1


                                         Filed by: Chesapeake Energy Corporation
                                          Pursuant to Rule 425 of the Securities
                                                         Act of 1933, as amended

                                      Subject Company: Gothic Energy Corporation
                                                    Commission File No.: 0-19753

Chesapeake Energy Corporation and Gothic Energy Corporation have filed a
preliminary and definitive prospectus/proxy statement and other relevant
documents concerning the proposed transaction referenced in the following
information with the Securities and Exchange Commission on Form S-4 (file no.
333-47330). We urge investors to carefully read the definitive prospectus/proxy
statement, and any other relevant documents filed with the SEC, because they
will contain important information. The prospectus/proxy statement will be sent
to stockholders of Gothic Energy Corporation seeking their approval of the
proposed transaction. Investors may obtain free of charge a copy of the
definitive prospectus/proxy and other documents filed by Chesapeake Energy
Corporation and Gothic Energy Corporation with the SEC at the SEC's web site,
www.sec.gov. In addition, documents filed with the SEC by Chesapeake Energy
Corporation will be available free of charge upon written request to Chesapeake
Energy Corporation, 6100 North Western Avenue, Oklahoma City, Oklahoma 73118,
Attention: Marcus C. Rowland, or call us at (405) 848-8000. Documents filed with
the SEC by Gothic Energy Corporation will be available free of charge from
Gothic Energy Corporation, 6120 South Yale Avenue, Suite 1200, Tulsa, Oklahoma
74136.


                                CHESAPEAKE ENERGY

                           MODERATOR: AUBREY MCCLENDON
                                OCTOBER 27, 2000
                                   8:00 AM CT



Operator: Good day everyone and welcome to this Chesapeake Energy Third Quarter
     Earnings conference call. Today's call is being recorded. At this time
     for opening remarks and introductions, I would like to turn things over
     to Mr. Aubrey McClendon. Please go ahead, sir.

Aubrey McClendon: Good morning and thanks for joining Chesapeake's Third
     Quarter Earnings Release conference call. Before we begin, I need to
     provide you with some disclosure concerning the forward-looking
     statements that we will make during the course of this call.

                                        1

   2

     These forward-looking statements that describe our beliefs, goals,
     expectations, projections, or assumptions are considered
     forward-looking. Please note that the company's actual results may
     differ from those contained in such forward-looking statements.
     Additional information concerning these statements is available in the
     company's SEC filings.

     Today we'll begin with Marc's financial analysis and then I'll provide
     an operations and strategy review and then we'll go to Q&A. Our
     prepared commentary will last about 15 minutes.

Marcus Rowland: Good morning. We feel like we've had an outstanding quarter.
     The last quarter of significant gas hedges which reduced our
     performance by nearly $12 million in the quarter ended, has now ended.
     Our performance has hit consensus despite a non-cash charge to earnings
     of $5.3 million, or nearly 4 cents a share, related to our preferred
     stock exchange program.

     Cash flow from operations of $83 million was a new record for
     Chesapeake and a run-rate of over a third of a billion dollars per year
     or nearly $2 per share on a fully diluted basis.

     While we're really enthused by our operating and financial performance,
     we're much less enthused by our common stock market performance
     recently. We believe that there are several contributing factors to
     this most of which should be over shortly.

     These include the shares issued in connection with our preferred stock
     exchange program which is now over 43 million common shares for the
     year, shares issued in connection with the Gothic transaction that's
     pending, 13.5 million shares for which we are now booking no benefit,
     including booking no benefit for accrued interest on the notes we've
     acquired.



                                        2
   3

     And of course the length of time, while not unexpected in completing
     our Gothic merger, we think has added some confusion in the market. Let
     me turn and give some detail on each one of these items.

     Our preferred stock exchange program which we began in January of this
     year booked 933,000 shares of preferred stock exchanged this quarter
     for a total of $47 million of face value reduction in fixed
     obligations. During the quarter, we issued 9.2 million shares of common
     stock at an average price of about $5.75 per share.

     This reduces our preferred stock outstanding today to 624,000 shares or
     only $31 million of fixed obligation compared to the $230 million that
     we began the year with, a reduction so far this year of over $200
     million.

     Our performance has allowed us to once again return to paying our
     preferred dividends which we declared in October including all of the
     arrearages. That was for $7.44 per share and amounts to $4.6 million of
     dividends that will be paid November 1st.

     Our intent remains to call the preferred at first call, May 1st of
     2001. We have the option of either buying that for cash, cash and
     common stock, or totally in common stock.

     Now let's turn to the Gothic transaction for an update. The Securities
     and Exchange Commission has indicated no review of our pending S-4 or
     proxy material. We believe that the registration statement will be
     declared effective on November 1st which will result in a mailing at
     the end of next week to all of the Gothic shareholders of the proxy
     material.

     Gothic shareholder vote has been established for December 12th, 2000,
     and the merger is expected to occur no later than January 15th of the
     following month and could occur in December.

                                        3
   4

     Chesapeake has issued significant stock to date in the Gothic
     transaction. We've issued approximately 13.5 million shares for the
     Gothic Discount and Senior Notes. To date, we've acquired $20 million
     of the Senior Notes and virtually 100% of the Discount Notes. I'd like
     to highlight that in the first series of transactions, we issued 9.5
     million shares for the largest portion of the Discount Notes at an
     average price at the time of $5.82 per share.

     We concluded a transaction that allowed us to take advantage of the
     upside that we thought the stock could have. And that upside now has
     resulted in the trade recouping $6.1 million in cash and nearly one
     million shares that have been returned to us, for a total value of $13
     million. This will be booked as a reduction of the Gothic acquisition
     price at the time of the merger.

     Let me turn to some capital expenditure highlights for the quarter, in
     addition to of course reducing the debt by exchanging stock for $47
     million of preferred. We reduced our bank debt by $10 million during
     the quarter. During the quarter, we closed on $11.4 million of
     acquisitions, bringing our total acquisitions so far this year through
     September 30th to $35 million. We've acquired approximately 50 Bcf
     equivalent for an all in cost of approximately 70 cents per Mcf
     equivalent.

     During this quarter, we spent just over $46 million in total field
     capital expenditures including $4 million of G&G expense and $1.5
     million of capitalized G&A relating to our drilling program.

     Currently, our bank debt is $54 million with cash on our balance sheet
     today of $32 million for net debt of $22 million. That's down
     significantly from the beginning of the quarter which was $46 million
     in net debt at that time.

     I'd like to review with you our debt reduction program so far in 2000
     in addition to the preferred stock program and reducing our bank debt.
     Obviously, we are focused on reducing the total




                                        4
   5

     obligations in connection with Gothic as well. We began the year with
     over $1 of fixed obligations per Mcf equivalent. Now, and pro forma
     for Gothic, we'll be around 75 cents per Mcf equivalent. And as we
     move into 2001, we feel strongly that we can achieve our goal of
     reducing our total obligations to only 50 cents per Mcf equivalent. We
     think this significant balance sheet improvement will be welcome news
     to all of the shareholders and stakeholders of Chesapeake. Aubrey...

Aubrey McClendon: Thank you, Marc. Obviously, our financial performance during
     the third quarter was very strong. However, we are equally pleased with
     our operational performance. Compared to last year's third quarter, our
     gas production was up 6.3% this quarter even after losing 900 million
     cubic feet of gas to unexpectedly long Canadian gas plant turnarounds.
     If not for the Canadian shortfall, our gas production would have been
     up 10% year over year. This quarter's operational performance continues
     a trend that we established in the fourth quarter of '98 which was our
     low water gas production mark of the past three years.

     During the past seven quarters since the fourth quarter of '98, we have
     increased our gas production by 15%. We believe this is a very
     significant achievement against a backdrop of generally declining
     production industry wide. I might also add that 86% of this quarter's
     total production was natural gas and pro forma for Gothic, our
     production was almost 90% natural gas. We believe this very high
     percentage makes Chesapeake one of the purest natural gas plays in the
     business.

     Looking forward, our next big production increase will come from Gothic
     in next year's first quarter. Gothic's production levels are currently
     running around 80 million cubic feet of gas equivalent per day, and 98%
     of which is natural gas.

     As for our drilling activity, during the first three quarters of 2000,
     we used an average of 10 to 12 rigs to execute our drilling program.
     Today we're up to 18 rigs and by the end of the year, we



                                        5
   6

     should be at 20 rigs. As a result, we believe that 2001 should be a
     terrific year of production growth for us, up at least 25% from year
     2000 levels.

     While we're discussing production, I'd like to add a comment about what
     we did to strengthen the operational foundation of the company during
     the tough times of '98 and '99. While many other companies reacted to
     the low prices by laying off technical talent, Chesapeake did the
     opposite. Since the end of 1998, we have increased our geotechnical
     staff by 50% and today we have close to 30 geologists and geophysicists
     working our core areas. In addition, our engineering staff has
     increased by a similar percentage. Furthermore, during 2000, we have
     averaged about 70 landmen out in the field every day buying leases. Our
     undeveloped leasehold inventory now amounts to over two million acres
     on which we have identified an inventory of over five years of drilling
     activity.

     An important factor in adding value to this acreage inventory is our
     extensive 3D and 2D seismic library which we believe gives us the most
     comprehensive seismic coverage of the Mid-Continent in the industry.
     I'd like to point out that during this period of growth, our G&A costs
     of 10 cents per Mcfe have continued to be among the industry's lowest.

     As most of you know, Chesapeake's management has been very confident
     about the underlying supply and demand fundamentals of natural gas
     since we initiated our strategic transformation in 1997. As gas prices
     have outperformed even our bullish expectations of several years ago,
     our business strategy has remained clear and consistent: we strive to
     be the best in the business at finding gas in the Mid-Continent region.
     As most of you know, the Mid-Continent is the third largest
     gas-producing basin in the US. And in this basin, Chesapeake has carved
     out a solidly profitable position as the third largest producer and the
     most active driller during the past ten years. In addition to the
     Mid-Continent, we believe we can be the best in three smaller areas as
     well: the Deep Giddings field in Texas, the Lovington area in southeast
     New Mexico and the Helmet area in northeastern British Columbia,
     Canada.



                                        6
   7

     In 2001, we expect to accelerate this year's operating momentum. Our
     drilling land and seismic budget will grow from $155 million to $220
     million. From this increased budget, we expect to deliver exploration
     successes from a number of important projects. For example, in eastern
     Oklahoma's Arkoma Basin. We have three new gas plays ranging from
     16,000 foot thrusted prospects all the way to 2,500 foot coalbed wells
     in our joint venture with El Paso. And in the Anadarko Basin of western
     Oklahoma, we believe exploration success will continue in our Bradley,
     Knox, Chitwood, Cement and Watonga-Chickasha fields.

     These are fields that collectively have produced more than 12 trillion
     cubic feet of gas equivalent and where we believe at least another
     trillion cubic feet of gas can be found.

     Further west, we have one of the most active drilling programs in the
     deep portion of the Anadarko Basin. In the Mountain Front project
     alone, we have acquired an interest in over 100 sections of land that
     we believe are prospective for Granite Wash or Springer objectives. It
     is one of the hottest plays in the industry today.

     In addition, you are likely to hear exciting news from us about the
     rejuvenation of drilling activity in the Deep Giddings area as
     formations deeper than the Chalk are developed with horizontal
     drilling. Furthermore, we expect that southeast New Mexico will also be
     an area of substantial asset growth for us in 2001.

     In each of Chesapeake's core operating areas, we believe the
     combination of our operating scale, geological expertise, and large
     land and seismic inventories provide Chesapeake with significant
     competitive advantages. Advantages that should enable us to continue
     creating significant value through our drilling and acquisition
     programs in the years ahead.


                                        7
   8

     Chesapeake's operating strength should also be obvious to you through
     the quality of our cost structure. We believe that our cash costs,
     which consist of 10 cents per Mcfe for G&A, 35 cents for lifting
     expenses, and 18 cents for production taxes, are the lowest of the 30
     companies we benchmark ourselves against in the mid-cap and large-cap
     independent producer universe. We believe these numbers reflect a high
     degree of asset quality and also a management team that is very focused
     on controlling costs.

     I'd like to next discuss production replacement efficiency. Last year
     you may remember that we replaced our production by 187% at a 65 cent
     per Mcfe cost. During the first nine months of this year, we have more
     than kept pace with last year's success, replacing our production by
     215% at a cost of only 72 cents per Mcfe.

     And if Gothic reserves are rolled in by the end of the year, we believe
     our overall finding costs for 2000 will be about a dollar per Mcfe for
     reserve replacement exceeding 400%. We believe this will prove to be
     one of the better performances in the industry this year.

     In closing, I'd like to reiterate our single-minded focus on enhancing
     shareholder value. As owners with our directors of almost 20% of
     Chesapeake's equity, management believes we can best accomplish our
     value-creation goals by continuing to grow our high quality natural gas
     reserves and by following our often stated goal of reducing debt per
     Mcfe of proved reserves to 50 cents per Mcfe. We intend to accomplish
     this goal within the next two years through both asset growth and debt
     reduction. We believe our successful execution of this strategy will
     lead to continuing and significant increases in shareholder value in
     the quarters ahead.

     Before we move on to Q&A, I'd like to anticipate questions you may have
     had about Tom Ward and me selling some stock during the past several
     quarters. To begin with, Tom and I own about 26 million shares and
     option shares of Chesapeake. As many of you may recall, we bought about
     $35 million of stock at $20 a share in early 1997. During the past
     three years, we have


                                        8
   9

     reduced the debt associated with this purchase by almost 80% during
     some pretty challenging times.

     Our plan is to continue selling very small percentages of our personal
     holdings during each of the next five quarters so that by the end of
     2001, we expect to be personally debt free. And as previously
     discussed, we expect the company's debt burden to be much lighter by
     then as well.

     I can assure you that Tom and I see much greater percentage upside in
     Chesapeake's stock price than we see in any other energy stock. And we
     are very proud to be Chesapeake's largest equity owners.

     Now we'd like to go ahead and move to Q&A.

Operator: Thank you. Today's question and answer session will be conducted
     electronically. If you would like to ask a question today, please press
     star one on your telephone. We will take as many questions as time
     permits and we will proceed in the order that you signal us. Once again
     to ask a question, please press star one. And we'll pause for just a
     moment to assemble our roster.

     And we'll go first to Adam Leight at DLJ.

Adam Leight: Good morning.

Aubrey McClendon: Good morning, Adam.

Adam Leight: A couple of questions - on the reserves that you talk about in
     your press release, first of all, can you give us some idea of how
     price sensitive the volume numbers are there, you know, if we were
     looking at today's strip, what kind of volumes we're talking about?



                                        9
   10

     And then I guess more importantly, for the fourth quarter, you know,
     you're planned activity, what would you be expecting in terms of
     additional - or just ballpark reserve adds? And what's in the numbers
     for coalbed methane, if anything?

Aubrey McClendon: Okay. First of all, our reserves are not very sensitive to
     changes in gas prices because our operating costs are low. So you don't
     get a lot of economic truncation when gas prices are low. And also you
     don't get a lot of reserve expansion when gas prices move higher.

     At the end of the third quarter, we were at 1,325 Bcfe before Gothic.
     That is above what our end-of-the-year goal was that we started the
     year with, which was to be at 1,300 Bcfe. Based on what we see out
     there, I suspect we could hope to be as high as 1,350 Bcfe by the end
     of the year and of course, adding Gothic would give us another 310
     Bcfe. So I think we could be as high as 1660 Bcfe.

     There are no reserves booked for coalbed methane at this point.

Adam Leight: Great - second question. On your strategy for drilling rigs?

Aubrey McClendon: Yes.

Adam Leight: What kind of equipment did you buy, you know, what do you need for
     your drilling programs? And what are you looking to do there going
     forward? Are you going to be adding more rigs, entering alliances,
     or what's the program?

Aubrey McClendon: The program is a modest one at this point. We have 50%
     interest in five rigs and we are in the process of refurbishing those
     with our partner, a local businessman in Oklahoma City. At this point,
     we are taking it one step at a time and just working on these five



                                       10

   11

     rigs. And we'll address what to do later with additions. We do have an
     option on an additional six rigs that, if we decide to move forward on
     a bigger scale, we do have that option built in.

Adam Leight: Can you tell me what type of equipment you purchased? Are these
     styles...

Aubrey McClendon: Adam, they range from 750 horsepower to 1,000 horsepower.
     And depth capability is 8,500 feet to 18,000 feet, which pretty much
     covers the spectrum of our drilling needs in the Mid-Continent. The
     goal is for those five rigs to be working for us.

Adam Leight: Am I correct in the numbers that these are costing you to acquire
     and refurbish, about $3 million a piece? Is that...?

Aubrey McClendon: Yes, that's exactly right.

Adam Leight: Okay. Thanks very much.

Aubrey McClendon: Thanks, Adam.

Operator: Mr. Smith, you're line is open if you do have a question?

Stephen Smith: Oh, yes. Good morning, Aubrey. Could you spend a little bit of
     time updating us on this coalbed methane activity?

Aubrey McClendon: I think we can and before I do that Steve, I just misspoke
     on the rigs. We do have one 2,000 horsepower rig in that fleet of five
     rigs.

     We're really just underway on the coalbed program. I believe we've
     drilled a dozen wells to date. We are in the process right now of tying
     them in to central compression and central batteries.



                                       11

   12

     And we hope to have that accomplished by mid-November. I'm also
     hopeful by the end of this year that we'll have production.

     We do have plans to drill about 100 more CBM wells between now and the
     end of 2001. So we did exercise our option to go from 25% to 33% in the
     JV and so far it's running pretty smoothly with El Paso as our partner.

Stephen Smith: With the second question - I'm beginning to hear of different
     attempts to use horizontal drilling, I guess, prompted by five-buck gas
     or just higher gas prices in general. Of course, you guys were the
     pioneers in this activity. Are you looking at any new areas where you
     could use horizontal?

Aubrey McClendon: Steve, I think that there are several places to do that. At
     first I thought your question was headed towards, are we using
     horizontal drilling in the coalbed methane joint venture? And let me
     say that some companies are. But, in that play right now all of our
     activity is vertical.

     But the most promising area for us would be obviously down in the Deep
     Giddings area. We have more than 125 horizontal wellbores in that area.
     And in that area of course, we did very well in the Chalk with average
     reserves between five to six Bcfe per well. We have ideas for other
     formations below the Chalk -- Georgetown, Glen Rose and others. And we
     do expect to be actively testing several of those formations in 2001
     and in fact, we have a rig drilling in the Georgetown as we speak.

Stephen Smith: Okay. Thank you.

Aubrey McClendon: Thank you.

                                       12

   13

Operator: And we'll move next to Barry Sahgal at Brean Murray & Company.

Barry Sahgal: Good morning, gentlemen. Really three separate questions -
     maybe I'll start with an observation though. I noticed a pretty wide
     dispersion of earnings estimates for the September quarter just
     reported and also for the December quarter. It probably doesn't reflect
     well when one sees the fact that the company has missed its earnings
     numbers there's a guy out there with a 40-cent estimate which maybe
     it's an old number, but I just make that as an observation because it
     doesn't reflect well.

     I see that your gas differential for the 2001-year is 15 cents. Would
     you care to comment on that? That seems to be relatively little
     compared with what I've seen other companies.

Marcus Rowland: Barry, this is Marc. The gas differential of 15 cents - where
     are you picking that number up from?

Barry Sahgal: Well, I'm looking at the NYMEX number that you are projecting and
     the realized price.

Aubrey McClendon: Oh Barry that's - sorry, you're getting the benefit of some
     oil there at the Btu equivalent of about $4.10. That $3.50 is for gas -
     $24.50 is the oil. And you blend them together and that's $3.35 on an
     Mcfe basis. So our gas differential is really closer to 30 to 35 cents.
     And the oil differential is about a dollar but even after subtracting
     that dollar, your per Mcfe revenue for a unit of oil production is
     close to four dollars per Mcfe.

Barry Sahgal: Okay.

Aubrey McClendon: Before you go on, let me address the earnings estimate. You
     know, it is frustrating for us, Barry, as well. We follow a lot of
     companies and during the last several years, we don't think anyone has
     given as much guidance as we have. And as you look through what




                                       13

   14

     we have provided for you, other analysts and investors today, it's
     almost inconceivable to us that people could miss our numbers because
     we basically give you everything you could possibly need to reach a
     conclusion on us.

     So it's also very, you know, it's difficult for us to tell somebody
     that they're wrong. And we have tried within the requirements of Fair
     Disclosure and other SEC Regulations to talk to people. We are
     frustrated that many analysts, once you tell them that their number may
     be wrong, and they say, yeah I'll change it. And they do change it and
     they never turn it in to First Call or Zack's. And that probably
     happens as much as anything.

     So I understand your frustration. I can assure you that our frustration
     exceeds yours particularly when we work pretty hard to tell everybody
     what we think our business is going to do. And we think our business is
     pretty predictable these days. So with that, would you go on to your
     third...?

Barry Sahgal: Yeah. I noticed that in the press release where, I must
     compliment you on the quality of disclosure, there's a lot of
     information in the operating highlights section of some fairly
     significant wells that have come in. Should I conclude that given the
     fact that you've been so successful in bringing on new production at
     very high rates that the Giddings area is seeing some fairly rapid
     production declines more than you had anticipated?

Aubrey McClendon: I would characterize two things. First of all, the Giddings
     decline curve overall has certainly been flattening over time. Most of
     those wells were drilled in '94 and '95 and so we're in the fifth and
     sixth years of consolidated decline curves. And so there's a steady
     flattening of those curves. I would also say that we've been a little
     disappointed in the last six months by our inability to hit big
     Independence wells which we had been fairly successful at hitting in
     late '99 and early 2000. But I think that's all about to change with
     the potential of the Georgetown in this area. I think we're going to be
     very successful.



                                       14

   15

     And we will move from trying to extend the Chalk in the Brenham area
     towards a program of going back in and re-entering a number of our
     Chalk wells and drilling down to the Georgetown where reserves could be
     anywhere from 2 to 5 Bcfe at a cost of about $2 million for the
     re-entry and the drilling of a horizontal lateral.

Barry Sahgal: Okay, many thanks, Aubrey and Marc.

Aubrey McClendon: Okay. Thank you, Barry.

Operator: And we'll go next to Paul Ferretti at Wasserstein Perella.

Paul Ferretti: Good morning, men.

Aubrey McClendon: Hi, Paul.

Paul Ferretti: A couple of things, if you x-out Gothic, your production
     growth for next year looks like it's a little bit below 4%, which kind
     of surprises me in light of the fact that your cap ex program is so
     much higher than this year. Maybe you could explain why.

     And then also, Marc, maybe you can give us a breakdown of the cap ex,
     how much development, how much exploration, drilling, et cetera.

Aubrey McClendon: I'll take the first part and let Marc do the second. We have
     given guidance of, by our calculation, actually a little over 4%
     production growth, if you just keep Gothic volumes flat.



                                       15

   16

     That's intentional. Obviously we want to be able to do no worse than
     our own published expectation. And so our internal goals are more
     aggressive than that. But our public guidance is for production growth
     of 4% next year.

     With Gothic being kept flat, obviously, quarter-over-quarter you're
     going to see production gains of about 25% versus 2000. Marc, do you
     want handle the second part?

Marcus Rowland: Yes. On the exploration and development split, we're looking
     for approximately 65% of our expenditures, of drill bit expenditures,
     to be developmental in nature -- that would either be proved
     undeveloped or what we would consider one-well step-outs, whether
     classified as proved undeveloped at the time the drill bit hit the
     ground or not -- 35% exploration.

     We comment that generally on our exploration budget, Paul, we do not
     budget for much, if any, exploration success. So when we're out
     drilling a wildcat well in the Mountain Front Range, we're looking sort
     of for developmental kind of economics there from a production
     standpoint risk-adjusted, versus any kind of big exploration success.

Paul Ferretti: All right.

Marcus Rowland: But the breakdown is 65/35 for next year.

Paul Ferretti: Thank you.

Operator: And we'll now go to Tom Parker at Chase Securities.

Tom Parker: Hi. In terms of the cap ex for this year, if I'm calculating this
     right, you've spent about $125 million to date on drilling. And you're
     saying $155 million. Although it sounds like you've




                                       16

   17

     got a lot more rigs going. Is there a possibility that number gets
     higher? And also, what's your thoughts on fourth quarter acquisitions?

Marcus Rowland: I think that on the acquisition side, apart from Gothic, in
     the fourth quarter, that we'll be pursuing our wellbore acquisition
     program at about the same pace, which has generally been $50 million
     per year.

     We've spent $39 million, as mentioned, to date. We have $7 million of
     transactions that have or will close here shortly. So I'd expect $11 to
     $15 million during the fourth quarter in that part, so $50 to $55
     million of acquisition, apart from Gothic.

Aubrey McClendon: On the drilling cap ex side, Tom, we've done about -
     actually by our calculations, about $113 million of cap ex. And that
     will be added - we'll add about $40 million to that in the fourth
     quarter. And that actually will be right about the same amount as we
     spent in the third quarter, most of it is just timing differentials.

     And so when you look at this going forward, a lot of the rig activity
     that we have now won't actually end up hitting until 2001. And there we
     expect to accelerate into a $220 million program.

Tom Parker: Oh okay. Can you give us the production by area?

Marcus Rowland: Sure, I will be happy to do that as I flip to my schedule that
     has that.

     This is third quarter, July through September. Our Mid-Continent
     production - I will break it out for you in oil and gas and then Mcf
     equivalents. The oil component for the quarter: 294,000 barrels in the
     Mid-Continent or 39%, the Gulf Coast was 228,000 or 30%, and all other
     areas, 239,000 barrels for 31%.



                                       17

   18

     Gas volumes, just over 18 Bcf or 63% from the Mid-Continent, the Gulf
     Coast, which includes all of Texas and Louisiana and that area, 7.6 Bcf
     for only 26%, Canada was 2.6 Bcf for just over 9%. And the all other
     category makes up the balance of about .6 Bcf.

Tom Parker: Okay. And then how much - in terms of the acquisitions you've done
     to date, how much production has that added?

Marcus Rowland: I don't have the number right off the tip of my tongue, Tom.
     But I would estimate that the R/P from those acquisitions has been
     about ten to one. And so if we've acquired 50 Bcf on an annual run-rate
     basis, we would look for 4-1/2 or 5 Bcf. But obviously you've only got
     partial year contribution, so on a weighted basis through the year, 2
     Bcf at most...

Tom Parker: Okay.

Marcus Rowland: ...equivalent.

Tom Parker: Okay. Thank you very much.

Marcus Rowland: You're welcome.

Aubrey McClendon: Thank you, Tom.

Operator: And we'll move now to Jamie Michaels at Bear Stearns.

Gary Stromberg: Hi. It's actually Gary Stromberg. A couple of questions, a lot
     of them have been answered. Back to 2001 capital spending split 65/35
     development/exploration, can you give us some breakdown or sense of
     regions -- Arkoma, Anadarko, CBM?



                                       18

   19

Marcus Rowland: Sure. We generally have it broken down into the four major
     operating areas, which would be Canada, and our capital expenditure
     program there will be about $15 million US, which is the winter drill
     program starting in December and ending by April.

     The Mid-Continent program, which would be the Anadarko and all of the
     coalbed methane project that you mentioned as well, we will be looking
     to spend about 65% of our total cap ex there, which will include most
     of the G&G work that we do and acreage acquisition.

     Coalbed methane by itself is a relatively insignificant amount of our
     total expenditures because of the relatively small cost and the 1/3
     ownership that we have in the program. So it's not a big factor.

     Moving down into the Texas Gulf Coast region, we will be spending
     approximately $15 million there as well, as currently budgeted. Aubrey
     mentioned that we are drilling one very key well for us that, if it
     kicks off successfully, we could expand the budget there during the
     year because of our large leasehold position.

     And then the balance of our budget will be allocated between the
     Williston, Lovington, and primarily non-operated Louisiana areas.

Gary Stromberg: Okay. Thanks. One more question, the closing of the Gothic
     merger, what would cause that to close in December rather than
     January? I mean, what's the process there?

Marcus Rowland: The process is first that the shareholder vote has to be
     accomplished. Secondly, there are some intricacies with regard to the
     Gothic indentures.



                                       19

   20

     And basically it's a function of how much Gothic debt is outstanding to
     meet some key indenture tests that will be met as of December 31 based
     on current EBITDA, but are not currently met as of September 30.

     However, we're in the process of negotiating some debt repurchase. As
     we've mentioned, we've already accomplished $20 million of that. And if
     successful, we could accelerate the closing.

Gary Stromberg: Okay. Thanks a lot.

Operator: And we'll go next to Jeff Gendell at Tontine Partners.

Jeff Gendell: Hey, Aubrey, how are you?

Aubrey McClendon: Good, Jeff.

Jeff Gendell: I'm going to ask a real dumb question. But it makes things a lot
     easier.

     Marc, can you just walk through the end of the year, you know, assuming
     that the fourth quarter is basically equal to the first - the third
     quarter, and throwing in Gothic on a pro forma basis, and throwing in
     what is a reasonable level of deferred tax assets, what your cash, bank
     debt, debt, equity, and shares outstanding will be?

     And just be reasonable. You know, we don't have to have the exact
     number.

Marcus Rowland: Okay Jeff.

Jeff Gendell: I will give you the disclosure language. Things might change.



                                       20

   21

Marcus Rowland: Well one thing we know is, things will change. I think I can
     answer that question. And I'm going to approach it like this.

     I see our bank debt by the end of the year, all other things being
     equal -- i.e. no surprise acquisitions, if you will, falling in on us
     -- as being basically zero. I would pro forma Gothic's debt, if closed
     at December 31, at zero as well from a bank debt standpoint.

     Cash - you know, to answer that question, we normally run between $20
     and $35 million of operating cash and today have about $33 million. So
     I don't really see that changing materially, i.e. our operating cash
     flow in excess of our cash will be going to reduce our bank debt and
     not building up cash balances.

     Today we have $920 million of obligations outstanding. I don't see that
     changing between now and the end of the year. That's our publicly
     traded debt. Gothic currently has $210 million - or $215 million of
     publicly traded debt outstanding. If anything were to change in that
     area, it would be an acquisition for either stock or cash. And so that
     would be the one caveat that I'd have. To the extent that we use cash
     to purchase any of that debt, Gothic's pro forma debt would go down,
     and our bank debt would go up. To the extent we use common stock, their
     debt would go down, and our shares outstanding would go up. We do not
     have any trades pending at this time.

     With respect to our preferred stock, 31 million shares, with the
     dividends being paid, I don't see that really - that's $31 million, I
     don't see that changing really between now and the end of the year. I
     think most of the folks that have called in and talked to us are happy
     to hold the preferred stock at this point for the dividends that they
     anticipate will be paid between now and May 1, at which time shares
     outstanding would go up by the call amount, which is just the
     conversion amount, into $52.45 a share.

     You had one other question, which was...


                                       21

   22

Jeff Gendell: Shares outstanding.

Marcus Rowland: ...shares outstanding. Shares outstanding, assuming the Gothic
     transaction closes by the end of the year, on a fully diluted basis
     would be approximately 172 million, assuming that they don't close by
     the end of the year, fully diluted would be about 168 million shares.

Jeff Gendell: So the debt level would be about $1 billion.

Marcus Rowland: The debt level would be $920 million.

Jeff Gendell: Okay, $920 million.

Marcus Rowland:...plus $210 million, it would be $1,130,000,000, pro forma
     assets of about 1.7 Tcf equivalent.

Jeff Gendell: And then equity - your equity level, because I didn't have - my
     fax didn't have a balance sheet, so the equity level...

Aubrey McClendon: You didn't get a different fax, Jeff, just so you know...

Marcus Rowland: I will read you through...

Aubrey McClendon: ...we didn't discriminate.

Marcus Rowland: ...where I think the equity level will be on a shareholders'
     basis in just one second.

                                       22

   23

Jeff Gendell: For the deferred tax assets, you know, we all, you know,
     understand that the more money you make now, the less that asset will
     be. So...

Aubrey McClendon: Well, actually that anticipates the fourth quarter earnings
     that we...

Jeff Gendell: Yes.

Aubrey McClendon: ...that we do expect.

Marcus Rowland: Where we are today is, we have a negative shareholders' equity
     of about $40 million, which is down significantly from the beginning of
     the year. If we look to the fourth quarter, earnings of...

Jeff Gendell: Just say they're the same at this quarter. I mean, that's the -
     you've got to make more than you did third quarter.

Marcus Rowland: I'm assuming that the fourth quarter...

Jeff Gendell: Yes, you can get the...

Marcus Rowland: Let's just assume $70 million for talking purposes.

Jeff Gendell: Okay.

Marcus Rowland: That would turn us to a positive shareholders' equity of $30
     million by that time with no other issuance. And then to that would be
     added the $385 million of deferred tax asset valuation reversal.






                                       23

   24
Jeff Gendell: And then what about out of Gothic? Since you're issuing some stock
     there, the net effect of Gothic will be...

Marcus Rowland: Gothic would be booked at the share price at the date that we
     made the transaction, which was approximately $7 a share, times four
     million shares. If we issue those prior to the end of the year, our
     equity could increase by $28 million, assuming that transaction closes.

Jeff Gendell: So you could have $440 million kind of - $400 to $450 million of
     positive equity on December 31.

Marcus Rowland: Given those assumptions that we just went through, that's
     correct.

Jeff Gendell: Okay, great. And then one last question, Aubrey, I just - kind
     of on a forum, I just want to - a very quick discussion on, if your
     company is worth $15, and you know what your finding costs are, why
     would you be issuing equity to retire some of this debt or issuing, you
     know, any kind of common equity at all? When your debt is fixed, your
     stock's at 5-3/4, I would think you'd want to buy-back 20 million
     shares, not issue all this equity.

Aubrey McClendon: Jeff, I don't think in any of our comments that we've talked
     about being willing to issue additional equity at $5.75 a share. I
     think we do have first call on the preferred stock at May 1. We can
     call it for stock, we can call it for cash or a combination of the two.
     It really depends on the stock price at the time. Obviously, Tom and I,
     given our ownership interests here, you know, are not interested in
     dilution. At the same time, I think that the de-leveraging that we have
     accomplished this year does give us the likelihood of trading at a
     higher multiple in the future as people recognize the de-levering
     that's taken place and the fact that, you know, we're on target to have
     what I consider to be pretty normal leverage of 50 cents per Mcfe.



                                       24

   25

     And in terms of the Gothic debt, obviously, we've done the transactions
     to date at a higher price than $5.75. And obviously we'll just have to
     wait and see what the future brings in terms of our stock price
     vis-a-vis further de-leveraging.

     But we are going to have quite a bit of cash. And I understand your
     point. And our concern is, obviously, to increase the price of the
     stock. And we think the best way to do that on a go-forward basis is to
     generate the kind of numbers that we've been generating and have the
     company continue to de-lever on a relative basis.

     And we have to also prepare for the possibility that - you know, of a
     decline in prices at some point in the future. We don't think it will
     be as dramatic as it was in '98 or '99. But we certainly don't want to
     subject ourselves and shareholders to what we all went through before.

     So I hope that gives you some insight into how we're thinking about
     trying to enhance the value of our stock, while at the same time
     further enhancing the balance sheet as we go forward.

Operator: And we'll move now to Joe Phillips at Freeman Securities.

Joe Phillips: Hello. Can you give me figures please for the amortization of
     deferred finance charges, either bank debt or bond discount?

Marcus Rowland: I believe I can.

Joe Phillips: Quarter or nine-months, either one is fine.

Marcus Rowland: I understand. Year to date our total amortization of those
     assets, which is primarily amortization of our bond issuance cost, has
     been $5.5 million, for the quarter just




                                       25

   26

     ended, approximately $1.8 million, of which the amortization part
     currently is about $1.2 million a quarter and the depreciation amount
     about 1/3 of it.

Joe Phillips: Great. Thanks very much.

Operator: And we'll go now to Rod Dunlap at BNP Paribas.

Rod Dunlap: A quick question, guys, can you just comment a little bit on your
     oil production in the quarter versus the prior quarter, what was going
     on there and what you see going forward? I know it's, obviously, a
     minority part of your production. But...

Aubrey McClendon: It was down about 4%, from 791,000 barrels to 761,000. And
     we are basically allowing it to decline as we reinvest our cash mainly
     in projects that are geared towards natural gas. So we've projected
     that that will continue to drift down as our percentage of production
     from gas continues to go up.

     And as we look at 2001, our projection there is for about an 8% to 9%
     overall decline in oil production versus 2000 production of oil. And
     it's generally coming out of the Louisiana Chalk, where we have not
     been reinvesting the cash flow from there. And that has typically been
     our oiliest area.

Rod Dunlap: Okay. Thanks.

Operator: And we'll go now to Terry Hoye at Provident Investment Management.

Terry Hoye: Good morning, gentlemen. As we try to model the fold-in of Gothic
     Energy, could you give us your current thoughts on how much savings,
     both from G&A and possibly in production, that you see right now?




                                       26

   27
Marcus Rowland: Sure. Gothic's production level is currently running just
     above 80 million cubic feet of gas equivalent per day. We've basically
     indicated that we anticipate being able to hold that, as a contribution
     to our production, flat next year, resulting in approximately 30 Bcf
     equivalent of added production.

     We view that as being a combination of their existing production, plus
     100% of the drilling that while it will be done on Chesapeake's nickel,
     so to speak, next year it will be on the assets that we're acquiring.
     And so we've considered that as Gothic production for next year.

     With respect to G&A, we anticipate the guidance that we've given of 10
     cents per Mcf equivalent of production being the level of our G&A,
     inclusive of Gothic's addition next year. So basically the office in
     Tulsa will be closed in the first quarter of next year. And the people
     that will be coming over are primarily field operating people. And
     those are included in our production costs. So we're looking basically
     to add that production with no increase on a per Mcf equivalent basis
     next year.

     Other guidance, with respect to those assets, currently Gothic has no
     production hedges in place for the year 2001. They do have about 2/3 of
     their gas hedged for November and December at well head prices just
     under $5 per Mcf.

     So we look for a very strong contribution of operating cash in the
     fourth quarter, whether on our books or not, that will allow them to
     reduce their current bank debt outstanding to an anticipated level of
     zero at closing.

Terry Hoye: Okay. Do you look for any asset sales from those assets?



                                       27

   28

Marcus Rowland: No. We do not have any asset sales currently planned. Gothic
     has done a good job, in our opinion, of divesting themselves of assets
     that didn't fit their core areas, which now are essentially our core
     areas. And so through time, they've peeled off some of the assets that
     don't fit into our areas. And we do not look for any significant asset
     sales at all.

Terry Hoye: Okay. And is there any possibility to expand the telemetry system or
     to make further use of that in the Chesapeake assets?

Marcus Rowland: We believe there is that potential. The way that the agreement
     is structured currently, they have a number of unused licenses under
     their existing agreement with Amoco. The Gothic production entity will
     be able to continue to utilize those licenses on wells that are drilled
     inside of units that are producing. We will be discussing with Amoco
     the potential of expanding into other areas that Chesapeake currently
     is utilizing.

     And I'd also point out that there are a number of other remote
     telemetry-type systems that are being marketed currently by others. And
     we're beginning to see those impact our operating costs as well. Those
     range from, you know, remote metering to actual positive controls on a
     remote telemetry basis.

Terry Hoye: Okay. Thank you very much.

Aubrey McClendon: Thank you.

Operator: That is all the time we have for questions today. Mr. McClendon, I
     will turn the call back over to your for any additional or closing
     remarks.



                                       28

   29

Aubrey McClendon: Great. Thank you. We appreciate you joining us, we hope you'll
     call us later today if you have any additional questions. And I look
     forward to talking to you soon. Thank you and goodbye.

Operator: And that does conclude today's conference call.

     There will be a rebroadcast of this conference available today at 12
     o'clock Eastern Time, running through November 3 at midnight Eastern
     Time. To access this, simply dial 719-457-0820 and use pass-code number
     478858. Thank you and have a great day.


                                       END


                                       29