Good day, everyone, and welcome to the Chesapeake Energy Corporation Fourth Quarter 2016 Conference Call. Today's conference is being recorded. At this time I'd like to turn the call to Mr. Brad Sylvester. Please go ahead, sir.

Good morning everyone, and thank you for joining our call today to discuss Chesapeake's financial and operational results for the 2016 fourth quarter and full year. Hopefully you've had a chance to review our press release and the updated investor presentation that we posted to our website this morning. During this morning's call we will be making forward-looking statements, which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs, goals, expectations, forecasts, projections, and future performance, and the assumptions underlying such statements. Please note that there are a number of factors that will cause actual results to differ materially from our forward-looking statements, including the factors identified and discussed in our earnings release today and in other SEC filings. Please recognize that except as required by applicable law, we undertake no duty to update any forward-looking statements and you should not place undue reliance on such statements. We also may refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers. For any non-GAAP measures we use, a reconciliation to the nearest corresponding GAAP measure may be found on our website and in our earnings release. With me on the call today are Doug Lawler, Nick Dell'Osso, Frank Patterson, and Jason Pigott. Doug will begin the call and then turn the call over to Nick for a review of our financial results before we turn the teleconference over for Q&A. So with that, thank you. And I will now turn the teleconference over to Doug.

Thank you, Brad, and good morning. 2016 was a year of significant progress and substantial achievements for Chesapeake Energy. We are stronger today than any other time in our history. Looking back across this challenging period of low commodity prices, we've successfully delivered on our strategy to de-lever, de-risk, and simplify our balance sheet, while driving improved capital and operating efficiencies and also driving the industry-leading low production cost. The company is positioned to differentially perform through further debt reduction and development of our high quality asset portfolio in the coming years. The most significant accomplishment for 2016 included successful liability management initiatives that resulted in reduced debt, refinance near-term maturities, and restoring a reasonable cost of capital. Other major accomplishments included, one, divesting the Barnett asset, eliminating an annual negative impact of $200 million to $300 million in EBITDA, principally due to MVC payments and burdensome gathering and firm transportation agreements associated with the asset; two, renegotiating midstream contracts including new gathering agreements in the Powder River Basin and Mid-Continent assets; three, divesting of more than $2 billion in non-core non-operated and/or low EBITDA generating assets; four, significantly improving capital efficiency with new technology, better engineering, and greater recoveries, resulting in higher quality, more efficient well economics; and five, reassessing our entire portfolio and confirming the long-term economic strength of our assets. We have previously shared the strength of our portfolio, consisting of 11.3 billion barrels of net recoverable resources, 5,600 locations with an internal rate of return of greater than 40%, and a projected growth rate of 5% to 15% annually through 2020 at normalized flat pricing of $3 per mcf and $60 per barrel of oil. We crushed our cash costs in 2016. We reduced our total production expenses by approximately $336 million or 28% per barrel…

Thank you, sir. At this time we'll start our question and answer session. And we'll take our first question from Neal Dingmann with SunTrust.

Morning, gentlemen. Say, two questions. First, Doug, for you or Nick, I just saw – just something was reported on this expected – on the material weakness internal controls. Anything you can just suggest? Anything you're worried about to that come up on the 10-K? Domenic J. Dell’Osso - Chesapeake Energy Corp.: Yeah. Happy to answer that, Neal. So this was an oil basis pricing differential calculation in one region for a discrete period of time. It has nothing to do with our reserves engineering and is isolated to that one regional oil price calculation. The impact to our financial statements was not material and is laid out in a table in the 8-K.

Okay, perfect. Thanks, Nick. Great to hear on that. And then, Doug, looking at the Analyst Day kind of how you laid out the rig scenario for this year and then just on the most recent slides. Looks like everything is pretty close to the same just one in – maybe in two areas. One, Mid-Con, you talk about four currently running. And I think during the Analyst Day you talked about potentially one to two in Oswego and three to 10 in the Miss and the Wedge. And then over in the Marcellus I noticed you currently don't have any running. And I think at the time you were mentioning potentially zero to two there. So maybe if you could just address those two areas?

Sure, Neal, I'll comment. And Frank may want to chime in as well. Basically that as we look at the year and the capital expenditure program that we've laid out, there's a significant amount of flexibility that we built in based on taking advantage of either pricing, opportunistically looking at where we are testing new things, where we can drive the greatest value. There's not anything significant to take from that. It's just a normal shifting around of the program to optimize the best economics at the current time. Frank, do you want to share anything else you want?

Sure. Neal, if you'll recall, we talked about in the Marcellus and the Utica, we've combined that into one business unit. And the driver there was not to make a massive business unit, but to allow a lot better rig sharing. So when you look at the Marcellus and the Utica, you need to look at it as a combined venture as far as drilling and completion. So we're moving rigs back and forth between those, depending on what wells we need to drill and what wells we need to complete. And it really creates a lot of efficiency for us in kind of a regional area. In the Mid-Con, what we're looking at is we have two rigs running in the Oswego right now. The cycle times are really impressive there, the wells are performing great. The Wedge play, it is evolving. And as we get more and more data, we'll start to look at, do we ramp up? How do we manage that program forward? So where we are today on the slide you'll see in the deck is kind of a static position. And as we get more data we'll make that call.

Very good. Congrats, Doug, great turnaround.

Thanks, Neal.

And we'll take our next question from Brian Singer with Goldman Sachs. Brian Singer - Goldman Sachs & Co.: Thank you, good morning.

Morning. Brian Singer - Goldman Sachs & Co.: One of the areas you highlighted at the Analyst Meeting for focus was the Powder River Basin. And wanted to just see if you could give us an update there? And the acceleration and how that translates into production and knowledge on the play?

You want to – hey, Brian, this is Frank Patterson. Since the time of the Analyst Meeting, we talked about putting a rig in play in November. We've done that. As we started to review our opportunity set and the potential in the Powder, we made the election before the end of the year to move in a second rig. That's just going to be basically Sussex-focused. So where we are in the basin today is we are completing and drilling – actually drilling out our first Turner test now. So that will be online in the near future. We've drilled a Parkman test on the same pad. I will be online in the near future. We've gone in with a completion crew and begun completing DUCs, so our production volumes are turning around now. And then the Sussex rig, the second rig was in the field and spud the first – on the first Sussex pad the first week of February. Brian Singer - Goldman Sachs & Co.: Great. Thanks. And my follow-up is on natural gas prices. Given the whipsaw that we've seen in the – at least for now, warm recent weather, just wanted to get a sense as to how the natural gas price environment impacts your capital allocation and capital plans if at all for the year?

So, Brian, as Nick noted, the hedging position we have for the year is quite good at approximately 71% at $3.07 per mcf. So it doesn't materially impact the program for 2017, the volatility that we're presently seeing. Keep in mind though that the flexibility of the company today is much improved. And where we sit with as we look forward to that capital deployment and the long-term pricing forecast, we can make adjustments in the program based on that volatility if we deem it appropriate and in the best interest of our shareholders to do so. So I think that as you see continuing weakening in pricing, we'll adjust our capital program and redirect it at other opportunities in the portfolio. And the great thing about the company is the strength and resiliency of the portfolio. We can shift rigs around and drive greater value from other areas if the pricing conditions dictate. Brian Singer - Goldman Sachs & Co.: Thanks. And what just – on a follow up to that. What gas price if you – would you believe it – would you have to believe in for 2018 to either increase or decrease activity in Haynesville Shale relative to where you're at right now?

Well, we haven't set an exact price. As we've shared in the past, we have excellent breakeven economics in the Haynesville. And they continue to get better with the improved capital efficiencies that we've recognized. I think that in the – basically in the $2.50 to $3.50 range is where we anticipate gas to move with the seasonality. And if you saw it dip below $2.50 for an extended period of time, we would probably start making adjustments. But we're – we haven't really said at a specific price we would move or adjust that. But the key is, as you know, we're focused on driving the greatest value where we can capture the greatest returns. And we'll make those changes immediately, as we deem appropriate that we can drive value from another area. Brian Singer - Goldman Sachs & Co.: Thank you very much.

Thanks, Brian.

And we'll take our next question from Jacob Gomolinski-Ekel. Please go ahead from Morgan Stanley.

Morning, guys.

Morning. Domenic J. Dell’Osso - Chesapeake Energy Corp.: Morning.

Hey, just had a question on the – it looked like there was $205 million of cash spent on acquisitions in the quarter, which included capitalized interest of $56 million. So just curious if you had any additional details on the $149 million of acquisitions in the fourth quarter? Domenic J. Dell’Osso - Chesapeake Energy Corp.: Yeah. So during the fourth quarter we exited our Devonian Shale position. And associated with that exit, we repurchased a VPP. That ends up getting booked as an acquisition to repurchase the VPP. Those assets then move off with the acquisition. So we had noted at the time that we said we were going to divest of the acquisition. That it would be a nominal net amount of proceeds to the company. And that's where it came out. We had a nominal amount of proceeds that came in after repurchasing the VPP.

Okay, got it. And then I don't know if you had any color on the outlook for that, for acquisitions in 2017? Domenic J. Dell’Osso - Chesapeake Energy Corp.: No. No specific plans for acquisitions in 2017. As I'm sure everyone is aware, there are a ton of opportunities out there to look at. And we have a very active and well-functioning business development team that works with our business units to look at opportunities in areas where we think we have good operating synergies, we have good geologic knowledge, and we have an ability to add value to things that we would purchase. That's always put through a lens of the purchase price and the opportunity relative to the set we have in front of us today, which is a significant drilling inventory at a high rate of return.

Right. Domenic J. Dell’Osso - Chesapeake Energy Corp.: As we've highlighted for everyone before. So we are very active in looking at things that come across. And we're pretty tough judges of what meets the bar that we would consider moving on. And we'll continue to do that. If we move on something, know that it would be something that we really felt was impactful to our portfolio, and we thought we could generate great returns on. We've got so much in front of us today that that's a very high bar.

Got it. And then just a follow-up if I may in terms of the – into the flip side of that question I guess. You mentioned in the release additional asset divestitures. And just wanted to see if you might be able to provide any additional details around size and scale? Or perhaps which specific assets might qualify? Domenic J. Dell’Osso - Chesapeake Energy Corp.: We've stayed away from giving any specific color for the calendar year 2017, other than to note that it's important to the company to make progress towards our goal of debt reduction. It's important to the company to make progress towards right-sizing our oil and gas portfolio. And we'll make progress on that this year. Exactly how much, when, what assets, we're going to stay away from, as it's market dependent on so many fronts. We're working a number of things today. And you can expect that we'll continue to progress that. But in terms of a specific point of guidance, we're going to continue to just point to the multi-year goal of $2 billion to $3 billion of debt reduction.

Got it. Thanks very much.

And we'll take our next question from Biju Perincheril with Susquehanna.

Hi, good morning. Just a couple of questions on the Powder River Basin. Doug, I was wondering at the Analyst Day you highlighted one well, I think it was the Barton well. And I was wondering the well that you recently brought online, how are the completions? How similar the completions were to that Barton well?

Biju, this is Frank Patterson. Two things. One the Barton well was a longer lateral. It was the longest Niobrara lateral we had drilled. And it was the largest completion. We had several Niobrara DUCs available to us. And so when we went back into the field, the completions team took a look at the completion design on that Nio well that was the Barton, which is basically the best Nio well in the country from a cumulative basis. The new wells have received the larger frac. They're not extended laterals, so they didn't perform as -quite as well as the Barton. But the initial well that we brought on is still making about 1,230 barrels of oil a day. 60% – or boe a day. 60% of that's oil after almost 30 days of online. So that we are seeing a response that is very positive. So now we're going to move, as we go into a new Nio program down the road, we will be putting longer laterals and larger fracs on those Nio wells and expect to have a good success.

Thanks. And then that recent well looks like it's sort of within your, I guess gas condensate window there. Given that was 60%, 70% oil, does your view of what the gas condensate window is, does that change at all? Or...

No. That well actually, it's performing on a cut basis as far as oil pretty much as expected. What it did do is it also validated the spacing assumptions that we're going with now with a little bit further spacing between wells. Gives you a lot higher sustained pressure and lot higher deliverability at the wellbore. So everything we told you at the Analyst Day seems to be playing out pretty well. And we'll have a lot more data as we move down the road. The completions team and the drilling team are really focused on this. And I think we're going to do a really good job and deliver what we said at Analyst Day.

Great. Thank you.

That does conclude our question and answer session. At this time I'd like to turn the call back over to Mr. Lawler for any additional or concluding remarks.

Great, thank you. We appreciate everyone joining us today. 2016 was a great year for Chesapeake. And we look forward to building upon that. And what you can expect is continued improved performance across all aspects of our business. And we look forward to sharing that with you in the coming months. And we appreciate again you joining us for the call. Thank you.

And again that does conclude today's conference. Thank you for your participation. You may now disconnect.