsidiaries with respect to Volumetric Production
   Payments on the schedules specified with respect thereto,

      (4)  the discounted future net revenue, calculated in accordance with SEC
   guidelines, attributable to reserves subject to Dollar-Denominated
   Production Payments which, based on the estimates of production included in
   determining the discounted future net revenue specified in (a)(1) above
   (utilizing the same prices utilized in the Company's year-end reserve
   report), would be necessary to fully satisfy the payment obligations of the
   Company and its Restricted Subsidiaries with respect to Dollar-Denominated
   Production Payments on the schedules specified with respect thereto and

      (5)  the discounted future net revenue, calculated in accordance with SEC
   guidelines (utilizing the same prices utilized in the Company's year-end
   reserve report), attributable to reserves subject to participation
   interests, overriding royalty interests or other interests of third parties,
   pursuant to participation, partnership, vendor financing or other agreements
   then in effect, or which otherwise are required to be delivered to third
   parties.

If the Company changes its method of accounting from the full cost method to
the successful efforts method or a similar method of accounting, ACNTA will
continue to be calculated as if the Company were still using the full cost
method of accounting.

   "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of voting stock, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

   "Asset Sale" means any sale, lease, transfer, exchange or other disposition
(or series of related sales, leases, transfers, exchanges or dispositions)
having a fair market value of $1,000,000 or more of shares of Capital Stock of
a Restricted Subsidiary (other than directors' qualifying shares), or of
property or assets (including the creation of Dollar-Denominated Production
Payments and Volumetric Production Payments, other than Dollar-Denominated
Production Payments and Volumetric Production Payments created or sold in
connection with the financing of, and within 30 days after, the acquisition of
the properties subject thereto) or any interests therein (each referred to for
purposes of this definition as a "disposition") by the Company or any of its
Restricted Subsidiaries, including any disposition by means of a merger,
consolidation or similar transaction, other than

      (a)  by the Company to a Restricted Subsidiary or by a Restricted
   Subsidiary to the Company or another Restricted Subsidiary,

      (b)  a sale of oil, gas or other hydrocarbons or other mineral products
   in the ordinary course of business of the Company's oil and gas production
   operations,

      (c)  any abandonment, farm-in, farm-out, lease and sub-lease of developed
   and/or undeveloped properties made or entered into in the ordinary course of
   business, but excluding (x) any sale of a net profits or overriding royalty
   interest, in each case conveyed from or burdening proved developed or proved
   undeveloped reserves and (y) any sale of hydrocarbons or other mineral
   products as a result of the creation of Dollar-Denominated Production
   Payments or Volumetric Production Payments, other than Dollar-Denominated
   Production Payments and Volumetric Production Payments created or sold in
   connection with the financing of, and within 30 days after, the acquisition
   of the properties subject thereto),

      (d)  the disposition of all or substantially all of the assets of the
   Company in compliance with the covenant captioned "Limitations on Mergers
   and Consolidations,"

      (e)  Sale/Leaseback Transactions in compliance the covenant captioned
   "Limitations on Sale/ Leaseback Transactions,"

                                      36

<PAGE>

      (f)  the provision of services and equipment for the operation and
   development of the Company's oil and gas wells, in the ordinary course of
   the Company's oil and gas service businesses, notwithstanding that such
   transactions may be recorded as asset sales in accordance with full cost
   accounting guidelines, and

      (g)  the issuance by the Company of shares of its Capital Stock.

   "Attributable Indebtedness" means, with respect to any particular lease
under which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the present value of the total net amount
of rent required to be paid by such Person under the lease during the primary
term thereof, without giving effect to any renewals at the option of the
lessee, discounted from the respective due dates thereof to such date at the
rate of interest per annum implicit in the terms of the lease. As used in the
preceding sentence, the "net amount of rent" under any lease for any such
period shall mean the sum of rental and other payments required to be paid with
respect to such period by the lessee thereunder excluding any amounts required
to be paid by such lessee on account of maintenance and repairs, insurance,
taxes, assessments, water rates or similar charges. In the case of any lease
which is terminable by the lessee upon payment of a penalty, such net amount of
rent shall also include the amount of such penalty, but no rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated.

   "Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (a) the product of (x) the
number of years from such date to the date of each successive scheduled
principal payment of such Indebtedness multiplied by (y) the amount of such
principal payment by (b) the sum of all such principal payments.

   "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock or partnership or limited liability company interests and any
and all warrants, options and rights with respect thereto (whether or not
currently exercisable), including each class of common stock and preferred
stock of such Person.

   "Capitalized Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under a lease of property, real or
personal, that is required to be capitalized for financial reporting purposes
in accordance with GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.

   "Change of Control" means the occurrence of any of the following:

      (1)  the sale, lease or transfer, in one or a series of related
   transactions, of all or substantially all of the Company's assets to any
   Person or group (as such term is used in Section 13(d)(3) of the Exchange
   Act), other than to Permitted Holders;

      (2)  the adoption of a plan relating to the liquidation or dissolution of
   the Company;

      (3)  the acquisition, directly or indirectly, by any Person or group (as
   such term is used in Section 13(d)(3) of the Exchange Act), other than
   Permitted Holders, of beneficial ownership (as defined in Rule 13d-3 under
   the Exchange Act, except that such Person shall be deemed to have beneficial
   ownership of all shares that any such Person has the right to acquire,
   whether such right is exercisable immediately or only after passage of time)
   of more than 50% of the aggregate voting power of the Voting Stock of the
   Company; provided, however, that the Permitted Holders beneficially own (as
   defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
   indirectly, in the aggregate a lesser percentage of the total voting power
   of the Voting Stock of the Company than such other Person and do not have
   the right or ability by voting power, contract or otherwise to elect or
   designate for election a majority of the Board of Directors of the Company
   (for the purposes of this definition, such other Person shall be deemed to
   beneficially own any Voting Stock of a specified corporation held by a
   parent corporation, if such other Person is the beneficial owner (as defined
   above), directly or indirectly, of more than 35% of the voting power of the
   Voting Stock of such parent corporation and the Permitted Holders
   beneficially own (as defined in this proviso), directly

                                      37

<PAGE>

   or indirectly, in the aggregate a lesser percentage of the voting power of
   the Voting Stock of such parent corporation and do not have the right or
   ability by voting power, contract or otherwise to elect or designate for
   election a majority of the Board of Directors of such parent corporation); or

      (4)  during any period of two consecutive years, individuals who at the
   beginning of such period constituted the Board of Directors of the Company
   (together with any new directors whose election by such Board of Directors
   or whose nomination for election by the shareholders of the Company was
   approved by a vote of 66 2/3% of the directors of the Company then still in
   office who were either directors at the beginning of such period or whose
   election or nomination for election was previously so approved) cease for
   any reason to constitute a majority of the Board of Directors of the Company
   then in office.

   "Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, however, that there shall not be included in such Consolidated Net
Income:

      (a)  any net income of any Person if such Person is not the Company or a
   Restricted Subsidiary, except that

          (1)  subject to the limitations contained in clause (d) below, the
       Company's equity in the net income of any such Person for such period
       shall be included in such Consolidated Net Income up to the aggregate
       amount of cash or cash equivalents actually distributed by such Person
       during such period to the Company or a Restricted Subsidiary as a
       dividend or other distribution (subject, in the case of a dividend or
       other distribution to a Restricted Subsidiary, to the limitations
       contained in clause (c) below) and

          (2)  the Company's equity in a net loss of any such Person (other
       than an Unrestricted Subsidiary) for such period shall be included in
       determining such Consolidated Net Income;


      (b)  any net income (or loss) of any Person acquired by the Company or a
   Subsidiary in a pooling of interests transaction for any period prior to the
   date of such acquisition;

      (c)  the net income of any Restricted Subsidiary to the extent that the
   payment of dividends or the making of distributions by such Restricted
   Subsidiary, directly or indirectly, to the Company, is prohibited;

      (d)  any gain (but not loss) realized upon the sale or other disposition
   of any property, plant or equipment of the Company or any Restricted
   Subsidiary (including pursuant to any Sale/Leaseback Transaction) which is
   not sold or otherwise disposed of in the ordinary course of business and any
   gain (but not loss) realized upon the sale or other disposition of any
   Capital Stock of any Person;

      (e)  any gain (but not loss) from currency exchange transactions not in
   the ordinary course of business consistent with past practice;

      (f)  the cumulative effect of a change in accounting principles;

      (g)  to the extent deducted in the calculation of net income, the
   non-cash charges associated with the repayment of Indebtedness with the
   proceeds from the sale of the Notes or any other Senior Indebtedness
   scheduled to mature no earlier than the Indebtedness being repaid and the
   prepayment of any of the Notes or such other Senior Indebtedness;

      (h)  any writedowns of non-current assets; provided, however, that any
   "ceiling limitation" writedowns under SEC guidelines shall be treated as
   capitalized costs, as if such writedowns had not occurred;

      (i)  any gain (but not loss) attributable to extraordinary items; and

      (j)  any unrealized non-cash gains or losses or charges in respect of
   hedge or non-hedge derivatives (including those resulting from the
   application of FAS 133).

                                      38

<PAGE>

   "Consolidated Tangible Net Worth" means, with respect to the Company and its
Restricted Subsidiaries, as at any date of determination, the sum of Capital
Stock (other than Disqualified Stock) and additional paid-in capital plus
retained earnings (or minus accumulated deficit) minus all intangible assets,
including, without limitation, organization costs, patents, trademarks,
copyrights, franchises, research and development costs, and any amount
reflected in treasury stock, of the Company and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP.

   "Credit Facilities" means, one or more debt facilities (including, without
limitation, the Company's existing credit facility) or commercial paper
facilities, in each case with banks or other institutional lenders providing
for revolving credit loans, term loans, receivables financing (including
through the sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.

   "Currency Hedge Obligations" means, at any time as to the Company and its
Restricted Subsidiaries, the obligations of such Person at such time that were
incurred in the ordinary course of business pursuant to any foreign currency
exchange agreement, option or futures contract or other similar agreement or
arrangement designed to protect against or manage such Person's or any of its
Subsidiaries' exposure to fluctuations in foreign currency exchange rates.

   "Disinterested Director" means, with respect to an Affiliate Transaction or
series of related Affiliate Transactions, a member of the Board of Directors of
the Company who has no financial interest, and whose employer has no financial
interest, in such Affiliate Transaction or series of related Affiliate
Transactions.

   "Disqualified Stock" means any Capital Stock of the Company or any
Restricted Subsidiary of the Company which, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable), or
upon the happening of any event or with the passage of time, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the Maturity Date or which is exchangeable or convertible into debt
securities of the Company or any Restricted Subsidiary of the Company, except
to the extent that such exchange or conversion rights cannot be exercised prior
to the Maturity Date.

   "Dollar-Denominated Production Payments" mean production payment obligations
recorded as liabilities in accordance with GAAP, together with all undertakings
and obligations in connection therewith.

   "Equity Offering" means any underwritten public offering of Capital Stock
(other than Disqualified Stock) of the Company pursuant to a registration
statement filed pursuant to the Securities Act of 1933 or any private placement
of Capital Stock (other than Disqualified Stock) of the Company (other than to
any Person who, prior to such private placement, was an Affiliate of the
Company) which offering or placement is consummated after the Issue Date.

   "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC hereunder.

   "Existing Notes" means the Company's outstanding (a) 7.875% Senior Notes due
2004, (b) 8.5% Senior Notes due 2012, (c) 8.125% Senior Notes due 2011, (d)
8.375% Senior Notes due 2008 and (e) 9% Senior Notes due 2012 and (f) 7.75%
Senior Notes due 2015.

   "GAAP" means generally accepted accounting principles as in effect in the
United States of America as of the Issue Date.

   "Guarantee" means, individually and collectively, the guarantees given by
the Subsidiary Guarantors pursuant to Article Ten of the Indenture.

                                      39

<PAGE>

   "Holder" means a Person in whose name a Note is registered on the
Registrar's books.

   "Indebtedness" means, without duplication, with respect to any Person,

      (a)  all obligations of such Person

          (1)   in respect of borrowed money (whether or not the recourse of
       the lender is to the whole of the assets of such Person or only to a
       portion thereof),

          (2)  evidenced by bonds, notes, debentures or similar instruments,

          (3)  representing the balance deferred and unpaid of the purchase
       price of any property or services (other than accounts payable or other
       obligations arising in the ordinary course of business),

          (4)  evidenced by bankers' acceptances or similar instruments issued
       or accepted by banks,

          (5)  for the payment of money relating to a Capitalized Lease
       Obligation, or

          (6)  evidenced by a letter of credit or a reimbursement obligation of
       such Person with respect to any letter of credit;

      (b)  all net obligations of such Person in respect of Currency Hedge
   Obligations, Interest Rate Hedge Agreements and Oil and Gas Hedging
   Contracts, except to the extent such net obligations are taken into account
   in the determination of future net revenues from proved oil and gas reserves
   for purposes of the calculation of Adjusted Consolidated Net Tangible Assets;

      (c)  all liabilities of others of the kind described in the preceding
   clauses (a) or (b) that such Person has guaranteed or that are otherwise its
   legal liability (including, with respect to any Production Payment, any
   warranties or guaranties of production or payment by such Person with
   respect to such Production Payment but excluding other contractual
   obligations of such Person with respect to such Production Payment);

      (d)  Indebtedness (as otherwise defined in this definition) of another
   Person secured by a Lien on any asset of such Person, whether or not such
   Indebtedness is assumed by such Person, the amount of such obligations being
   deemed to be the lesser of

          (1)  the full amount of such obligations so secured and

          (2)  the fair market value of such asset, as determined in good faith
       by the Board of Directors of such Person, which determination shall be
       evidenced by a resolution of such Board;

      (e)  with respect to such Person, the liquidation preference or any
   mandatory redemption payment obligations in respect of Disqualified Stock;

      (f)  the aggregate preference in respect of amounts payable on the issued
   and outstanding shares of preferred stock of any of the Company's Restricted
   Subsidiaries in the event of any voluntary or involuntary liquidation,
   dissolution or winding up (excluding any such preference attributable to
   such shares of preferred stock that are owned by such Person or any of its
   Restricted Subsidiaries; provided, that if such Person is the Company, such
   exclusion shall be for such preference attributable to such shares of
   preferred stock that are owned by the Company or any of its Restricted
   Subsidiaries); and

      (g)  any and all deferrals, renewals, extensions, refinancings and
   refundings (whether direct or indirect) of, or amendments, modifications or
   supplements to, any liability of the kind described in any of the preceding
   clauses (a), (b), (c), (d), (e) or (f) or this clause (g), whether or not
   between or among the same parties.

Subject to clause (c) of the preceding sentence, neither Dollar-Denominated
Production Payments nor Volumetric Production Payments shall be deemed to be
Indebtedness.

   "Interest Rate Hedging Agreements" means, with respect to the Company and
its Restricted Subsidiaries, the obligations of such Persons under (a) interest
rate swap agreements, interest rate cap agreements and interest

                                      40

<PAGE>

rate collar agreements and (b) other agreements or arrangements designed to
protect any such Person or any of its Subsidiaries against fluctuations in
interest rates.

   "Investment" of any Person means (a) all investments by such Person in any
other Person in the form of loans, advances or capital contributions, (b) all
guarantees of Indebtedness or other obligations of any other Person by such
Person, (c) all purchases (or other acquisitions for consideration) by such
Person of assets, Indebtedness, Capital Stock or other securities of any other
Person and (d) all other items that would be classified as investments
(including, without limitation, purchases of assets outside the ordinary course
of business) or advances on a balance sheet of such Person prepared in
accordance with GAAP.

   "Issue Date" means the first date on which the Notes are originally issued,
March 5, 2003.

   "Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or
equivalent statute or statutes) of any jurisdiction).

   "Make-Whole Amount" with respect to a Note means an amount equal to the
excess, if any, of (a) the present value of the remaining interest, premium and
principal payments due on such Note (excluding any portion of such payments of
interest accrued as of the redemption date) as if such Note were redeemed on
September 15, 2008, computed using a discount rate equal to the Treasury Rate
plus 50 basis points, over (b) the outstanding principal amount of such Note.
"Treasury Rate" with respect to a Note means the yield to maturity (calculated
on a semi-annual bond equivalent basis) at the time of the computation of
United States Treasury securities with a constant maturity (as compiled by and
published in the most recent Federal Reserve Statistical Release H.15(519),
which has become publicly available at least two business days prior to the
date of the redemption notice or, if such Statistical Release is no longer
published, any publicly available source of similar market data) most nearly
equal to the then remaining maturity of such Note assuming that such Note will
be redeemed on September 15, 2008; provided, however, that if the Make-Whole
Average Life of a Note is not equal to the constant maturity of the United
States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the
Make-Whole Average Life of such Note is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used. "Make-Whole Average Life" means,
with respect to a Note, the number of years (calculated to the nearest
one-twelfth of a year) between the date of redemption of such Note and
September 15, 2008.

   "Make-Whole Price" means the greater of (a) the sum of the outstanding
principal amount of the Notes to be redeemed plus the Make-Whole Amount of such
Notes and (b) the redemption price (expressed as a percentage of the principal
amount) of such Notes on September 15, 2008.

   "Maturity Date" means September 15, 2013.

   "Net Available Proceeds" means, with respect to any Asset Sale or
Sale/Leaseback Transaction of any Person, cash proceeds received (including any
cash proceeds received by way of deferred payment of principal pursuant to a
note or installment receivable or otherwise, but only as and when received, and
excluding any other consideration until such time as such consideration is
converted into cash) therefrom, in each case net of all legal, title and
recording tax expenses, commissions and other fees and expenses incurred, and
all federal, state or local taxes required to be accrued as a liability as a
consequence of such Asset Sale or Sale/Leaseback Transaction, and in each case
net of all Indebtedness which is secured by such assets, in accordance with the
terms of any Lien upon or with respect to such assets, or which must, by its
terms or in order to obtain a necessary consent to such

                                      41

<PAGE>

Asset Sale or Sale/Leaseback Transaction or by applicable law, be repaid out of
the proceeds from such Asset Sale or Sale/Leaseback Transaction and which is
actually so repaid.

   "Net Cash Proceeds" means, in the case of any sale by the Company of
securities pursuant to clauses (3) (B) or (C) of the covenant captioned
"Limitation on Restricted Payments," the aggregate net cash proceeds received
by the Company, after payment of expenses, commissions, discounts, taxes and
any other transaction costs incurred in connection therewith.

   "Net Working Capital" means (a) all current assets of the Company and its
Restricted Subsidiaries, minus (b) all current liabilities of the Company and
its Restricted Subsidiaries, except current liabilities included in
Indebtedness.

   "Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of a Non-Recourse Subsidiary as to which (a) neither the Company
nor any other Subsidiary (other than a Non-Recourse Subsidiary) (1) provides
credit support, including any undertaking, agreement or instrument which would
constitute Indebtedness or (2) is directly or indirectly liable for such
Indebtedness and (b) no default with respect to such Indebtedness (including
any rights which the holders thereof may have to take enforcement action
against a Non-Recourse Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Indebtedness (other than Non-Recourse
Indebtedness) of the Company or its Subsidiaries (other than a Non-Recourse
Subsidiary) to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity.

   "Non-Recourse Subsidiary" means a Subsidiary or an Affiliate (1) established
for the purpose of acquiring or investing in property securing Non-Recourse
Indebtedness, (2) substantially all of the assets of which consist of property
securing Non-Recourse Indebtedness, and (3) which shall have been designated as
a Non-Recourse Subsidiary by a Board Resolution adopted by the Board of
Directors of the Company, as evidenced by an officers' certificate delivered to
the Trustee. The Company may redesignate any Non-Recourse Subsidiary of the
Company to be a Subsidiary other than a Non-Recourse Subsidiary by a Board
Resolution adopted by the Board of Directors of the Company, as evidenced by an
officers' certificate delivered to the Trustee, if, after giving effect to such
redesignation, the Company could borrow $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to the first paragraph of the covenant
captioned "Limitation on Incurrence of Additional Indebtedness" (such
redesignation being deemed an incurrence of additional Indebtedness (other than
Non-Recourse Indebtedness)).

   "Oil and Gas Business" means the business of the exploration for, and
exploitation, development, production, processing (but not refining),
marketing, storage and transportation of, hydrocarbons, and other related
energy and natural resource businesses (including oil and gas services
businesses related to the foregoing).

   "Oil and Gas Hedging Contracts" means any oil and gas purchase or hedging
agreement, and other agreement or arrangement, in each case, that is designed
to provide protection against price fluctuations of oil, gas or other
commodities.

   "Oil and Gas Securities" means the Voting Stock of a Person primarily
engaged in the Oil and Gas Business, provided that such Voting Stock shall
constitute a majority of the Voting Stock of such Person in the event that such
Voting Stock is not registered under Section 12 of the Exchange Act.

   "Permitted Business Investments" means

      (1)  Investments in assets used in the Oil and Gas Business;

      (2)  the acquisition of Oil and Gas Securities;

                                      42

<PAGE>

      (3)  the entry into operating agreements, joint ventures, processing
   agreements, farm-out agreements, development agreements, area of mutual
   interest agreements, contracts for the sale, transportation or exchange of
   oil and natural gas, unitization agreements, pooling arrangements, joint
   bidding agreements, service contracts, partnership agreements (whether
   general or limited) or other similar or customary agreements, transactions,
   properties, interests or arrangements, and Investments and expenditures in
   connection therewith or pursuant thereto, in each case made or entered into
   in the ordinary course of the Oil and Gas Business, excluding, however,
   Investments in corporations;

      (4)  the acquisition of working interests, royalty interests or mineral
   leases relating to oil and gas properties;

      (5)  Investments by the Company or any Restricted Subsidiary in any
   Person which, immediately prior to the making of such Investment, is a
   Restricted Subsidiary;

      (6)  Investments in the Company by any Restricted Subsidiary;

      (7)  Investments permitted under the covenants captioned "Limitation on
   Sale of Assets" and "Limitation on Sale/Leaseback Transactions";

      (8)  Investments in any Person the consideration for which consists of
   Qualified Stock and

      (9)  any other Investments in an amount not to exceed 10% of Adjusted
   Consolidated Net Tangible Assets determined as of the date of the making or
   incurrence of such Investment.

   "Permitted Company Refinancing Indebtedness" means Indebtedness of the
Company, the net proceeds of which are used to renew, extend, refinance, refund
or repurchase outstanding Indebtedness of the Company, provided that

      (1)  if the Indebtedness (including the Notes) being renewed, extended,
   refinanced, refunded or repurchased is pari passu with or subordinated in
   right of payment to the Notes, then such Indebtedness is pari passu or
   subordinated in right of payment to, as the case may be, the Notes at least
   to the same extent as the Indebtedness being renewed, extended, refinanced,
   refunded or repurchased,

      (2)  such Indebtedness is scheduled to mature no earlier than the
   Indebtedness being renewed, extended, refinanced, refunded or repurchased,
   and

      (3)  such Indebtedness has an Average Life at the time such Indebtedness
   is incurred that is equal to or greater than the Average Life of the
   Indebtedness being renewed, extended, refinanced, refunded or repurchased;

provided, further, that such Indebtedness (to the extent that such Indebtedness
constitutes Permitted Company Refinancing Indebtedness) is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or
if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof, then
not in excess of the amount of liability in respect thereof determined in
accordance with GAAP).

   "Permitted Financial Investments" means the following kinds of instruments
if, in the case of instruments referred to in clauses (1)-(4) below, on the
date of purchase or other acquisition of any such instrument by the Company or
any Subsidiary, the remaining term to maturity is not more than one year:

      (1)  readily marketable obligations issued or unconditionally guaranteed
   as to principal of and interest thereon by the United States of America or
   by any agency or authority controlled or supervised by and acting as an
   instrumentality of the United States of America;

      (2)  repurchase obligations for instruments of the type described in
   clause (1) for which delivery of the instrument is made against payment;

                                      43

<PAGE>

      (3)  obligations (including, but not limited to, demand or time deposits,
   bankers' acceptances and certificates of deposit) issued by a depository
   institution or trust company incorporated or doing business under the laws
   of the United States of America, any state thereof or the District of
   Columbia or a branch or subsidiary of any such depository institution or
   trust company operating outside the United States, provided, that such
   depository institution or trust company has, at the time of the Company's or
   such Subsidiary's investment therein or contractual commitment providing for
   such investment, capital surplus or undivided profits (as of the date of
   such institution's most recently published financial statements) in excess
   of $500,000,000;

      (4)  commercial paper issued by any corporation, if such commercial paper
   has, at the time of the Company's or any Subsidiary's investment therein or
   contractual commitment providing for such investment, credit ratings of A-1
   (or higher) by Standard & Poor's Ratings Services and P-1 (or higher) by
   Moody's Investors Service, Inc.; and

      (5)  money market mutual or similar funds having assets in excess of
   $500,000,000.

   "Permitted Holders" means Aubrey K. McClendon and Tom L. Ward and their
respective Affiliates.

   "Permitted Indebtedness" means

      (1)  additional Indebtedness of the Company and its Restricted
   Subsidiaries under Credit Facilities in a principal amount outstanding under
   this clause (1) at any time not to exceed the greater of

          (a)  $300 million and

          (b)  $100 million plus 20% of Adjusted Consolidated Net Tangible
       Assets;

      (2)  Indebtedness of the Company and its Restricted Subsidiaries
   outstanding on the Issue Date;

      (3)  other Indebtedness of the Company and its Restricted Subsidiaries in
   a principal amount not to exceed $40 million at any one time outstanding;

      (4)  Non-Recourse Indebtedness;

      (5)  Indebtedness of the Company to any Restricted Subsidiary of the
   Company and Indebtedness of any Restricted Subsidiary of the Company to the
   Company or another Restricted Subsidiary of the Company;

      (6)  Permitted Company Refinancing Indebtedness;

      (7)  Permitted Subsidiary Refinancing Indebtedness;

      (8)  obligations of the Company and its Restricted Subsidiaries under
   Currency Hedge Obligations, Oil and Gas Hedging Contracts or Interest Rate
   Hedging Agreements;

      (9)  Indebtedness under the Notes (excluding any Add On Notes);

      (10)  Indebtedness of a Subsidiary pursuant to a Guarantee of the Notes
   in accordance with the Indenture; and

      (11)  Indebtedness consisting of any guarantee by the Company or one of
   its Restricted Subsidiaries of Indebtedness of the Company or a Restricted
   Subsidiary outstanding on the Issue Date or permitted by the Indenture to be
   incurred thereafter by the Company or its Restricted Subsidiary.

   "Permitted Investments" means Permitted Business Investments and Permitted
Financial Investments.

   "Permitted Liens" means

      (1)  Liens existing on the Issue Date;

      (2)  Liens securing Indebtedness under Credit Facilities permitted by the
   Indenture to be incurred;

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<PAGE>

      (3)  Liens now or hereafter securing any obligations under Interest Rate
   Hedging Agreements so long as the related Indebtedness (a) constitutes the
   Existing Notes or the Notes (or any Permitted Company Refinancing
   Indebtedness in respect thereof) or (b) is, or is permitted to be under the
   Indenture, secured by a Lien on the same property securing such interest
   rate hedging obligations;

      (4)  Liens securing Permitted Company Refinancing Indebtedness or
   Permitted Subsidiary Refinancing Indebtedness; provided, that such Liens
   extend to or cover only the property or assets currently securing the
   Indebtedness being refinanced and that the Indebtedness being refinanced was
   not incurred under the Credit Facilities;

      (5)  Liens for taxes, assessments and governmental charges not yet
   delinquent or being contested in good faith and for which adequate reserves
   have been established to the extent required by GAAP;

      (6)  mechanics', worker's, materialmen's, operators' or similar Liens
   arising in the ordinary course of business;

      (7)  Liens in connection with worker's compensation, unemployment
   insurance or other social security, old age pension or public liability
   obligations;

      (8)  Liens, deposits or pledges to secure the performance of bids,
   tenders, contracts (other than contracts for the payment of money), leases,
   public or statutory obligations, surety, stay, appeal, indemnity,
   performance or other similar bonds, or other similar obligations arising in
   the ordinary course of business;

      (9)  survey exceptions, encumbrances, easements or reservations of, or
   rights of others for, rights of way, zoning or other restrictions as to the
   use of real properties, and minor defects in title which, in the case of any
   of the foregoing, were not incurred or created to secure the payment of
   borrowed money or the deferred purchase price of property or services, and
   in the aggregate do not materially adversely affect the value of such
   properties or materially impair use for the purposes of which such
   properties are held by the Company or any Restricted Subsidiaries;

      (10)  Liens on, or related to, properties to secure all or part of the
   costs incurred in the ordinary course of business of exploration, drilling,
   development or operation thereof;

      (11)  Liens on pipeline or pipeline facilities which arise out of
   operation of law;

      (12)  judgment and attachment Liens not giving rise to an Event of
   Default or Liens created by or existing from any litigation or legal
   proceeding that are currently being contested in good faith by appropriate
   proceedings and for which adequate reserves have been made;

      (13)  (a)  Liens upon any property of any Person existing at the time of
   acquisition thereof by the Company or a Restricted Subsidiary, (b) Liens
   upon any property of a Person existing at the time such Person is merged or
   consolidated with the Company or any Restricted Subsidiary or existing at
   the time of the sale or transfer of any such property of such Person to the
   Company or any Restricted Subsidiary, or (c) Liens upon any property of a
   Person existing at the time such Person becomes a Restricted Subsidiary;
   provided, that in each case such Lien has not been created in contemplation
   of such sale, merger, consolidation, transfer or acquisition, and provided
   that in each such case no such Lien shall extend to or cover any property of
   the Company or any Restricted Subsidiary other than the property being
   acquired and improvements thereon;

      (14)  Liens on deposits to secure public or statutory obligations or in
   lieu of surety or appeal bonds entered into in the ordinary course of
   business;

      (15)  Liens in favor of collecting or payor banks having a right of
   setoff, revocation, refund or chargeback with respect to money or
   instruments of the Company or any Subsidiary on deposit with or in
   possession of such bank;

      (16)  purchase money security interests granted in connection with the
   acquisition of assets in the ordinary course of business and consistent with
   past practices, provided, that (A) such Liens attach only to

                                      45

<PAGE>

   the property so acquired with the purchase money indebtedness secured
   thereby and (B) such Liens secure only Indebtedness that is not in excess of
   100% of the purchase price of such assets;

      (17)  Liens reserved in oil and gas mineral leases for bonus or rental
   payments and for compliance with the terms of such leases;

      (18)  Liens arising under partnership agreements, oil and gas leases,
   farm-out agreements, division orders, contracts for the sale, purchase,
   exchange, transportation or processing (but not refining) of oil, gas or
   other hydrocarbons, unitization and pooling declarations and agreements,
   development agreements, operating agreements, area of mutual interest
   agreements, and other similar agreements which are customary in the Oil and
   Gas Business;

      (19)  Liens securing obligations of the Company or any of its Restricted
   Subsidiaries under Currency Hedge Obligations or Oil and Gas Hedging
   Contracts; and

      (20)  Liens to secure Dollar-Denominated Production Payments and
   Volumetric Production Payments.

   "Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of any
Restricted Subsidiary, the net proceeds of which are used to renew, extend,
refinance, refund or repurchase outstanding Indebtedness of such Restricted
Subsidiary, provided that

      (1)  if the Indebtedness (including the Guarantees) being renewed,
   extended, refinanced, refunded or repurchased is pari passu with or
   subordinated in right of payment to the Guarantees, then such Indebtedness
   is pari passu with or subordinated in right of payment to, as the case may
   be, the Guarantees at least to the same extent as the Indebtedness being
   renewed, extended, refinanced, refunded or repurchased,

      (2)  such Indebtedness is scheduled to mature no earlier than the
   Indebtedness being renewed, extended, refinanced, refunded or repurchased,
   and

      (3)  such Indebtedness has an Average Life at the time such Indebtedness
   is incurred that is equal to or greater than the Average Life of the
   Indebtedness being renewed, extended, refinanced, refunded or repurchased;

provided, further, that such Indebtedness (to the extent that such Indebtedness
constitutes Permitted Subsidiary Refinancing Indebtedness) is in an aggregate
principal amount (or, if such Indebtedness is issued at a price less than the
principal amount thereof, the aggregate amount of gross proceeds therefrom is)
not in excess of the aggregate principal amount then outstanding of the
Indebtedness being renewed, extended, refinanced, refunded or repurchased (or
if the Indebtedness being renewed, extended, refinanced, refunded or
repurchased was issued at a price less than the principal amount thereof, then
not in excess of the amount of liability in respect thereof determined in
accordance with GAAP); provided, however, that a Restricted Subsidiary shall
not incur refinancing Indebtedness to renew, extend, refinance, refund or
repurchase outstanding Indebtedness of the Company or another Subsidiary.

   "Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.

   "Preferred Stock" means the 624,037 shares of 7% Cumulative Convertible
Preferred Stock of the Company having a par value of $0.01 per share and a
liquidation preference of $50 per share issued by the Company, all of which
shares were redeemed as of May 1, 2001.

   "Preferred Stock Offering" means the private placement of the Preferred
Stock that closed on or about April 22, 1998.

   "Production Payments" means, collectively, Dollar-Denominated Production
Payments and Volumetric Production Payments.

                                      46

<PAGE>

   "Proved Developed Properties" means working interests, royalty interests,
and other interests in oil, gas or mineral leases or other interests in oil,
gas or mineral properties to which reserves are attributed which may properly
be categorized as proved developed reserves under Regulation S-X under the
Securities Act; together with all contracts, agreements and contract rights
which cover, affect or otherwise relate to such interests; all hydrocarbons and
all payments of any type in lieu of production; all improvements, fixtures,
equipment, information, data and other property used in connection therewith or
in connection with the treating, handling, storing, processing, transporting or
marketing of such hydrocarbons; all insurance policies relating thereto or to
the operation thereof; all personal property related thereto; and all proceeds
thereof.

   "Qualified Stock" means any Capital Stock that is not Disqualified Stock.

   "Reference Date" means March 31, 1998.

   "Reference Period" means, with respect to any Person, the period of four
consecutive fiscal quarters ending with the last full fiscal quarter for which
financial information is available immediately preceding any date upon which
any determination is to be made pursuant to the terms of either Indenture or
the related Notes.

   "Restricted Payment" means, with respect to any Person, any of the following:

      (1)  any dividend or other distribution in respect of such Person's
   Capital Stock (other than (a) dividends or distributions payable solely in
   Capital Stock (other than Disqualified Stock), (b) in the case of Restricted
   Subsidiaries of the Company, dividends or distributions payable to the
   Company or to a Restricted Subsidiary of the Company and (c) in the case of
   the Company, cash dividends payable on the Preferred Stock);

      (2)  the purchase, redemption or other acquisition or retirement for
   value of any Capital Stock, or any option, warrant, or other right to
   acquire shares of Capital Stock, of the Company or any of its Restricted
   Subsidiaries;

      (3)  the making of any principal payment on, or the purchase, defeasance,
   repurchase, redemption or other acquisition or retirement for value, prior
   to any scheduled maturity, scheduled repayment or scheduled sinking fund
   payment, of any Indebtedness which is subordinated in right of payment to
   the Notes; and

      (4)  the making by such Person of any Investment other than a Permitted
   Investment.

   "Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that, immediately
after giving effect to such designation of any Unrestricted Subsidiary, the
Company could incur at least $1.00 in additional Indebtedness (other than
Permitted Indebtedness) pursuant to the first paragraph of the covenant
captioned "Limitation on Incurrence of Additional Indebtedness."

   "Sale/Leaseback Transaction" means with respect to the Company or any of its
Restricted Subsidiaries, any arrangement with any Person providing for the
leasing by the Company or any of its Restricted Subsidiaries of any principal
property, acquired or placed into service more than 180 days prior to such
arrangement, whereby such property has been or is to be sold or transferred by
the Company or any of its Restricted Subsidiaries to such Person.

   "Senior Indebtedness" means any Indebtedness of the Company or a Subsidiary
Guarantor (whether outstanding on the Issue Date or thereafter incurred),
unless such Indebtedness is contractually subordinate or junior in right of
payment of principal, premium and interest to the Notes or the Guarantees,
respectively.

   "Subordinated Indebtedness of a Subsidiary Guarantor" means any Indebtedness
of such Subsidiary Guarantor, whether outstanding on the Issue Date or
thereafter created, incurred or assumed, which is contractually subordinate or
junior in right of payment of principal, premium and interest to the Guarantees.

                                      47

<PAGE>

   "Subordinated Indebtedness of the Company" means any Indebtedness of the
Company, whether outstanding on the Issue Date or thereafter created, incurred
or assumed, which is contractually subordinate or junior in right of payment of
principal, premium and interest to the Notes.

   "Subsidiary" means any subsidiary of the Company. A "subsidiary" of any
Person means

      (1)  a corporation a majority of whose Voting Stock is at the time,
   directly or indirectly, owned by such Person, by one or more subsidiaries of
   such Person or by such Person and one or more subsidiaries of such Person,

      (2)  a partnership in which such Person or a subsidiary of such Person
   is, at the date of determination, a general or limited partner of such
   partnership, but only if such Person or its subsidiary is entitled to
   receive more than 50 percent of the assets of such partnership upon its
   dissolution, or

      (3)  any other Person (other than a corporation or partnership) in which
   such Person, directly or indirectly, at the date of determination thereof,
   has (x) at least a majority ownership interest or (y) the power to elect or
   direct the election of a majority of the directors or other governing body
   of such Person.

   "Subsidiary Guarantor" means (a) each of the Subsidiaries that becomes a
guarantor of the Notes in compliance with the provisions of the Indenture and
(b) each of the Subsidiaries executing a supplemental indenture in which such
Subsidiary agrees to be bound by the terms of the Indenture.

   "Unrestricted Subsidiary" means (a) Chesapeake Energy Marketing, Inc. until
such time as such Subsidiary shall be designated as a Restricted Subsidiary in
accordance with the requirements of the Indenture, (b) any Subsidiary of an
Unrestricted Subsidiary and (c) any Subsidiary of the Company or of a
Restricted Subsidiary that is designated as an Unrestricted Subsidiary by a
resolution adopted by the Board of Directors in accordance with the
requirements of the following sentence. The Company may designate any
Subsidiary of the Company or of a Restricted Subsidiary (including a newly
acquired or newly formed Subsidiary or any Restricted Subsidiary of the
Company), to be an Unrestricted Subsidiary by a resolution of the Board of
Directors of the Company, as evidenced by written notice thereof delivered to
the Trustee, if immediately after giving effect to such designation,

      (1)  the Company could incur $1.00 of additional Indebtedness (other than
   Permitted Indebtedness) pursuant to the first paragraph of the covenant
   captioned "Limitation on Incurrence of Additional Indebtedness,"

      (2)  the Company could make an additional Restricted Payment of $1.00
   pursuant to the first paragraph of the covenant captioned "Limitation on
   Restricted Payments,"

      (3)  such Subsidiary does not own or hold any Capital Stock of, or any
   lien on any property of, the Company or any Restricted Subsidiary and

      (4)  such Subsidiary is not liable, directly or indirectly, with respect
   to any Indebtedness other than Unrestricted Subsidiary Indebtedness.

   "Unrestricted Subsidiary Indebtedness" of any Person means Indebtedness of
such Person

      (a)  as to which neither the Company nor any Restricted Subsidiary is
   directly or indirectly liable (by virtue of the Company's or such Restricted
   Subsidiary's being the primary obligor, or guarantor of, or otherwise liable
   in any respect on, such Indebtedness),

      (b)  which, with respect to Indebtedness incurred after the Issue Date by
   the Company or any Restricted Subsidiary, upon the occurrence of a default
   with respect thereto, does not result in, or permit any holder of any
   Indebtedness of the Company or any Restricted Subsidiary to declare a
   default on such Indebtedness of the Company or any Restricted Subsidiary and

                                      48

<PAGE>

      (c)  which is not secured by any assets of the Company or of any
   Restricted Subsidiary.

   "U.S. Government Securities" means securities that are (1) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clauses (1) or (2) are not callable or redeemable at the option of the
issuer thereof.

   "U.S. Legal Tender" means such coin or currency of the United States as at
the time of payment shall be legal tender for the payment of public and private
debts.

   "Volumetric Production Payments" mean production payment obligations
recorded as deferred revenue in accordance with GAAP, together with all
undertakings and obligations in connection therewith.

   "Voting Stock" means, with respect to any Person, securities of any class or
classes of Capital Stock in such Person entitling the holders thereof (whether
at all times or only so long as no senior class of stock has voting power by
reason of contingency) to vote in the election of members of the Board of
Directors or other governing body of such Person.

Events of Default

   The following will be Events of Default with respect to the Notes:

      (1)  default by the Company or any Subsidiary Guarantor in the payment of
   principal of or premium, if any, on the Notes when due and payable at
   maturity, upon repurchase pursuant to the covenants described under
   "Limitation on Sale of Assets" or "Change of Control," upon acceleration or
   otherwise;

      (2)  default by the Company or any Subsidiary Guarantor for 30 days in
   payment of any interest on the Notes;

      (3)  default by the Company or any Subsidiary Guarantor in the deposit of
   any optional redemption payment;

      (4)  default on any other Indebtedness (other than Non-Recourse
   Indebtedness and Unrestricted Subsidiary Indebtedness) of the Company, any
   Subsidiary Guarantor or any other Subsidiary (other than a Non-Recourse
   Subsidiary or an Unrestricted Subsidiary) if either

          (A)  such default results in the acceleration of the maturity of any
       such Indebtedness having a principal amount of $10.0 million or more
       individually or, taken together with the principal amount of any other
       such Indebtedness the maturity of which has been so accelerated, in the
       aggregate, or

          (B)  such default results from the failure to pay when due principal
       of, premium, if any, or interest on, any such Indebtedness, after giving
       effect to any applicable grace period (a "Payment Default"), having a
       principal amount of $10.0 million or more individually or, taken
       together with the principal amount of any other Indebtedness under which
       there has been a Payment Default, in the aggregate;

      (5)  default in the performance, or breach of, the covenants set forth in
   the covenants captioned "Limitation on Restricted Payments" and "Limitations
   on Mergers and Consolidations," or in the performance, or breach of, any
   other covenant or agreement of the Company or any Subsidiary Guarantor in
   the Indenture and failure to remedy such default within a period of 45 days
   after written notice thereof from the Trustee or Holders of 25% of the
   principal amount of the outstanding Notes;

      (6)  the entry by a court of one or more judgments or orders for the
   payment of money against the Company, any Subsidiary Guarantor or any other
   Subsidiary (other than a Non-Recourse Subsidiary or an Unrestricted
   Subsidiary, provided that neither the Company nor any Restricted Subsidiary
   is liable, directly

                                      49

<PAGE>

   or indirectly, for such judgment or order) in an aggregate amount in excess
   of $10.0 million (net of applicable insurance coverage by a third party
   insurer which is acknowledged in writing by such insurer) that has not been
   vacated, discharged, satisfied or stayed pending appeal within 60 days from
   the entry thereof;

      (7)  the failure of a Guarantee by a Subsidiary Guarantor to be in full
   force and effect, or the denial or disaffirmance by such entity thereof; or

      (8)  certain events involving bankruptcy, insolvency or reorganization of
   the Company or any Subsidiary of the Company (other than a Non-Recourse
   Subsidiary or an Unrestricted Subsidiary).

   The Indenture provides that the Trustee may withhold notice to the Holders
of the Notes of any default (except in payment of principal of, or premium, if
any, or interest on the Notes) if the Trustee considers it in the interest of
the Holders of the Notes to do so.

   If an Event of Default occurs and is continuing, the Trustee or the Holders
of not less than 25% in principal amount of the Notes outstanding may declare
the principal of and premium, if any, and accrued but unpaid interest on all
the Notes to be due and payable. Upon such a declaration, such principal,
premium, if any, and interest will be due and payable immediately. If an Event
of Default relating to certain events of bankruptcy, insolvency or
reorganization of the Company or any Subsidiary of the Company (other than a
Non-Recourse Subsidiary or an Unrestricted Subsidiary) occurs and is
continuing, the principal of, and premium, if any, and interest on all the
Notes will become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders of the Notes. The amount
due and payable on the acceleration of any Note will be equal to 100% of the
principal amount of the Note, plus accrued and unpaid interest to the date of
payment. Under certain circumstances, the Holders of a majority in principal
amount of the outstanding Notes may rescind any such acceleration with respect
to the Notes and its consequences.

   No Holder of a Note may pursue any remedy under the Indenture unless

      (1)  the Trustee shall have received written notice of a continuing Event
   of Default,

      (2)  the Trustee shall have received a request from Holders of at least
   25% in principal amount of the Notes to pursue such remedy,

      (3)  the Trustee shall have been offered indemnity reasonably
   satisfactory to it,

      (4)  the Trustee shall have failed to act for a period of 60 days after
   receipt of such notice, request and offer of indemnity and

      (5)  no direction inconsistent with such written request has been given
   to the Trustee during such 60-day period by the Holders of a majority in
   principal amount of the Notes;

provided, however, such provision does not affect the right of a Holder of any
Note to sue for enforcement of any overdue payment thereon.

   The Holders of a majority in principal amount of the Notes then outstanding
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain limitations specified in the Indenture. The Indenture requires the
annual filing by the Company with the Trustee of a written statement as to
compliance with the covenants contained in the Indenture.

Modification and Waiver

   Modifications and amendments to the Indenture or the Notes may be made by
the Company, the Subsidiary Guarantors and the Trustee with the consent of the
Holders of a majority in principal amount of the Notes then outstanding;
provided that no such modification or amendment may, without the consent of the
Holder of each Note then outstanding affected thereby,

      (1)  reduce the percentage of principal amount of Notes whose Holders
   must consent to an amendment, supplement or waiver;

                                      50

<PAGE>

      (2)  reduce the rate or change the time for payment of interest,
   including default interest, on any Note;

      (3)  reduce the principal amount of any Note or change the Maturity Date;

      (4)  reduce the redemption price, including premium, if any, payable upon
   redemption of any Note or change the time at which any Note may or shall be
   redeemed;

      (5)  reduce the purchase price, including the premium, if any, payable
   upon the repurchase of any Note upon an Asset Sale or Change in Control, or
   change the time at which any Note may or shall be repurchased thereunder;

      (6)  make any Note payable in money other than that stated in such Note;

      (7)  impair the right to institute suit for the enforcement of any
   payment of principal of, or premium, if any, or interest on, any Note;

      (8)  make any change in the percentage of principal amount of Notes
   necessary to waive compliance with certain provisions of the Indenture; or

      (9)  waive a continuing Default or Event of Default in the payment of
   principal of, premium, if any, or interest on the Notes.

   Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of any Holders of the Notes in certain limited
circumstances, including

      (a)  to cure any ambiguity, omission, defect or inconsistency,

      (b)  to provide for the assumption of the obligations of the Company or
   any Subsidiary Guarantor under the Indenture upon the merger, consolidation
   or sale or other disposition of all or substantially all of the assets of
   the Company or such Subsidiary Guarantor,

      (c)  to reflect the release of any Subsidiary Guarantor from its
   Guarantee of the Notes, or the addition of any Subsidiary of the Company as
   a Subsidiary Guarantor, in the manner provided in the Indenture,

      (d)  to comply with any requirement of the SEC in order to effect or
   maintain the qualification of the Indenture under the Trust Indenture Act or

      (e)  to make any change that would provide any additional benefit to the
   Holders or that does not adversely affect the rights of any Holder of the
   Notes in any material respect.

   The Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive any past default under the Indenture, except a default in
the payment of principal, premium, if any, or interest.

Legal Defeasance and Covenant Defeasance

   The Company may, at its option and at any time, elect to have its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). Such Legal Defeasance means that the Company will be deemed to
have paid and discharged the entire Indebtedness represented by such Notes,
except for

      (1)  the rights of Holders of the Notes to receive payments solely from
   the trust fund described in the following paragraph in respect of the
   principal of, premium, if any, and interest on the Notes when such payments
   are due,

      (2)  the Company's obligations with respect to the Notes concerning the
   issuance of temporary Notes, transfers and exchanges of the Notes,
   replacement of mutilated, destroyed, lost or stolen Notes, the maintenance
   of an office or agency where the Notes may be surrendered for transfer or
   exchange or presented for payment, and duties of paying agents,

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<PAGE>

      (3)  the rights, powers, trusts, duties and immunities of the Trustee,
   and the Company's obligations in connection therewith and

      (4)  the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the
obligations of the Company released with respect to certain covenants described
under "--Certain Covenants" ("Covenant Defeasance"), and thereafter any
omission to comply with such obligations shall not constitute a Default or
Event of Default. In the event Covenant Defeasance occurs, certain events (not
including non-payment) described under "--Events of Default" will no longer
constitute an Event of Default. If we exercise our Legal Defeasance or Covenant
Defeasance option, each Subsidiary Guarantor will be released from all its
obligations under the Indenture and its Guarantee.

   In order to exercise either Legal Defeasance or Covenant Defeasance under
the Indenture,

      (1)  the Company must irrevocably deposit with the Trustee, in trust, for
   the benefit of the Holders of the Notes, cash in U.S. Legal Tender, U.S.
   Government Securities, or a combination thereof, in such amounts as will be
   sufficient, in the opinion of a nationally recognized firm of independent
   public accountants, to pay the principal of, premium, if any, and interest
   on the outstanding amount of the Notes on the Maturity Date or on the
   applicable mandatory redemption date, as the case may be, of such principal
   or installment of principal, premium, if any, or interest;

      (2)  in the case of Legal Defeasance, the Company must deliver to the
   Trustee an opinion of counsel reasonably acceptable to the Trustee
   confirming that

          (A)  the Company has received from or there has been published by,
       the Internal Revenue Service a ruling or

          (B)  since the date of the Indenture, there has been a change in the
       applicable federal income tax law, in either case to the effect that,
       and based thereon such opinion of counsel shall confirm that, the
       Holders of the Notes will not recognize income, gain or loss for U.S.
       Federal income tax purposes as a result of such Legal Defeasance and
       will be subject to U.S. Federal income tax on the same amounts, in the
       same manner and at the same times as would have been the case if such
       Legal Defeasance had not occurred;

      (3)  in the case of Covenant Defeasance, the Company shall have delivered
   to the Trustee an opinion of counsel reasonably acceptable to the Trustee to
   the effect that the Holders of the Notes will not recognize income, gain or
   loss for U.S. Federal income tax purposes as a result of such Covenant
   Defeasance and will be subject to federal income tax on the same amounts, in
   the same manner and at the same times as would have been the case if such
   Covenant Defeasance had not occurred;

      (4)  no Default or Event of Default shall have occurred and be continuing
   on the date of such deposit or insofar as Events of Default from bankruptcy
   or insolvency events are concerned, at any time in the period ending on the
   91st day after the date of deposit;

      (5)  such Legal Defeasance or Covenant Defeasance shall not result in a
   breach or violation of, or constitute a default under the Indenture or any
   other material agreement or instrument to which the Company is a party or by
   which the Company is bound;

      (6)  the Company shall have delivered to the Trustee an officers'
   certificate stating that the deposit was not made by the Company with the
   intent of preferring the Holders of the Notes over other creditors of the
   Company or with the intent of defeating, hindering, delaying or defrauding
   creditors of the Company or others; and

      (7)  the Company shall have delivered to the Trustee an officers'
   certificate and an opinion of counsel each stating that the Company has
   complied with all conditions precedent provided for relating to the Legal
   Defeasance or the Covenant Defeasance.

                                      52

<PAGE>

Governing Law

   The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York.

The Trustee

   The Bank of New York is the Trustee under the Indenture. The Bank of New
York also serves as trustee for our 7.875% Senior Notes due 2004, our 8.375%
Senior Notes due 2008, our 8.125% Senior Notes due 2011, our 8.5% Senior Notes
due 2012, our 9% Senior Notes due 2012 and our 7.75% Senior Notes due 2015. We
may also maintain banking and other commercial relationships with the Trustee
and its affiliates in the ordinary course of business, and the Trustee may own
our debt securities. Its address is 101 Barclay Street, 8th Floor, New York,
New York 10286. The Company has also appointed the Trustee as the initial
registrar and paying agent under the Indenture.

   The Trustee is permitted to become an owner or pledgee of the Notes and may
otherwise deal with the Company or its Subsidiaries or Affiliates with the same
rights it would have if it were not Trustee. If, however, the Trustee acquires
any conflicting interest (as defined in the Trust Indenture Act) after an Event
of Default has occurred and is continuing, it must eliminate such conflict or
resign.

   In case an Event of Default shall occur (and be continuing), the Trustee
will be required to use the degree of care and skill of a prudent person in the
conduct of such person's own affairs. The Trustee will be under no obligation
to exercise any of its powers under the Indenture at the request of any of the
Holders of the Notes, unless such Holders have offered the Trustee indemnity
reasonably satisfactory to it.

Book Entry, Delivery and Form

   The Notes sold will be issued in the form of one or more global securities.
The global securities will be deposited with, or on behalf of, the Depositary
and registered in the name of the Depositary or its nominee. Except as set
forth below, the global securities may be transferred, in whole and not in
part, only to the Depositary or another nominee of the Depositary. Investors
may hold their beneficial interests in the global securities directly through
the Depositary if they have an account with the Depositary or indirectly
through organizations which have accounts with the Depositary.

   Notes that are issued as described below under "--Certificated Notes" will
be issued in definitive form. Upon the transfer of Notes in definitive form,
such Notes will, unless the global securities have previously been exchanged
for Notes in definitive form, be exchanged for an interest in the global
securities representing the aggregate principal amount of Notes being
transferred.

   The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation" within
the meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depositary was created to hold securities of institutions that have accounts
with the Depositary ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers (which may
include the initial purchasers), banks, trust companies, clearing corporations
and certain other organizations. Access to the Depositary's book-entry system
is also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
whether directly or indirectly.

   The Company expects that pursuant to procedures established by the
Depositary, upon the issuance of the global securities, the Depositary will
credit, on its book-entry registrations and transfer system, the aggregate

                                      53

<PAGE>

principal amount of new notes represented by such global securities to the
accounts of participants exchanging outstanding notes. Ownership of beneficial
interests in the global securities will be limited to participants or Persons
that may hold interests through participants. Ownership of beneficial interests
in the global securities will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interest) and such participants (with respect to
the owners of beneficial interests in the global securities other than
participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such limits and laws may impair the ability to transfer or
pledge beneficial interests in the global securities.

   So long as the Depositary, or its nominee, is the Holder of the global
securities, the Depositary or such nominee, as the case may be, will be
considered the sole legal owner and Holder of the Notes for all purposes of the
Notes and the Indenture. Except as set forth below, you will not be entitled to
have the Notes represented by the global securities registered in your name,
will not receive or be entitled to receive physical delivery of certificated
Notes in definitive form and will not be considered to be the owner or Holder
of any Notes under the global securities. The Company understands that under
existing industry practice, in the event an owner of a beneficial interest in
the global securities desires to take any action that the Depositary, as the
Holder of the global securities, is entitled to take, the Depositary will
authorize the participants to take such action, and that the participants will
authorize beneficial owners owning through such participants to take such
action or would otherwise act upon the instructions of beneficial owners owning
through them.

   The Company will make all payments on Notes represented by the global
securities registered in the name of and held by the Depositary or its nominee
to the Depositary or its nominee, as the case may be, as the owner and Holder
of the global securities.

   The Company expects that the Depositary or its nominee, upon receipt of any
payment in respect of the global securities, will credit participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the aggregate principal amount of the global securities as shown on the
records of the Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interest in the global
securities held through such participants will be governed by standing
instructions and customary practices and will be the responsibility of such
participants. The Company will not have any responsibility or liability for any
aspect of the records relating to, or payments made on account of, beneficial
ownership interests in the global securities for any Notes or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests or for any other aspect of the relationship between the Depositary
and its participants or the relationship between such participants and the
owners of beneficial interests in the global securities owning through such
participants.

   Although the Depositary has agreed to the foregoing procedures in order to
facilitate transfers of interests in the global securities among participants
of the Depositary, it is under no obligations to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. Neither
the Trustee nor the Company will have any responsibility for the performance by
the Depositary or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.

Certificated Notes

   Subject to certain conditions, the Notes represented by the global
securities will be exchangeable for certificated Notes in definitive form of
like tenor as such Notes if:

      (1)  the Depositary notifies the Company that it is unwilling or unable
   to continue as Depositary for the global securities and a successor is not
   promptly appointed or if at any time the Depositary ceases to be a clearing
   agency registered under the Exchange Act or

      (2)  the Company in its discretion at any time determines not to have all
   of the Notes represented by the global securities.

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<PAGE>

Any Notes that are exchangeable pursuant to the preceding sentence will be
exchanged for certificated Notes issuable in authorized denominations and
registered in such names as the Depositary shall direct. Subject to the
foregoing, the global securities are not exchangeable, except for global
securities of the same aggregate denominations to be registered in the name of
the Depositary or its nominee.

                                      55

<PAGE>

                       FEDERAL INCOME TAX CONSIDERATIONS

Federal Income Tax Considerations of the Exchange of Outstanding Notes for New
Notes

   The following discussion is a summary of certain federal income tax
considerations relevant to the exchange of outstanding notes for new notes, but
does not purport to be a complete analysis of all potential tax effects. The
discussion is based upon the Internal Revenue Code of 1986, as amended,
Treasury Regulations, Internal Revenue Service rulings and pronouncements and
judicial decisions now in effect, all of which may be subject to change at any
time by legislative, judicial or administrative action. These changes may be
applied retroactively in a manner that could adversely affect a holder of new
notes. The description does not consider the effect of any applicable foreign,
state, local or other tax laws or estate or gift tax considerations.

   We believe that the exchange of outstanding notes for new notes should not
be an exchange or otherwise a taxable event to a holder for United States
federal income tax purposes. Accordingly, a holder should have the same
adjusted issue price, adjusted basis and holding period in the new notes as it
had in the outstanding notes immediately before the exchange.

                             PLAN OF DISTRIBUTION

   Based on interpretations by the staff of the SEC in no action letters issued
to third parties, we believe that you may transfer new notes issued under the
exchange offer in exchange for the outstanding notes if:

  .   you acquire the new notes in the ordinary course of your business; and

  .   you are not engaged in, and do not intend to engage in, and have no
      arrangement or understanding with any person to participate in, a
      distribution of such new notes.

   You may not participate in the exchange offer if you are:

  .   our "affiliate" within the meaning of Rule 405 under the Securities Act;
      or

  .   a broker-dealer that acquired outstanding notes directly from us.

   Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. To date, the staff of the SEC has
taken the position that broker-dealers may fulfill their prospectus delivery
requirements with respect to transactions involving an exchange of securities
such as this exchange offer, other than a resale of an unsold allotment from
the original sale of the outstanding notes, with the prospectus contained in
this registration statement. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of new notes received in exchange for outstanding notes where such
outstanding notes were acquired as a result of market-making activities or
other trading activities. We have agreed that, for a period of up to 180 days
after the effective date of this registration statement, we will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until such date, all dealers
effecting transactions in new notes may be required to deliver a prospectus.

   If you wish to exchange new notes for your outstanding notes in the exchange
offer, you will be required to make representations to us as described in
"Exchange Offer--Purpose and Effect of the Exchange Offer" and "--Procedures
for Tendering--Your Representations to Us" in this prospectus. As indicated in
the letter of transmittal, you will be deemed to have made these
representations by tendering your outstanding notes in the exchange offer. In
addition, if you are a broker-dealer who receives new notes for your own
account in exchange for outstanding notes that were acquired by you as a result
of market-making activities or other trading activities, you will be required
to acknowledge, in the same manner, that you will deliver a prospectus in
connection with any resale by you of such new notes.

                                      56

<PAGE>

   We will not receive any proceeds from any sale of new notes by
broker-dealers. New notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market:

  .   in negotiated transactions;

  .   through the writing of options on the new notes or a combination of such
      methods of resale;

  .   at market prices prevailing at the time of resale; and

  .   at prices related to such prevailing market prices or negotiated prices.

Any such resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer or the purchasers of any such new notes. Any
broker-dealer that resells new notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act. The letter of
transmittal states that by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

   For a period of 180 days after the effective date of this registration
statement, we will promptly send additional copies of this prospectus and any
amendment or supplement to this prospectus to any broker-dealer that requests
such documents in the letter of transmittal. We have agreed to pay all expenses
incident to the exchange offer (including the expenses of one counsel for the
holders of the outstanding notes) other than commissions or concessions of any
broker-dealers and will indemnify the holders of the outstanding notes
(including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.

                                 LEGAL MATTERS

   The validity of the new notes offered in this exchange offer will be passed
upon for us by Vinson & Elkins L.L.P. in reliance on the opinion of Commercial
Law Group P.C. with respect to matters of Oklahoma law. Shannon T. Self, a
shareholder in Commercial Law Group, P.C., is a director of Chesapeake, and he
owns 104,992 shares of our common stock.

                                    EXPERTS

   The consolidated financial statements of Chesapeake Energy Corporation,
incorporated in this prospectus by reference to Chesapeake's annual report on
Form 10-K for the year ended December 31, 2002 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.

   Estimates of the oil and gas reserves of Chesapeake Energy Corporation and
related future net cash flows and the present values thereof, included in
Chesapeake's annual report on Form 10-K for the year ended December 31, 2002,
were based upon reserve reports prepared by Williamson Petroleum Consultants,
Inc., Ryder Scott Company, L.P., Netherland, Sewell and Associates, Inc. and
Lee Keeling and Associates, Inc., independent petroleum engineers. We have
incorporated these estimates in reliance on the authority of each such firm as
experts in such matters.

                      WHERE YOU CAN FIND MORE INFORMATION

   We file annual, quarterly and current reports and other information with the
SEC. You may inspect and copy such material at the public reference facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington,

                                      57

<PAGE>

D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the
public reference room. You can also find our SEC filings at the SEC's website
at www.sec.gov and on our website at www.chkenergy.com. Information contained
on our website is not part of this prospectus.

   In addition, our reports and other information concerning us can be
inspected at the New York Stock Exchange, 20 Broad Street, New York, New York
10005, where our common stock is listed.

   The following documents we filed with the SEC pursuant to the Exchange Act
are incorporated herein by reference:

  .   our annual report on Form 10-K for the fiscal year ended December 31,
      2002; and

  .   our current reports on Form 8-K filed on January 10, 2003, February 4,
      2003, February 28, 2003, March 4, 2003, March 14, 2003 and March 19, 2003
      (excluding any information furnished pursuant to Item 9 on any such
      current report on Form 8-K).

   All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act (excluding any information furnished pursuant to Item 9 or
Item 12 on any current report on Form 8-K) subsequent to the date of this
filing and prior to the termination of this offering shall be deemed to be
incorporated in this prospectus and to be a part hereof from the date of the
filing of such document. Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for all purposes
to the extent that a statement contained in this prospectus, or in any other
subsequently filed document which is also incorporated or deemed to be
incorporated by reference, modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.

   We will provide without charge to each person to whom this prospectus is
delivered, upon written or oral request of such person, a copy of any or all
documents incorporated by reference in this prospectus. Requests for such
copies should be directed to Jennifer M. Grigsby, Secretary, Chesapeake Energy
Corporation, 6100 North Western Avenue, Oklahoma City, Oklahoma 73118, by mail,
or if by telephone at (405) 848-8000.

                          FORWARD-LOOKING STATEMENTS

   This prospectus includes and incorporates by reference "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Forward-looking statements give our current
expectations or forecasts of future events. They include statements regarding
oil and gas reserve estimates, planned capital expenditures, the drilling of
oil and gas wells and future acquisitions, the impact of the El Paso, ONEOK and
Vintage acquisitions, expected oil and gas production, cash flow and
anticipated liquidity, business strategy and other plans and objectives for
future operations, expected future expenses and utilization of net operating
loss carryforwards. Statements concerning the fair values 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.

   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. Factors that could cause actual
results to differ materially from expected results are described under "Risk
Factors" and include:

  .   the volatility of oil and gas prices;

  .   our substantial indebtedness;

  .   the cost and availability of drilling and production services;

  .   our commodity price risk management activities, including counterparty
      contract performance risk;

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<PAGE>

  .   uncertainties inherent in estimating quantities of oil and gas reserves,
      projecting future rates of production and the timing of development
      expenditures;

  .   our ability to replace reserves;

  .   the availability of capital;

  .   uncertainties inherent in estimating quantities of oil and gas reserves;

  .   projecting future rates of production and the timing of development
      expenditures;

  .   uncertainties in evaluating oil and gas reserves of acquired properties
      and associated potential liabilities;

  .   drilling and operating risks;

  .   our ability to generate future taxable income sufficient to utilize our
      federal and state income tax net operating loss (NOL) carryforwards
      before their expiration;

  .   future ownership changes which could result in additional limitations to
      our NOLs;

  .   adverse effects of governmental and environmental regulation;

  .   losses possible from pending or future litigation;

  .   the strength and financial resources of our competitors; and

  .   the loss of officers or key employees.

   We caution you not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus or as of the
date of the report or document in which they are contained, and we undertake no
obligation to update such information. We urge you to carefully review and
consider the disclosures made in this prospectus and our reports filed with the
SEC and incorporated by reference herein that attempt to advise interested
parties of the risks and factors that may affect our business.

                                      59

<PAGE>

                                                                        ANNEX A

                             LETTER OF TRANSMITTAL
                                   To Tender
                    Outstanding 7.50% Senior Notes due 2013
                                      of
                         CHESAPEAKE ENERGY CORPORATION
    Pursuant to the Exchange Offer and Prospectus dated              , 2003

  THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
  YORK CITY TIME, ON       , 2003 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE
  OFFER IS EXTENDED BY THE COMPANY.

                  The Exchange Agent for the Exchange Offer is:

                             The Bank of New York

                          101 Barclay Street--7 East
                           New York, New York 10286
                          Attention: Corporate Trust
                        Operations--Reorganization Unit
                           Facsimile: (212) 298-1915
                           Telephone: (212) 815-2742

   IF YOU WISH TO EXCHANGE CURRENTLY OUTSTANDING 7.50% SENIOR NOTES DUE 2013
(THE "OUTSTANDING NOTES") FOR AN EQUAL AGGREGATE PRINCIPAL AMOUNT OF NEW 7.50%
SENIOR NOTES DUE 2013 PURSUANT TO THE EXCHANGE OFFER, YOU MUST VALIDLY TENDER
(AND NOT WITHDRAW) OUTSTANDING NOTES TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE BY CAUSING AN AGENT'S MESSAGE TO BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO SUCH TIME.

                               -----------------

                                      60

<PAGE>

   The undersigned hereby acknowledges receipt and review of the Prospectus,
dated March [      ], 2003 (the "Prospectus"), of Chesapeake Energy
Corporation, an Oklahoma corporation (the "Company"), and this Letter of
Transmittal (the "Letter of Transmittal"), which together describe the
Company's offer (the "Exchange Offer") to exchange its 7.50% Senior Notes due
2013 (the "New Notes") that have been registered under the Securities Act of
1933, as amended (the "Securities Act"), for a like principal amount of its
issued and outstanding 7.50% Senior Notes due 2013 (the "Outstanding Notes").
Capitalized terms used but not defined herein have the respective meaning given
to them in the Prospectus.

   The Company reserves the right, at any time or from time to time, to extend
the Exchange Offer at its discretion, in which event the term "Expiration Date"
shall mean the latest date to which the Exchange Offer is extended. The Company
shall notify the Exchange Agent and each registered holder of the Outstanding
Notes of any extension by oral or written notice prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.

   This Letter of Transmittal is to be used by holders of the Outstanding
Notes. Tender of Outstanding Notes is to be made according to the Automated
Tender Offer Program ("ATOP") of the Depository Trust Company ("DTC") pursuant
to the procedures set forth in the prospectus under the caption "The Exchange
Offer--Procedures for Tendering." DTC participants that are accepting the
Exchange Offer must transmit their acceptance to DTC, which will verify the
acceptance and execute a book-entry delivery to the Exchange Agent's DTC
account. DTC will then send a computer generated message known as an "agent's
message" to the exchange agent for its acceptance. For you to validly tender
your Outstanding Notes in the Exchange Offer, the Exchange Agent must receive,
prior to the Expiration Date, an agent's message under the ATOP procedures that
confirms that:

  .   DTC has received your instructions to tender your Outstanding Notes; and

  .   You agree to be bound by the terms of this Letter of Transmittal.

   By using the ATOP procedures to tender outstanding notes, you will not be
required to deliver this Letter of Transmittal to the Exchange Agent. However,
you will be bound by its terms, and you will be deemed to have made the
acknowledgments and the representations and warranties it contains, just as if
you had signed it.

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<PAGE>

             PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

   1.  By tendering Outstanding Notes in the Exchange Offer, you acknowledge
receipt of the Prospectus and this Letter of Transmittal.

   2.  By tendering Outstanding Notes in the Exchange Offer, you represent and
warrant that you have full authority to tender the Outstanding Notes described
above and will, upon request, execute and deliver any additional documents
deemed by the Company to be necessary or desirable to complete the tender of
Outstanding Notes.

   3.  You understand that the tender of the Outstanding Notes pursuant to all
of the procedures set forth in the Prospectus will constitute an agreement
between and the Company as to the terms and conditions set forth in the
Prospectus.

   4.  By tendering Outstanding Notes in the Exchange Offer, you acknowledge
that the Exchange Offer is being made in reliance upon interpretations
contained in no-action letters issued to third parties by the staff of the
Securities and Exchange Commission (the "SEC"), including Exxon Capital
Holdings Corp., SEC No-Action Letter (available April 13, 1989), Morgan Stanley
& Co., Inc., SEC No-Action Letter (available June 5, 1991) and Shearman &
Sterling, SEC No-Action Letter (available July 2, 1993), that the New Notes
issued in exchange for the Outstanding Notes pursuant to the Exchange Offer may
be offered for resale, resold and otherwise transferred by holders thereof
(other than a broker-dealer who purchased Outstanding Notes exchanged for such
New Notes directly from the Company to resell pursuant to Rule 144A or any
other available exemption under the Securities Act of 1933, as amended (the
"Securities Act") and any such holder that is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act), without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that such New Notes are acquired in the ordinary course of such
holders' business and such holders are not participating in, and have no
arrangement with any person to participate in, the distribution of such New
Notes.

   5.  By tendering Outstanding Notes in the Exchange Offer, you represent and
warrant that:

      a.  the New Notes acquired pursuant to the Exchange Offer are being
   obtained in the ordinary course of your business, whether or not you are the
   holder;

      b.  neither you nor any such other person is engaging in or intends to
   engage in a distribution of such New Notes;

      c.  neither you nor any such other person has an arrangement or
   understanding with any person to participate in the distribution of such New
   Notes; and

      d.  neither the holder nor any such other person is an "affiliate," as
   such term is defined under Rule 405 promulgated under the Securities Act, of
   the Company.

   6.  You may, if you are unable to make all of the representations and
warranties contained in Item 5 above and as otherwise permitted in the
Registration Rights Agreement (as defined below), elect to have your
Outstanding Notes registered in the shelf registration statement described in
the Registration Rights Agreement, dated as of March 5, 2003 (the "Registration
Rights Agreement"), by and among the Company, the Subsidiary Guarantors (as
defined therein) and the Initial Purchaser (as defined therein). Such election
may be made only by notifying the Company in writing at 6100 North Western
Avenue, Oklahoma City, OK 73118, Attention: Chief Financial Officer. By making
such election, you agree, as a holder of Outstanding Notes participating in a
shelf registration, to indemnify and hold harmless the Company, each of the
directors of the Company, each of the officers of the Company who signs such
shelf registration statement, each person who controls the Company within the
meaning of either the Securities Act or the Securities Exchange Act of 1934, as
amended (the

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<PAGE>

"Exchange Act"), and each other holder of Outstanding Notes, from and against
any and all losses, claims, damages or liabilities caused by any untrue
statement or alleged untrue statement of a material fact contained in any shelf
registration statement or prospectus, or in any supplement thereto or amendment
thereof, or caused by the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; but only with respect to information relating to the undersigned
furnished in writing by or on behalf of the undersigned expressly for use in a
shelf registration statement, a prospectus or any amendments or supplements
thereto. Any such indemnification shall be governed by the terms and subject to
the conditions set forth in the Registration Rights Agreement, including,
without limitation, the provisions regarding notice, retention of counsel,
contribution and payment of expenses set forth therein. The above summary of
the indemnification provision of the Registration Rights Agreement is not
intended to be exhaustive and is qualified in its entirety by the Registration
Rights Agreement.

   7.  If you are a broker-dealer that will receive New Notes for its own
account in exchange for Outstanding Notes that were acquired as a result of
market-making activities or other trading activities, you acknowledge, by
tendering Outstanding Notes in the Exchange Offer, that you will deliver a
prospectus in connection with any resale of such New Notes; however, by so
acknowledging and by delivering a prospectus, you will not be deemed to admit
that you are an "underwriter" within the meaning of the Securities Act. If you
are a broker-dealer and Outstanding Notes held for your own account were not
acquired as a result of market-making or other trading activities, such
Outstanding Notes cannot be exchanged pursuant to the Exchange Offer.

   8.  Any of your obligations hereunder shall be binding upon your successors,
assigns, executors, administrators, trustees in bankruptcy and legal and
personal representatives of the undersigned.

                                      63

<PAGE>

                                 INSTRUCTIONS

        FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

   1.  Book-Entry Confirmations.

   Any confirmation of a book-entry transfer to the Exchange Agent's account at
DTC of Outstanding Notes tendered by book-entry transfer (a "Book-Entry
Confirmation"), as well as an agent's message, and any other documents required
by this Letter of Transmittal, must be received by the Exchange Agent at its
address set forth herein prior to 5:00 P.M., New York City time, on the
Expiration Date.

   2.  Partial Tenders.

   Tenders of Outstanding Notes will be accepted only in integral multiples of
$1,000. The entire principal amount of Outstanding Notes delivered to the
Exchange Agent will be deemed to have been tendered unless otherwise
communicated to the Exchange Agent. If the entire principal amount of all
Outstanding Notes is not tendered, then Outstanding Notes for the principal
amount of Outstanding Notes not tendered and Notes issued in exchange for any
Outstanding Notes accepted will be delivered to the holder via the facilities
of DTC promptly after the Outstanding Notes are accepted for exchange.

   3.  Validity of Tenders.

   All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of tendered Outstanding Notes will be
determined by the Company, in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any or all
tenders not in proper form or the acceptance for exchange of which may, in the
opinion of counsel for the Company, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Exchange Offer or any
defect or irregularity in the tender of any Outstanding Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including the
instructions on this Letter of Transmittal) will be final and binding on all
parties. Unless waived, any defects or irregularities in connection with
tenders of Outstanding Notes must be cured within such time as the Company
shall determine. Although the Company intends to notify holders of defects or
irregularities with respect to tenders of Outstanding Notes, neither the
Company, the Exchange Agent, nor any other person shall be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give such notification. Tenders of Outstanding Notes
will not be deemed to have been made until such defects or irregularities have
been cured or waived. Any Outstanding Notes received by the Exchange Agent that
are not properly tendered and as to which the defects or irregularities have
not been cured or waived will be returned by the Exchange Agent to the
tendering holders via the facilities of DTC, as soon as practicable following
the Expiration Date.

   4.  Waiver of Conditions.

   The Company reserves the absolute right to waive, in whole or part, any of
the conditions to the Exchange Offer set forth in the Prospectus or in this
Letter of Transmittal.

   5.  No Conditional Tender.

   No alternative, conditional, irregular or contingent tender of Outstanding
Notes will be accepted.

   6.  Request for Assistance or Additional Copies.

   Requests for assistance or for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address or
telephone number set forth on the cover page of this Letter of

                                      64

<PAGE>

Transmittal. Holders may also contact their broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Exchange Offer.

   7.  Withdrawal.

   Tenders may be withdrawn only pursuant to the limited withdrawal rights set
forth in the Prospectus under the caption "Exchange Offer--Withdrawal of
Tenders."

   8.  No Guarantee of Late Delivery.

   There is no procedure for guarantee of late delivery in the Exchange Offer.

IMPORTANT:  By using the ATOP procedures to tender outstanding notes, you will
not be required to deliver this Letter of Transmittal to the Exchange Agent.
However, you will be bound by its terms, and you will be deemed to have made
the acknowledgments and the representations and warranties it contains, just as
if you had signed it.

                                      65

<PAGE>

                                    PART II

                    INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.  Indemnification of Officers and Directors

   Section 1031 of the Oklahoma General Corporation Act, under which Chesapeake
is incorporated, authorizes the indemnification of directors and officers under
certain circumstances. Article VIII of the Certificate of Incorporation of
Chesapeake and Article VI of the Bylaws of Chesapeake also provide for
indemnification of directors and officers under certain circumstances. These
provisions, together with Chesapeake's indemnification obligations under
individual indemnity agreements with its directors and officers, may be
sufficiently broad to indemnify such persons for liabilities under the
Securities Act of 1933 (the "Securities Act"), as amended. In addition,
Chesapeake maintains insurance, which insures its directors and officers
against certain liabilities.

   The Oklahoma General Corporation Act provides for indemnification of each of
Chesapeake's officers and directors against (a) expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
reason of such person being or having been a director, officer, employee or
agent of Chesapeake, or of any other corporation, partnership, joint venture,
trust or other enterprise at the request of Chesapeake, other than an action by
or in the right of Chesapeake. To be entitled to indemnification, the
individual must have acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interest of Chesapeake, and with respect to
any criminal action, the person seeking indemnification had no reasonable cause
to believe that the conduct was unlawful and (b) expenses, including attorneys'
fees, actually and reasonably incurred in connection with the defense or
settlement of any action or suit by or in the right of Chesapeake brought by
reason of the person seeking indemnification being or having been a director,
officer, employee or agent of Chesapeake, or any other corporation,
partnership, joint venture, trust or other enterprise at the request of
Chesapeake, provided the actions were in good faith and were reasonably
believed to be in or not opposed to the best interest of Chesapeake, except
that no indemnification shall be made in respect of any claim, issue or matter
as to which the individual shall have been adjudged liable to Chesapeake,
unless and only to the extent that the court in which such action was decided
has determined that the person is fairly and reasonably entitled to indemnity
for such expenses which the court deems proper. Article VIII of Chesapeake's
Certificate of Incorporation provides for indemnification of Chesapeake's
director and officers. The Oklahoma General Corporation Act also permits
Chesapeake to purchase and maintain insurance on behalf of Chesapeake's
directors and officers against any liability arising out of their status as
such, whether or not Chesapeake would have the power to indemnify them against
such liability. These provisions may be sufficiently broad to indemnify such
persons for liabilities arising under the Securities Act.

   Chesapeake has entered into indemnity agreements with each of its directors
and executive officers. Under each indemnity agreement, Chesapeake will pay on
behalf of the indemnitee any amount which he is or becomes legally obligated to
pay because of (a) any claim or claims from time to time threatened or made
against him by any person because of any act or omission or neglect or breach
of duty, including any actual or alleged error or misstatement or misleading
statement, which he commits or suffers while acting in his capacity as a
director and/or officer of Chesapeake or an affiliate or (b) being a party, or
being threatened to be made a party, to any threatened, pending or contemplated
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was an officer, director,
employee or agent of Chesapeake or an affiliate or is or was serving at the
request of Chesapeake as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
payments which Chesapeake would be obligated to make under an indemnification
agreement could include damages, charges, judgments, fines, penalties,
settlements and costs, cost of investigation and cost of defense of legal,
equitable or criminal actions, claims or proceedings and appeals therefrom, and
costs of attachment, supersedeas, bail, surety or other bonds. Chesapeake also
provides liability insurance for each of its directors and executive officers.

                                     II-1

<PAGE>

Item 21.  Exhibits And Financial Statement Schedules

   (a)  Exhibits.  The following exhibits are filed herewith pursuant to the
requirements of Item 601 of Regulation S-K:

<TABLE>
<CAPTION>
Exhibit
  No.                                                Description
-------                                              -----------
<C>     <S>

  2.1     Purchase and Sale Agreement By and Between El Paso Production Company and Noric, L.P. as
          Seller and Chesapeake EP Corporation as Buyer dated February 21, 2003. Incorporated herein by
          reference to Exhibit 2.1 to Chesapeake's annual report on Form 10-K for the year ended December
          31, 2002.

  3.1     Chesapeake's Restated Certificate of Incorporation together with Chesapeake's Certificate of
          Designation for the 6.75% Cumulative Convertible Preferred Stock, Certificate of Elimination for
          2,000 Shares of 6.75% Cumulative Convertible Preferred Stock, Certificate of Designation for the
          Series A Junior Participating Preferred Stock and Certificate of Designation for the 6.00%
          Cumulative Convertible Preferred Stock. Incorporated herein by reference to Exhibit 3.1 to
          Chesapeake's registration statement on Form S-3 filed April 9, 2003.

  3.2     Chesapeake's Bylaws. Incorporated herein by reference to Exhibit 3.2 to Chesapeake's quarterly
          report on Form 10-Q for the quarter ended June 30, 2001.

  4.1     Indenture dated as of March 15, 1997 among Chesapeake, as issuer, Chesapeake Operating, Inc.,
          Chesapeake Gas Development Corporation and Chesapeake Exploration Limited Partnership, as
          Subsidiary Guarantors, and The Bank of New York (formerly United States Trust Company of New
          York), as Trustee, with respect to 7.875% Senior Notes due 2004. Incorporated herein by reference
          to Exhibit 4.1 to Chesapeake's registration statement on Form S-4 (No. 333-24995). First
          Supplemental Indenture dated December 17, 1997 and Second Supplemental Indenture dated
          February 16, 1998. Incorporated herein by reference to Exhibit 4.1.1 to Chesapeake's transition
          report on Form 10-K for the six months ended December 31, 1997. Second [Third] Supplemental
          Indenture dated April 22, 1998. Incorporated herein by reference to Exhibit 4.1.1 to Chesapeake's
          registration statement on Form S-3 registration statement (No. 333-57235). Fourth Supplemental
          Indenture dated July 1, 1998. Incorporated herein by reference to Exhibit 4.1.1 to Chesapeake's
          quarterly report on Form 10-Q for the quarter ended September 30, 1998. Fifth Supplemental
          Indenture dated November 19, 1999. Incorporated herein by reference to Exhibit 4.1.1 to
          Chesapeake's quarterly report on Form 10-Q for the quarter ended March 31, 2001. Sixth
          Supplemental Indenture dated December 31, 1999. Incorporated herein by reference to Exhibit
          4.1.1 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30, 2001.
          Seventh Supplemental Indenture dated September 12, 2001. Incorporated herein by reference to
          Exhibit 4.1.2 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30,
          2001. Eighth Supplemental Indenture dated October 1, 2001. Incorporated herein by reference to
          Exhibit 4.1.3 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30,
          2001. Ninth Supplemental Indenture dated December 17, 2001. Incorporated herein by reference to
          Exhibit 4.1.1 to Chesapeake's registration statement on Form S-3 (No. 333-76546). Tenth
          Supplemental Indenture dated as of June 28, 2002. Incorporated herein by reference to Exhibit
          4.1.2 to Chesapeake's registration statement on Form S-4 (No. 333-99289). Eleventh Supplemental
          Indenture dated as of July 8, 2002. Incorporated herein by reference to Exhibit 4.1.3 to
          Chesapeake's registration statement on Form S-4 (No. 333-99289). Twelfth Supplemental
          Indenture dated as of February 14, 2003 to Indenture dated as of March 15, 1997 among
          Chesapeake, as issuer, its subsidiaries signatory thereto as Subsidiary Guarantors, and The Bank of
          New York (formerly United States Trust Company of New York), as Trustee, with respect to
          7.875% Senior Notes due 2004. Incorporated herein by reference to Exhibit 4.2.1 to Chesapeake's
          annual report on Form 10-K for the year ended December 31, 2002.
</TABLE>

                                     II-2

<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                                                Description
-------                                              -----------
<C>     <S>

  4.2     Indenture dated as of March 15, 1997 among Chesapeake, as issuer, Chesapeake Operating, Inc.,
          Chesapeake Gas Development Corporation and Chesapeake Exploration Limited Partnership, as
          Subsidiary Guarantors, and The Bank of New York (formerly United States Trust Company of New
          York), as Trustee, with respect to 8.5% Senior Notes due 2012. Incorporated herein by reference to
          Exhibit 4.3 to Chesapeake's registration statement on Form S-4 (No. 333-24995). First
          Supplemental Indenture dated December 17, 1997 and Second Supplemental Indenture dated
          February 16, 1998. Incorporated herein by reference to Exhibit 4.2.1 to Chesapeake's transition
          report on Form 10-K for the six months ended December 31, 1997. Second [Third] Supplemental
          Indenture dated April 22, 1998. Incorporated herein by reference to Exhibit 4.2.1 to Chesapeake's
          Amendment No. 1 to Form S-3 registration statement (No. 333-57235). Fourth Supplemental
          Indenture dated July 1, 1998. Incorporated herein by reference to Exhibit 4.2.1 to Chesapeake's
          quarterly report on Form 10-Q for the quarter ended September 30, 1998. Fifth Supplemental
          Indenture dated November 19, 1999. Incorporated herein by reference to Exhibit 4.2.1 to
          Chesapeake's quarterly report on Form 10-Q for the quarter ended March 31, 2001. Sixth
          Supplemental Indenture dated December 31, 1999. Incorporated herein by reference to Exhibit
          4.2.1 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30, 2001.
          Seventh Supplemental Indenture dated September 12, 2001. Incorporated herein by reference to
          Exhibit 4.2.2 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30,
          2001. Eighth Supplemental Indenture dated October 1, 2001. Incorporated herein by reference to
          Exhibit 4.2.3 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30,
          2001. Ninth Supplemental Indenture dated December 17, 2001. Incorporated herein by reference to
          Exhibit 4.2.1 to Chesapeake's registration statement on Form S-3 (No. 333-76546). Tenth
          Supplemental Indenture dated as of June 28, 2002. Incorporated herein by reference to Exhibit
          4.2.2 to Chesapeake's registration statement on Form S-4 (No. 333-99289). Eleventh Supplemental
          Indenture dated as of July 8, 2002. Incorporated herein by reference to Exhibit 4.2.3 to
          Chesapeake's registration statement on Form S-4 (No. 333-99289). Twelfth Supplemental
          Indenture dated as of February 14, 2003 to Indenture dated as of March 15, 1997 among
          Chesapeake, as issuer, its subsidiaries signatory thereto as Subsidiary Guarantors, and The Bank of
          New York (formerly United States Trust Company of New York), as Trustee, with respect to 8.5%
          Senior Notes due 2012. Incorporated herein by reference to Exhibit 4.2.1 to Chesapeake's annual
          report on Form 10-K for the year ended December 31, 2002.

  4.3     Indenture dated as of April 6, 2001 among Chesapeake, as issuer, its subsidiaries signatory thereto,
          as Subsidiary Guarantors, and The Bank of New York (formerly United States Trust Company of
          New York), as Trustee, with respect to 8.125% Senior Notes due 2011. Incorporated herein by
          reference to Exhibit 4.6 to Chesapeake's quarterly report on Form 10-Q for the quarter ended
          March 31, 2001. Supplemental Indenture dated May 14, 2001. Incorporated herein by reference to
          Exhibit 4.6 to Chesapeake's quarterly report on Form 10-Q for the quarter ended March 31, 2001.
          Second Supplemental Indenture dated September 12, 2001. Incorporated herein by reference to
          Exhibit 4.3.1 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30,
          2001. Third Supplemental Indenture dated October 1, 2001. Incorporated herein by reference to
          Exhibit 4.3.2 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30,
          2001. Fourth Supplemental Indenture dated December 17, 2001. Incorporated herein by reference
          to Exhibit 4.3.1 to Chesapeake's registration statement on Form S-3 (No. 333-76546). Fifth
          Supplemental Indenture dated as of June 28, 2002. Incorporated herein by reference to Exhibit
          4.3.2 to Chesapeake's registration statement on Form S-4 (No. 333-99289). Sixth Supplemental
          Indenture dated July 8, 2002. Incorporated herein by reference to Exhibit 4.3.3 to Chesapeake's
          registration statement on Form S-4 (No. 333-99289). Seventh Supplemental Indenture dated as of
          February 14, 2003 to Indenture dated as of April 6, 2001 among Chesapeake, as issuer, its
          subsidiaries signatory thereto as Subsidiary Guarantors, and The Bank of New York (formerly
</TABLE>

                                     II-3

<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                                                Description
-------                                              -----------
<C>     <S>

          United States Trust Company of New York), as Trustee, with respect to 8.125% Senior Notes due
          2011. Incorporated herein by reference to Exhibit 4.3.1 to Chesapeake's annual report on Form
          10-K for the year ended December 31, 2002.

  4.4     Indenture dated as of November 5, 2001 among Chesapeake, as issuer, its subsidiaries signatory
          thereto, as Subsidiary Guarantors and The Bank of New York, as Trustee, with respect to 8.375%
          Senior Notes due 2008. Incorporated herein by reference to Exhibit 4.16 to Chesapeake's
          registration statement on Form S-4 (No. 333-74584). First Supplemental Indenture dated December
          17, 2001. Incorporated herein by reference to Exhibit 4.16.1 to Chesapeake's registration statement
          on Form S-3 (No. 333-76546). Second Supplemental Indenture dated as of June 28, 2002.
          Incorporated herein by reference to Exhibit 4.4.2 to Chesapeake's registration statement on Form
          S-4 (No. 333-99289). Third Supplemental Indenture dated as of July 8, 2002. Incorporated herein
          by reference to Exhibit 4.4.3 to Chesapeake's registration statement on Form S-4 (No. 333-99289).
          Fourth Supplemental Indenture dated as of February 14, 2003 to Indenture dated as of November 5,
          2001 among Chesapeake, as issuer, its subsidiaries signatory thereto as Subsidiary Guarantors, and
          The Bank of New York, as Trustee, with respect to 8.375% Senior Notes due 2008. Incorporated
          herein by reference to Exhibit 4.4.1 to Chesapeake's annual report on Form 10-K for the year ended
          December 31, 2002.

  4.5     Indenture dated as of August 12, 2002 among Chesapeake, as issuer, its subsidiaries signatory
          thereto, as Subsidiary Guarantors and The Bank of New York, with respect to its 9% Senior Notes
          due 2012. Incorporated herein by reference to Exhibit 4.14 to Chesapeake's registration statement
          on Form S-4 (No. 333-99289). First Supplemental Indenture dated as of February 14, 2003 to
          Indenture dated as of August 12, 2002 among Chesapeake, as issuer, its subsidiaries signatory
          thereto as Subsidiary Guarantors, and The Bank of New York, as Trustee, with respect to 9.0%
          Senior Notes due 2012. Incorporated herein by reference to Exhibit 4.5.1 to Chesapeake's annual
          report on Form 10-K for the year ended December 31, 2002.

  4.6     Indenture dated as of December 20, 2002 among Chesapeake, as issuer, the subsidiaries signatory
          thereto, as Subsidiary Guarantors and The Bank of New York, as Trustee with respect to our 7.75%
          Senior Notes due 2015. Incorporated herein by reference to Exhibit 4.5 to Chesapeake's
          registration statement on Form S-4 (No. 333-102445). First Supplemental Indenture dated as of
          February 14, 2003 to Indenture dated as of December 20, 2002 among Chesapeake, as issuer, its
          subsidiaries signatory thereto as Subsidiary Guarantors, and The Bank of New York, as Trustee,
          with respect to 7.75% senior Notes due 2015. Incorporated herein by reference to Exhibit 4.6.1 to
          Chesapeake's annual report on Form 10-K for the year ended December 31, 2002.

  4.7*    Indenture dated as of March 5, 2003 among Chesapeake, as issuer, the subsidiaries signatory
          thereto, as Subsidiary Guarantors and The Bank of New York, as Trustee with respect to our 7.50%
          Senior Notes due 2013.

  4.8     Agreement to furnish copies of unfiled long-term debt instruments. Incorporated herein by
          reference to Chesapeake's transition report on Form 10-K for the six months ended December 31,
          1997.

  4.9     $225,000,000 Second Amended and Restated Credit Agreement, dated as of June 11, 2001, among
          Chesapeake Energy Corporation, Chesapeake Exploration Limited Partnership, as Borrower, Bear
          Stearns Corporate Lending Inc., as Syndication Agent, Union Bank of California, N.A., as
          Administrative Agent and Collateral Agent, BNP Paribas and Toronto Dominion (Texas), Inc., as
          Co-Documentation Agents and other lenders party thereto. Incorporated herein by reference to
          Exhibit 4.6 to Chesapeake's quarterly report on Form 10-Q for the quarter ended June 30, 2001.
          Consent and waiver letter dated September 10, 2001 and consent and waiver letter dated October 5,
          2001. Incorporated herein by reference to Exhibits 4.6.1 and 4.6.2 to Chesapeake's quarterly report
</TABLE>

                                     II-4

<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                                                Description
-------                                              -----------
<C>     <S>

          on Form 10-Q for the quarter ended September 30, 2001, respectively. Consent and waiver letter
          dated November 2, 2001. Incorporated herein by reference to Exhibit 4.6.1 to Chesapeake's
          registration statement on Form S-4 (No. 333-74584). First Amendment dated March 8, 2002 with
          respect to Second Amended and Restated Credit Agreement. Incorporated herein by reference to
          Exhibit 4.6.1 to Chesapeake's annual report on Form 10-K for the year ended December 31, 2001.
          Consent and waiver letter dated April 15, 2002. Incorporated herein by reference to Exhibit 4.6.1 to
          Chesapeake's quarterly report on Form 10-Q for the quarter ended March 31, 2002. Second
          Amendment dated June 4, 2002 with respect to Second Amended and Restated Credit Agreement.
          Incorporated by reference to Exhibit 4.6.1 to Chesapeake's quarterly report on Form 10-Q for the
          quarter ended June 30, 2002. Consent and waiver letter dated August 2, 2002. Incorporated herein
          by reference to Exhibit 4.6.2 to Chesapeake's registration statement on Form S-4 (No. 333-99289).
          Third Amendment dated September 20, 2002, with respect to the Second Amendment and Restated
          Credit Agreement. Incorporated herein by reference to Exhibit 4.6.3 to Chesapeake's quarterly
          report on Form 10-Q for the quarter ended September 30, 2002. Fourth Amendment dated
          November 4, 2002, with respect to the Second Amended and Restated Credit Agreement.
          Incorporated herein by reference to Exhibit 4.6.4 to Chesapeake's quarterly report on Form 10-Q
          for the quarter ended September 30, 2002. Consent and waiver letter dated December 11, 2002 with
          respect to the Second Amended and Restated Credit Agreement. Incorporated herein by reference
          to Exhibit 4.6.1 to Chesapeake's registration statement on Form S-4 (No. 333-102446.)

4.9.1*    Fifth Amendment dated March 3, 2003 with respect to Second Amended and Restated Credit
          Agreement dated as of June 11, 2001 among Chesapeake Energy Corporation, Chesapeake
          Exploration Limited Partnership, as Borrower, Bear Stearns Corporate Lending Inc., as Syndication
          Agent, Union Bank of California, N.A., as Administrative Agent and Collateral Agent, BNP
          Paribas and Toronto Dominion (Texas), Inc., as Co-Documentation Agents and other lender parties
          thereto.

  4.10    Warrant Agreement dated as of September 9, 1997 between Gothic Energy Corporation and UMB
          Bank, N.A. (formerly American Stock Transfer & Trust Company), as warrant agent, and
          Supplement to Warrant Agreement dated as of January 16, 2001. Incorporated herein by reference
          to Exhibit 4.9 to Registrant's annual report on Form 10-K for the year ended December 31, 2000.

  4.11    Registration Rights Agreement dated as of September 9, 1997 among Gothic Energy Corporation,
          two of its subsidiaries, Oppenheimer & Co., Inc., Banc One Capital Corporation and Paribas
          Corporation. Incorporated herein by reference to Exhibit 4.10 to Registrant's annual report on Form
          10-K for the year ended December 31, 2000.

  4.15    Warrant Agreement dated as of April 21, 1998 between Gothic Energy Corporation and American
          Stock Transfer & Trust Company, as warrant agent, and Supplement to Warrant Agreement dated
          as of January 16, 2001. Incorporated herein by reference to Exhibit 4.14 to Registrant's annual
          report on Form 10-K for the year ended December 31, 2000.

  4.16    Warrant Registration Rights Agreement dated as of April 21, 1998 among Gothic Energy
          Corporation and purchasers of units consisting of its 14-1/8% senior secured discount notes due
          2006 and warrants to purchase its common stock. Incorporated herein by reference to Exhibit 4.15
          to Registrant's annual report on Form 10-K for the year ended December 31, 2000.

  4.17    Rights Agreement dated as of July 15, 1998 between Chesapeake and UMB Bank, N.A., as rights
          agent. Incorporated herein by reference to Exhibit 1 to Chesapeake's registration statement on
          Form 8-A filed July 16, 1998. Amendment No. 1 dated September 11, 1998. Incorporated herein by
          reference to Exhibit 10.3 to Chesapeake's quarterly report on Form 10-Q for the quarter ended
          September 30, 1998.
</TABLE>

                                     II-5

<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                                               Description
-------                                             -----------
<C>      <S>

   4.18*   Registration Rights Agreement dated March 5, 2003 between Chesapeake and Salomon Smith
           Barney Inc., Bear Stearns & Co., Inc., Credit Suisse First Boston LLC, Lehman Brothers Inc.,
           Morgan Stanley & Co. Incorporated, BNP Paribas Securities Corp., Credit Lyonnais Securities
           (USA) Inc., and TD Securities (USA) Inc.

    4.19   Registration Rights Agreement dated March 5, 2003 between Chesapeake and Credit Suisse First
           Boston LLC, Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc., Bear Stearns &
           Co., Inc., Lehman Brothers Inc., CIBC World Markets Corp., Johnson Rice & Company L.L.C.,
           RBC Dain Rauscher Inc. and Simmons & Company International. Incorporated by reference to
           Exhibit 4.19 to Chesapeake's registration statement on Form S-3 filed April 8, 2003.

    5.1*   Opinion of Vinson & Elkins L.L.P. regarding the validity of the securities being registered.

    5.2*   Opinion of Commercial Law Group, P.C. regarding the validity of the securities being registered.

 10.1.1+   Chesapeake's 1992 Incentive Stock Option Plan. Incorporated herein by reference to Exhibit
           10.1.1 to Chesapeake's registration statement on Form S-4 (No. 33-93718).

 10.1.2+   Chesapeake's 1992 Nonstatutory Stock Option Plan, as Amended. Incorporated herein by
           reference to Exhibit 10.1.2 to Chesapeake's quarterly report on Form 10-Q for the quarter ended
           December 31, 1996.

 10.1.3+   Chesapeake's 1994 Stock Option Plan, as amended. Incorporated herein by reference to Exhibit
           10.1.3 to Chesapeake's quarterly report on Form 10-Q for the quarter ended December 31, 1996.

 10.1.4+   Chesapeake's 1996 Stock Option Plan. Incorporated herein by reference to Chesapeake's
           definitive proxy statement for its 1996 annual meeting of shareholders.

 10.1.5+   Chesapeake's 1999 Stock Option Plan. Incorporated herein by reference to Exhibit 10.1.5 to
           Chesapeake's quarterly report on Form 10-Q for the quarter ended June 30, 1999.

 10.1.6+   Chesapeake's 2000 Employee Stock Option Plan. Incorporated herein by reference to Exhibit
           10.1.6 to Chesapeake's quarterly report on Form 10-Q for the quarter ended March 31, 2000.

 10.1.7+   Chesapeake's 2000 Executive Officer Stock Option Plan. Incorporated herein by reference to
           Exhibit 10.1.7 to Chesapeake's quarterly report on Form 10-Q for the quarter ended March 31,
           2000.

 10.1.8+   Chesapeake's 2001 Stock Option Plan. Incorporated herein by reference to Exhibit B to
           Chesapeake's definitive proxy statement for its 2001 annual meeting of shareholders filed April
           30, 2001.

 10.1.9+   Chesapeake's 2001 Executive Officer Stock Option Plan. Incorporated herein by reference to
           Exhibit 10.1.9 to Chesapeake's quarterly report on Form 10-Q for the quarter ended June 30,
           2001.

10.1.10+   Chesapeake's 2001 Nonqualified Stock Option Plan. Incorporated herein by reference to Exhibit
           10.1.10 to Chesapeake's quarterly report on Form 10-Q for the quarter ended June 30, 2001.

10.1.11+   Chesapeake's 2002 Stock Option Plan. Incorporated herein by reference to Exhibit A to
           Chesapeake's definitive proxy statement for its 2002 annual meeting of shareholders filed April
           29, 2002.

10.1.12+   Chesapeake's 2002 Non-Employee Director Stock Option Plan. Incorporated herein by reference
           to Exhibit B to Chesapeake's definitive proxy statement for its 2002 annual meeting of
           shareholders filed April 29, 2002.

10.1.13+   Chesapeake's 2002 Nonqualified Stock Option Plan. Incorporated herein by reference to Exhibit
           10.1.11 to Chesapeake's quarterly report on Form 10-Q for the quarter ended June 30, 2002.
</TABLE>

                                     II-6

<PAGE>

<TABLE>
<CAPTION>
Exhibit
No.                                                Description
-------                                            -----------
<C>     <S>

10.1.14   Chesapeake's 2003 Stock Award Plan for Non-Employee Directors. Incorporated herein by
          reference to Exhibit 10.1.14 to Chesapeake's annual report on Form 10-K for the year ended
          December 31, 2002.

10.1.15   Chesapeake Energy Corporation 401(k) Make-Up Plan. Incorporated herein by reference to
          Exhibit 10.1.15 to Chesapeake's annual report on Form 10-K for the year ended December 31,
          2002.

10.1.16   Chesapeake Energy Corporation Deferred Compensation Plan. Incorporated herein by reference to
          Exhibit 10.1.16 to Chesapeake's annual report on Form 10-K for the year ended December 31,
          2002.

10.2.1+   Second Amended and Restated Employment Agreement dated as of July 1, 2001, between Aubrey
          K. McClendon and Chesapeake Energy Corporation. Incorporated herein by reference to Exhibit
          4.7 to Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30, 2001.

10.2.2+   Second Amended and Restated Employment Agreement dated as of July 1, 2001, between Tom L.
          Ward and Chesapeake Energy Corporation. Incorporated herein by reference to Exhibit 4.8 to
          Chesapeake's quarterly report on Form 10-Q for the quarter ended September 30, 2001.

10.2.3+   Amended and Restated Employment Agreement dated as of August 1, 2000 between Marcus C.
          Rowland and Chesapeake Energy Corporation. Incorporated herein by reference to Exhibit 10.2.3
          to Chesapeake's registration statement on Form S-1 (No. 333-45872).

10.2.4+   Employment Agreement dated as of July 1, 2000, between Michael A. Johnson and Chesapeake
          Energy Corporation. Incorporated herein by reference to Exhibit 10.2.8 to Chesapeake's quarterly

10.2.5+   Employment Agreement dated as of July 1, 2000, between Martha A. Burger and Chesapeake
          Energy Corporation. Incorporated herein by reference to Exhibit 10.2.9 to Chesapeake's quarterly
          report on Form 10-Q for the quarter ended June 30, 2000.

10.3+     Form of Indemnity Agreement for officers and directors of Chesapeake and its subsidiaries.
          Incorporated herein by reference to Exhibit 10.30 to Chesapeake's registration statement on Form
          S-1 (No. 33-55600).

10.10     Partnership Agreement of Chesapeake Exploration Limited Partnership dated December 27, 1994
          between Chesapeake Energy Corporation and Chesapeake Operating, Inc. Incorporated herein by
          reference to Exhibit 10.10 to Chesapeake's registration statement on Form S-4 (No. 33-93718).

10.11     Amended and Restated Limited Partnership Agreement of Chesapeake Louisiana, L.P. dated June
          30, 1997 between Chesapeake Operating, Inc. and Chesapeake Energy Louisiana Corporation.
          Incorporated herein by reference to Exhibit 10.11 to Chesapeake's annual report on Form 10-K
          for the year ended June 30, 1997.

12        Computation of Ratios of Earnings and Fixed Charges. Incorporated herein by reference to
          Exhibit 12.1 to Chesapeake's annual report on Form 10-K for the year ended December 31, 2002.

21*       Subsidiaries of Chesapeake.

23.1*     Consent of PricewaterhouseCoopers LLP.

23.2*     Consent of Williamson Petroleum Consultants, Inc.

23.3*     Consent of Ryder Scott Company L.P.

23.4*     Consent of Lee Keeling and Associates, Inc.

23.5*     Consent of Netherland, Sewell and Associates, Inc.

23.6*     Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).

23.7*     Consent of Commercial Law Group, P.C. (included in Exhibit 5.2).
</TABLE>

                                     II-7

<PAGE>

<TABLE>
<CAPTION>
Exhibit
  No.                                        Description
-------                                      -----------
<C>     <S>

 24.1*    Power of Attorney (included in the signature pages of this Registration Statement).

 25.1*    Statement of Eligibility on Form T-1 of The Bank of New York.
</TABLE>
--------
* Filed herewith.
+ Management contract or compensatory plan or arrangement.

   (b)  Financial Statement Schedules.  Incorporated herein by reference to
Item 8 of Chesapeake's annual report on Form 10-K for the year ended December
31, 2002.

Item 22.  Undertakings

   Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of any
Registrant, we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by any Registrant of expenses incurred
or paid by a director, officer or controlling person of such Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, such Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

   Each registrant hereby undertakes

      (1)  To file, during any period in which offers or sales are being made,
   a post-effective amendment to this registration statement:

          (a)  To include any prospectus required by section 10(a)(3) of the
       Securities Act of 1933;

          (b)  To reflect in the prospectus any facts or events arising after
       the effective date of the registration statement (or the most recent
       post-effective amendment thereof) which, individually or in the
       aggregate, represent a fundamental change in the information set forth
       in the registration statement. Notwithstanding the foregoing, any
       increase or decrease in volume of securities offered (if the total
       dollar value of securities offered would not exceed that which was
       registered) and any deviation from the low or high end of the estimated
       maximum offering range may be reflected in the form of prospectus filed
       with the Commission pursuant to Rule 424(b) if, in the aggregate, the
       changes in volume and price represent no more than 20% change in the
       maximum aggregate offering price set forth in the "Calculation of
       Registration Fee" table in the effective registration statement;

          (c)  To include any material information with respect to the plan of
       distribution not previously disclosed in the registration statement or
       any material change to such information in the registration statement;
       and

      (2)  That, for the purpose of determining any liability under the
   Securities Act of 1933, each such post-effective amendment shall be deemed
   to be a new registration statement relating to the securities offered
   therein, and the offering of such securities at that time shall be deemed to
   be the initial bona fide offering thereof.

      (3)  To remove from registration by means of a post-effective amendment
   any of the securities being registered which remain unsold at the
   termination of the offering.

      (4)  That, for purposes of determining any liability under the Securities
   Act of 1933, each filing of the registrants annual report pursuant to
   section 13(a) or section 15(d) of the Securities Exchange Act of 1934

                                     II-8

<PAGE>

   (and, where applicable, each filing of an employee benefit plan's annual
   report pursuant to section 15(d) of the Securities Exchange Act of 1934)
   that is incorporated by reference in the registration statement shall be
   deemed to be a new registration statement relating to the securities offered
   therein, and the offering of such securities at that time shall be deemed to
   be the initial bona fide offering thereof.

      (5)  To respond to requests for information that is incorporated by
   reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
   Form, within one business day of receipt of such request, and to send the
   incorporated documents by first class mail or other equally prompt means.

   This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding to
the request.

      (6)  To supply by means of a post-effective amendment all information
   concerning a transaction, and the company being acquired involved therein,
   that was not the subject of and included in this Registration Statement when
   it became effective.

                                     II-9

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oklahoma City, State of
Oklahoma on April 7, 2003.

                                          CHESAPEAKE ENERGY CORPORATION


                                              By:   /s/  AUBREY K. MCCLENDON
                                                  -----------------------------
                                                       Aubrey K. McClendon
                                                    Chairman of the Board and
                                                     Chief Executive Officer

   Each person whose signature appears below authorizes Aubrey K. McClendon and
Marcus C. Rowland, and each of them, each of whom may act without joinder of
the other, to execute in the name of each such person who is then an officer or
director of the company and to file any amendments to this registration
statement necessary or advisable to enable the company to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof, in connection
with the registration of the securities which are the subject of this
registration statement, which amendments may make such changes in the
registration statement as such attorney may deem appropriate. Pursuant to the
requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date
indicated.

          Signature                      Capacity                 Date
          ---------                      --------                 ----

  /s/  AUBREY K. MCCLENDON     Chairman of the Board, Chief   April 7, 2003
-----------------------------    Executive Officer and
     Aubrey K. McClendon         Director (Principal
                                 Executive Officer)

      /s/  TOM L. WARD         President, Chief Operating     April 7, 2003
-----------------------------    Officer and Director
         Tom L. Ward             (Principal Executive
                                 Officer)

   /s/  MARCUS C. ROWLAND      Executive Vice President and   April 7, 2003
-----------------------------    Chief Financial Officer
      Marcus C. Rowland          (Principal Financial
                                 Officer)

   /s/  MICHAEL A. JOHNSON     Senior Vice                    April 7, 2003
-----------------------------    President--Accounting,
     Michael A. Johnson          Controller and Chief
                                 Accounting Officer
                                 (Principal Accounting
                                 Officer)

-----------------------------  Director
    Edgar F. Heizer, Jr.

     /s/  BREENE M. KERR       Director                       April 7, 2003
-----------------------------
       Breene M. Kerr

   /s/  CHARLES T. MAXWELL     Director                       April 7, 2003
-----------------------------
     Charles T. Maxwell

    /s/  SHANNON T. SELF       Director                       April 7, 2003
-----------------------------
       Shannon T. Self

/s/  FREDERICK B. WHITTEMORE   Director                       April 7, 2003
-----------------------------
   Frederick B. Whittemore

                                     II-10

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, each Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oklahoma City, State of
Oklahoma on April 7, 2003.

                                           CHESAPEAKE EP CORPORATION
                                           CHESAPEAKE DELTA CORP.
                                           CHESAPEAKE OPERATING, INC.
                                           NOMAC DRILLING CORPORATION

                                           By:    /s/  MARCUS C. ROWLAND
                                                  -----------------------------
                                           Name:  Marcus C. Rowland
                                           Title: Vice President

   Each person whose signature appears below authorizes Aubrey K. McClendon and
Marcus C. Rowland, and each of them, each of whom may act without joinder of
the other, to execute in the name of each such person who is then an officer or
director of the company and to file any amendments to this registration
statement necessary or advisable to enable the company to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof, in connection
with the registration of the securities which are the subject of this
registration statement, which amendments may make such changes in the
registration statement as such attorney may deem appropriate. Pursuant to the
requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date
indicated.

          Signature                      Capacity                 Date
          ---------                      --------                 ----

  /s/  AUBREY K. MCCLENDON     President and Director         April 7, 2003
-----------------------------    (Principal Executive
     Aubrey K. McClendon         Officer)

      /s/  TOM L. WARD         Vice President and Director    April 7, 2003
-----------------------------
         Tom L. Ward

   /s/  MARCUS C. ROWLAND      Vice President (Principal      April 7, 2003
-----------------------------    Financial and Accounting
      Marcus C. Rowland          Officer)

                                     II-11

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, each Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oklahoma City, State of
Oklahoma on April 7, 2003.

                                           THE AMES COMPANY, L.L.C.
                                           CARMEN ACQUISITION, L.L.C.
                                           CHESAPEAKE ACQUISITION, L.L.C.
                                           CHESAPEAKE ENO ACQUISITION, L.L.C.
                                           CHESAPEAKE FOCUS, L.L.C.
                                           CHESAPEAKE KNAN ACQUISITION, L.L.C.
                                           CHESAPEAKE MOUNTAIN FRONT, L.L.C.
                                           CHESAPEAKE ORC, L.L.C.
                                           CHESAPEAKE ROYALTY, L.L.C.
                                           GOTHIC ENERGY, L.L.C.
                                           GOTHIC PRODUCTION, L.L.C.
                                           SAP ACQUISITION, L.L.C.

                                           By:    /s/  MARCUS C. ROWLAND
                                           Name:  Marcus C. Rowland
                                           Title: Vice President

   Each person whose signature appears below authorizes Aubrey K. McClendon and
Marcus C. Rowland, and each of them, each of whom may act without joinder of
the other, to execute in the name of each such person who is then an officer or
manager of the company and to file any amendments to this registration
statement necessary or advisable to enable the company to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof, in connection
with the registration of the securities which are the subject of this
registration statement, which amendments may make such changes in the
registration statement as such attorney may deem appropriate. Pursuant to the
requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date
indicated.

          Signature                      Capacity                 Date
          ---------                      --------                 ----

  /s/  AUBREY K. MCCLENDON     Chief Executive Officer and    April 7, 2003
-----------------------------    Manager (Principal
     Aubrey K. McClendon         Executive Officer)

      /s/  TOM L. WARD         President and Manager          April 7, 2003
-----------------------------
         Tom L. Ward

   /s/  MARCUS C. ROWLAND      Vice President (Principal      April 7, 2003
-----------------------------    Financial and Accounting
      Marcus C. Rowland          Officer)

                                     II-12

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, each Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oklahoma City, State of
Oklahoma on April 7, 2003.

                                           CHESAPEAKE ENERGY LOUISIANA
                                             CORPORATION

                                           By:    /s/  AUBREY K. MCCLENDON
                                           Name:  Aubrey K. McClendon
                                           Title: Chief Executive Officer

   Each person whose signature appears below authorizes Aubrey K. McClendon and
Marcus C. Rowland, and each of them, each of whom may act without joinder of
the other, to execute in the name of each such person who is then an officer or
director of the company and to file any amendments to this registration
statement necessary or advisable to enable the company to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof, in connection
with the registration of the securities which are the subject of this
registration statement, which amendments may make such changes in the
registration statement as such attorney may deem appropriate. Pursuant to the
requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date
indicated.

          Signature                      Capacity                 Date
          ---------                      --------                 ----

  /s/  AUBREY K. MCCLENDON     Chief Executive Officer and    April 7, 2003
-----------------------------    Director (Principal
     Aubrey K. McClendon         Executive Officer)

      /s/  TOM L. WARD         President, Chief Operating     April 7, 2003
-----------------------------    Officer and Director
         Tom L. Ward

   /s/  MARCUS C. ROWLAND      Vice President--Finance        April 7, 2003
-----------------------------    (Principal Financial and
      Marcus C. Rowland          Accounting Officer)

                                     II-13

<PAGE>

                                  SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933, each Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Oklahoma City, State of
Oklahoma on April 7, 2003.

                                           CHESAPEAKE EXPLORATION LIMITED
                                             PARTNERSHIP
                                           CHESAPEAKE LOUISIANA, L.P.
                                           CHESAPEAKE PANHANDLE LIMITED
                                             PARTNERSHIP
                                           CHESAPEAKE-STAGHORN ACQUISITION L.P.
                                           CHESAPEAKE SIGMA, L.P.

                                           By Chesapeake Operating, Inc., as
                                             general partner of each respective
                                             entity

                                           By:    /s/  AUBREY K. MCCLENDON
                                                  -----------------------------
                                           Name:  Aubrey K. McClendon
                                           Title: Chief Executive Officer

   Each person whose signature appears below authorizes Aubrey K. McClendon and
Marcus C. Rowland, and each of them, each of whom may act without joinder of
the other, to execute in the name of each such person who is then an officer or
director of the company and to file any amendments to this registration
statement necessary or advisable to enable the company to comply with the
Securities Act of 1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof, in connection
with the registration of the securities which are the subject of this
registration statement, which amendments may make such changes in the
registration statement as such attorney may deem appropriate. Pursuant to the
requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date
indicated.

          Signature                      Capacity                 Date
          ---------                      --------                 ----

  /s/  AUBREY K. MCCLENDON     Chief Executive Officer and    April 7, 2003
-----------------------------    Director of Chesapeake
     Aubrey K. McClendon         Operating, Inc. (Principal
                                 Executive Officer)

      /s/  TOM L. WARD         President, Chief Operating     April 7, 2003
-----------------------------    Officer and Director of
         Tom L. Ward             Chesapeake Operating, Inc.

   /s/  MARCUS C. ROWLAND      Executive Vice                 April 7, 2003
-----------------------------    President--Finance and
      Marcus C. Rowland          Chief Financial Officer of
                                 Chesapeake Operating, Inc.
                                 (Principal Financial and
                                 Accounting Officer)

                                     II-14