CHESAPEAKE ENERGY CORP, S-3, 1998-04-21

CHESAPEAKE ENERGY CORP
S-3, 1998-04-21
CRUDE PETROLEUM & NATURAL GAS

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<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1998
Registration No. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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

<TABLE>
<S> <C>
OKLAHOMA 73-1395733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

AUBREY K. MCCLENDON
6100 NORTH WESTERN AVENUE 6100 NORTH WESTERN AVENUE
OKLAHOMA CITY, OKLAHOMA 73118 OKLAHOMA CITY, OKLAHOMA 73118
(405) 848-8000 (405) 848-8000
(Address, including zip code, and telephone number, (Name, address, including zip code, and telephone
including area code, of registrant's principal executive offices) number, including area code, of agent for service)
</TABLE>

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Copies to:
<TABLE>
<S> <C> <C>

G. MICHAEL O'LEARY WILLIAM B. FEDERMAN SETH R. MOLAY, P.C.
GISLAR DONNENBERG DAY, EDWARDS, FEDERMAN AKIN, GUMP, STRAUSS,
ANDREWS & KURTH L.L.P. PROPESTER & CHRISTENSEN, P.C. HAUER & FELD, L.L.P.
600 TRAVIS, SUITE 4200 210 PARK AVENUE, SUITE 2900 1700 PACIFIC AVENUE, SUITE 4100
HOUSTON, TEXAS 77002 OKLAHOMA CITY, OKLAHOMA 73102 DALLAS, TX 75201-4675
(713) 220-4200 (405) 239-2121 (214) 969-2800
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after this Registration Statement becomes
effective.

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If the only securities being registered on this Form are being offered
pursuant to a dividend or interest reinvestment plans, please check the
following box: [ ]

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: |X|

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 statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(c) 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: [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box: [ ]

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CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=============================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE (2) PRICE (3)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value per share 6,683,129 $5.46875 $36,548,361 $10,782
=============================================================================================================================
</TABLE>

(1) This Registration Statement relates to the offering from time to time of an
aggregate of 6,683,129 shares (the "Offered Shares") of the Registrant, par
value $0.01 per share ("CHK Common Stock"), received by (i) a certain
holder of common stock, par value $0.001 per share, of DLB Oil & Gas, Inc.,
an Oklahoma corporation ("DLB," and such common stock, the "DLB Common
Stock"), in the DLB Merger described in the enclosed Prospectus and (ii)
AnSon Partners Limited Partnership, an Oklahoma limited partnership
("AnSon"), in the AnSon Merger described in the enclosed Prospectus. Also
includes such indeterminate number of shares issuable in respect of the
Offered Shares in connection with stock splits, stock dividends and similar
transactions.
(2) Calculated in accordance with Rule 457(c) under the Securities Act of 1933,
based on the average of the high and low prices of the CHK Common Stock on
April 16, 1998 on the New York Stock Exchange Composite Tape.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the product of $5.46875 times 6,683,129.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 9(a),
MAY DETERMINED.

================================================================================
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

SUBJECT TO COMPLETION, DATED APRIL 20, 1998
PROSPECTUS

6,683,129 SHARES

CHESAPEAKE ENERGY CORPORATION

COMMON STOCK

This prospectus (the "Prospectus") relates to (i) the 2,890,405 shares
(the "Davidson Shares") of common stock, par value $0.01 per share ("CHK Common
Stock"), of Chesapeake Energy Corporation, an Oklahoma corporation ("CHK"),
which Charles E. Davidson ("Davidson") will receive in the DLB Merger (as
described below), and (ii) the 3,792,724 shares of CHK Common Stock (the "AnSon
Shares") received by AnSon Partners Limited Partnership, an Oklahoma limited
partnership ("AnSon"), in the AnSon Merger (as described below). The Davidson
Shares may be offered from time to time after the DLB Merger by and for the
account of Davidson and the AnSon Shares may be offered from time to time by and
for the account of AnSon. The AnSon Shares and the Davidson Shares are referred
to herein collectively as the "Offered Shares." AnSon and Davidson are referred
to herein collectively as the "Selling Shareholders."

CHK will not receive any of the proceeds from the sale of the Offered
Shares. CHK will bear all expenses in connection with the registration of the
Offered Shares. The Selling Shareholders will bear the underwriting discounts,
commissions and transfer taxes, if any, associated with sales of the Offered
Shares. See "Selling Shareholders," "Use of Proceeds" and "Plan of
Distribution."

Pursuant to the Agreement and Plan of Merger, dated as of October 22,
1997, among CHK, Chesapeake Merger Corp., an Oklahoma corporation and an
indirect wholly owned subsidiary of CHK ("Merger Sub"), and DLB Oil & Gas, Inc.,
an Oklahoma corporation ("DLB"), as amended by Amendment No. 1 thereto, dated as
of December 22, 1997, Amendment No. 2 thereto, dated as of February 11, 1998 and
Amendment No. 3 thereto, dated as of March 24, 1998 (as so amended, the "DLB
Merger Agreement"), Merger Sub will merge with and into DLB, with DLB continuing
as the surviving corporation (the "DLB Merger"). DLB shareholders will receive
5,000,000 shares of CHK Common Stock, representing approximately 5.0% of the
total CHK Common Stock currently outstanding, of which Davidson will receive up
to 2,890,405 shares, representing approximately 2.9% of the total CHK Common
Stock currently outstanding (approximately 2.7% of the outstanding CHK Common
Stock upon consummation of the DLB Merger). The DLB Merger is expected to close
on or about April 28, 1998.

Pursuant to the Merger Agreement and Plan of Reorganization, dated as
of October 22, 1997, as amended by the First Amendment thereto dated December
15, 1997 (as so amended, the "AnSon Merger Agreement"), among CHK, Chesapeake
Merger II Corp., an Oklahoma corporation and an indirect wholly owned subsidiary
of CHK ("AnSon Merger Sub"), AnSon Production Corporation, an Oklahoma
corporation ("AnSon Production"), and AnSon, AnSon Production was merged with
and into AnSon Merger Sub, with AnSon Merger Sub continuing as the surviving
corporation. AnSon received 3,792,724 shares of CHK Common Stock, representing
approximately 3.8% of the total CHK Common Stock currently outstanding
(approximately 3.6% of the outstanding CHK Common Stock upon consummation of the
DLB Merger). For a further description of certain agreements of CHK relating to
the AnSon Shares, see "Summary--AnSon Price Guarantee" and "Selling
Shareholders."

The AnSon Shares and Davidson Shares may be offered for sale from time
to time by Davidson or AnSon, respectively, or by pledgees, donees, transferees
or other successors in interest, to or through underwriters or directly to other
purchasers or through agents in one or more transactions on the New York Stock
Exchange, Inc. (the "NYSE"), in the over-the-counter market, in one or more
private transactions, or in a combination of such methods of sale or any other
legally available means, at prices and on terms then prevailing, at prices
related to such prices, or at negotiated prices. The Selling Shareholders and
any brokers and dealers through whom sales of the Offered Shares are made may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended ("Securities Act"), and the commissions or discounts and other
compensation paid to such persons may be regarded as underwriters' compensation.
See "Plan of Distribution." Pursuant to the terms of each of the Davidson
Registration Rights Agreement (as described herein) and the AnSon Registration
Rights Agreement (as described herein), CHK has agreed to indemnify Davidson and
AnSon, respectively, against certain liabilities, including liabilities under
the Securities Act.

CHK Common Stock is listed for trading on the NYSE under the symbol "CHK."

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

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN
CONNECTION WITH AN INVESTMENT IN THE OFFERED SHARES, SEE "RISK FACTORS"
BEGINNING ON PAGE 3.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES 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 , 1998.

<PAGE> 3

AVAILABLE INFORMATION

CHK is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports and other information with the Commission relating to its business,
financial position, results of operations and other matters. Such reports, proxy
statements, information statements and other information can be inspected and
copied at the Public Reference Section maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its Regional
Offices located at The Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511, and 7 World Trade Center, New York, New York
10048. Copies of such material also can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. CHK Common Stock is listed for trading on the NYSE. Such
reports, proxy statements, information statements and other materials can also
be inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005. The Commission also maintains a site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.

CHK has filed with the Commission a Registration Statement (including all
amendments thereto, the "Registration Statement") on Form S-3 under the
Securities Act with respect to the CHK Common Stock offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus does not contain
all the information set forth in the Registration Statement and the exhibits and
schedules thereto. Such additional information is available for inspection and
copying at the offices of the Commission. Statements contained in this
Prospectus, in any Prospectus Supplement or in any document incorporated by
reference herein or therein as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to, or incorporated by reference in, the Registration Statement, and
each such statement being qualified in all respects by such reference.

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING OF THE SHARES OF CHK COMMON STOCK COVERED BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY CHK, DAVIDSON OR ANSON. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
OFFERED SHARES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS NOT
LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES MADE UNDER THIS PROSPECTUS
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR THE AFFAIRS OF CHK SINCE THE
DATE OF THIS PROSPECTUS.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. ALL
STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDED AND INCORPORATED
BY REFERENCE IN THIS PROSPECTUS, INCLUDING WITHOUT LIMITATION STATEMENTS UNDER
"SUMMARY," "RISK FACTORS" AND "THE COMPANY" REGARDING PLANNED CAPITAL
EXPENDITURES, THE ACQUISITIONS (AS DEFINED), INCREASES IN OIL AND GAS
PRODUCTION, CHK'S FINANCIAL POSITION, BUSINESS STRATEGY AND OTHER PLANS AND
OBJECTIVES FOR FUTURE OPERATIONS, ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH CHK
BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE
BEEN CORRECT. CHK CAUTIONS PROSPECTIVE INVESTORS THAT ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE EXPECTED BY CHK, DEPENDING ON THE OUTCOME OF
CERTAIN FACTORS, INCLUDING, WITHOUT LIMITATION, FACTORS DISCUSSED UNDER "RISK
FACTORS" SUCH AS CONCENTRATION OF UNEVALUATED LEASEHOLD IN LOUISIANA, IMPAIRMENT
OF ASSET VALUE, NEED TO REPLACE RESERVES, SUBSTANTIAL CAPITAL REQUIREMENTS,
SUBSTANTIAL INDEBTEDNESS, FLUCTUATIONS IN THE PRICES OF OIL AND GAS,
UNCERTAINTIES INHERENT IN ESTIMATING QUANTITIES OF OIL AND GAS RESERVES AND
PROJECTING FUTURE RATES OF PRODUCTION AND TIMING OF DEVELOPMENT EXPENDITURES,
COMPETITION, OPERATING RISKS, ACQUISITION RISKS AND INTEGRATION OF OPERATIONS,
RESTRICTIONS IMPOSED BY LENDERS, LIQUIDITY AND CAPITAL REQUIREMENTS AND THE
EFFECTS OF GOVERNMENTAL AND ENVIRONMENTAL REGULATION, PATENT AND SECURITIES
LITIGATION AND ADVERSE CHANGES IN THE MARKET FOR CHK'S OIL AND GAS PRODUCTION.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. CHK UNDERTAKES NO OBLIGATION
TO RELEASE PUBLICLY THE RESULT OF ANY REVISIONS TO THESE FORWARD-LOOKING
STATEMENTS THAT MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE
HEREOF, INCLUDING, WITHOUT LIMITATION, CHANGES IN CHK'S BUSINESS STRATEGY OR
PLANNED CAPITAL EXPENDITURES, OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED
EVENTS.

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<PAGE> 4

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents, all of which were previously filed with the
Commission by CHK (File No. 1-13726) pursuant to the Exchange Act, are
incorporated by reference in this Prospectus:

1. Annual Report on Form 10-K for the fiscal year ended June 30, 1997 and
Transition Report for the six months ended December 31, 1997;

2. Current Reports on Form 8-K dated March 21, April 1 and April 10, 1998;
and

3. The description of CHK Common Stock contained in CHK's registration
statement on Form 8-B, dated December 11, 1996 (File No. 001-13726) and
any amendment or report filed for the purpose of updating such
description.

All documents and reports subsequently filed by CHK pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering of the shares of CHK Common Stock covered by this Prospectus shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the dates of filing of such documents or reports. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.

THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE RELATING TO CHK
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE) ARE AVAILABLE, WITHOUT CHARGE, TO EACH PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED, ON WRITTEN OR ORAL
REQUEST TO CHESAPEAKE ENERGY CORPORATION, 6100 NORTH WESTERN AVENUE, OKLAHOMA
CITY, OKLAHOMA 73118, ATTENTION: CORPORATE SECRETARY (TELEPHONE NUMBER:
(405) 848-8000, EXTENSION 212).

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<PAGE> 5

SUMMARY

The following is a summary of, and is qualified in its entirety by, the
more detailed information contained elsewhere in this Prospectus and the
documents incorporated by reference herein. Certain terms used herein are
defined elsewhere in this Prospectus. Prospective purchasers are urged to read
this Prospectus and the documents incorporated herein by reference in their
entirety. Prospective purchasers should carefully consider the information set
forth below under the heading "Risk Factors" beginning on page 3 hereof.

CHESAPEAKE ENERGY CORPORATION

CHK is an independent oil and gas company engaged in the exploration,
production, development and acquisition of oil and natural gas in major onshore
producing areas of the United States and Canada.

From inception in 1989 through December 31, 1997, CHK drilled and
participated in a total of 824 gross (334 net) wells, of which 768 gross (312
net) wells were completed. From June 30, 1990 to December 31, 1997, CHK's
estimated proved reserves increased to 448 billion cubic feet equivalent
("Bcfe") from 11 Bcfe and total assets increased to $953 million from $8
million. Despite its overall favorable record of growth, in the fiscal year
ended June 30, 1997 and in the six month period ended December 31, 1997 (the
"Transition Period"), CHK incurred net losses of $183 million and $32 million,
respectively, primarily as a result of $236 million and $110 million,
respectively, impairments of its oil and gas properties. The impairments were
amounts by which CHK's capitalized costs of oil and gas properties exceeded the
estimated present value of future net revenues from CHK's proved reserves at
June 30, 1997 and at December 31, 1997, respectively. See "Risk
Factors--Impairment of Asset Value."

In response to the losses, CHK significantly revised its business
strategy during the Transition Period. These revisions included (i) reducing the
size and risk of its exploratory drilling program, especially in the Louisiana
Austin Chalk Trend (the "Louisiana Trend"), (ii) acquiring significant
quantities of long-lived natural gas reserves, particularly in the Mid-Continent
region of the U.S., (iii) building a larger inventory of lower risk drilling
opportunities through acquisitions and joint ventures and (iv) reducing its
capital expenditure budget for exploration and development to more closely match
anticipated cash flow from operations.

CHK has acquired or has agreed to acquire a substantial amount of
proved oil and gas reserves through mergers and acquisitions of oil and gas
properties. Since October 1997, CHK has entered into 10 transactions to acquire
an aggregate of approximately 716 Bcfe of estimated proved reserves (the
"Acquisitions") at an estimated total cost of $717 million (including associated
debt to be assumed and the value attributable to shares of CHK Common Stock to
be issued, but excluding the value attributable to other assets such as
gathering systems, processing plants and other items). Of these transactions,
one was closed in December 1997, three were closed in the first quarter of 1998
and six are pending (the "Pending Acquisitions"). See "Recent and Pending
Acquisitions" in Item 1. "Business" of CHK's Transition Report on Form 10-K,
which is incorporated by reference herein.

CHK's executive offices are located at 6100 North Western Avenue,
Oklahoma City, Oklahoma 73118, and its telephone number at that location is
(405) 848-8000.

For additional information concerning CHK and its subsidiaries, see
"Available Information."

ANSON PRICE GUARANTEE

Pursuant to the AnSon Merger Agreement, CHK acquired AnSon for a total
consideration of $43 million, consisting of (i) the issuance of 3,792,724 shares
of CHK Common Stock and (ii) cash in an amount to be determined by the
difference of the per share net proceeds received by AnSon from the sale of the
AnSon Shares multiplied by the number of AnSon Shares actually sold during a
30-day period commencing on that day of April 1998 on which AnSon Shares are
first sold and the agreed value of such AnSon Shares, which was determined to be
$11.3375 per share (the "AnSon Price Guarantee"). Assuming net proceeds to AnSon
of $5.625 per share of CHK Common Stock (the closing price of CHK Common Stock
on April 9, 1998), the cash amount payable by CHK to AnSon would have been
approximately $21.7 million. To receive the full cash payment, all AnSon Shares
will have to be sold by AnSon within such 30-day period.

To the extent that the AnSon Shares are sold within such 30-day period
at a net price of less than $11.3375 per share, CHK's cash payment will
effectively reimburse AnSon for all or a portion of the underwriting discounts
and commissions, if any, paid by AnSon in connection with such sale of the AnSon
Shares.

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<PAGE> 6

THE OFFERING

<TABLE>
<S> <C>
CHK Common Stock Offered by the Selling
Shareholders:
Davidson Shares.................................. 2,890,405
AnSon Shares..................................... 3,792,724
Total..................... 6,683,129
CHK Common Stock to be outstanding
before and after the Offering 105,102,270(1)(2)

Listing............................................... The CHK Common Stock is listed for trading on the
New York Stock Exchange
Trading Symbol ....................................... "CHK"
Use of Proceeds ...................................... The Offered Shares are being offered by the Selling
Shareholders. CHK will not receive any of the proceeds
from the sale of the Offered Shares.
</TABLE>
- ----------------------------
(1) Excludes 11,462, 220 shares of CHK Common Stock reserved for issuance upon
exercise of outstanding options (1,403,513 of which are to be issued to
former holders of Hugoton options pursuant to replacement options issued in
connection with the Hugoton Merger).

(2) Includes the 5,000,000 shares of CHK Common Stock to be issued in
connection with the DLB Merger.

SELLING SHAREHOLDERS

The Davidson Shares and the AnSon Shares are being offered on behalf of
Charles E. Davidson and AnSon Partners Limited Partnership, an Oklahoma limited
partnership, respectively. Following the offering and assuming that (i) all
Davidson Shares will be sold within 90 days of the DLB Effective Time (the
period for which CHK has agreed to keep this Registration Statement effective
with respect to the Davidson Shares) and (ii) all AnSon Shares will be sold by
March 21, 1999 (the period for which CHK has agreed to keep this Registration
Statement effective with respect to the AnSon Shares), neither Davidson nor
AnSon will own any shares of CHK Common Stock. The Selling Shareholders will
receive all the proceeds from the sale of the Offered Shares. See "Selling
Shareholders."

-2-

<PAGE> 7

RISK FACTORS

Prospective purchasers should carefully consider the matters discussed
in this section of the Prospectus before purchasing any of the Offered Shares.
These matters should be considered in conjunction with the other information
included and incorporated by reference in this Prospectus.

CONCENTRATION OF UNEVALUATED LEASEHOLD IN LOUISIANA

CHK's future performance will be affected by the development results of
its existing proved undeveloped reserves and its inventory of unproved drilling
locations, particularly in the Louisiana Trend and the Tuscoloosa Trend. As of
December 31, 1997, CHK had an investment in total unevaluated and unproved
leasehold of approximately $125 million, of which approximately $66 million was
located in the Louisiana Trend and the Tuscoloosa Trend. Approximately 42%, or
$98 million, of CHK's 1998 drilling budget is associated with drilling,
construction of production facilities and seismic activity in the Louisiana
Trend and the Tuscoloosa Trend. Failure of these drilling activities to achieve
anticipated quantities of economically attractive reserves and production would
have a material adverse impact on CHK's liquidity, operations and financial
results and could result in future full-cost ceiling writedows.

IMPAIRMENT OF ASSET VALUE

CHK reported full-cost ceiling writedowns of $236 million and $110
million in the fiscal year ended June 30, 1997 and the six months ended December
31, 1997. Beginning in the quarter ended September 30, 1997, CHK reduced its
drilling budget for the Austin Chalk in the Louisiana Trend overall and
concentrated remaining Austin Chalk drilling activity in the Masters Creek area.
In addition, CHK began to pursue a strategy to replace and expand its oil and
gas reserves through acquisitions as a complement to its historical strategy of
adding reserves through exploratory drilling. CHK has also reduced its emphasis
on acquiring unproved leasehold acreage to be developed through exploratory
drilling. While these actions are intended to mitigate the higher risks
associated with a growth strategy based on significant exploratory drilling,
there can be no assurance that this change in strategy will result in enhanced
future economic results or will prevent additional leasehold impairment and/or
full-cost ceiling writedowns. See "Primary Operating Areas" in Item 1.
"Business" of CHK's Form 10-K and Transition Report which are incorporated by
reference herein.

Since December 31, 1997, oil prices have declined, reaching ten-year
lows in March 1998. In addition, the Company has completed several acquisitions
based on expectations of higher oil and gas prices than those currently being
received. Based on New York Mercantile Exchange ("NYMEX") oil prices of $16.50
per Bbl and NYMEX gas prices of $2.35 per Mcf in effect on March 25, 1998, and
estimates of the Company's proved reserves as of December 31, 1997 (pro forma
for the acquisitions completed during the quarter ended March 31, 1998), the
Company estimates it will incur an additional full cost ceiling writedown of
between $175 million and $200 million as of March 31, 1998. If this occurs, the
Company will incur a substantial loss for the first quarter of 1998 which would
further reduce shareholders' equity and reported earnings. Based upon current
oil and gas prices, if the Pending Acquisitions occur in the second quarter of
1998, CHK may record a further full-cost ceiling writedown with respect to the
acquired properties on June 30, 1998, the amount of which is not yet known.

CHK uses the full-cost method of accounting for its investment in oil
and gas properties. Under the full-cost method of accounting, all costs of
acquisition, exploration and development of oil and gas reserves are capitalized
into a "full-cost pool" as incurred, and properties in the pool are depleted and
charged to operations using the unit-of-production method based on the ratio of
current production to total proved oil and gas reserves. To the extent that such
capitalized costs (net of accumulated depreciation, depletion and amortization)
less deferred taxes exceed the present value (using a 10% discount rate) of
estimated future net cash flows from proved oil and gas reserves and the lower
of cost or fair value of unproved properties after income tax effects, such
excess costs are charged to operations. If a writedown is required, it would
result in a charge to earnings but would not have an impact on cash flows from
operating activities. Once incurred, a writedown of oil and gas properties is
not reversible at a later date even if oil and gas prices increase.

Following CHK's announcement in late June 1997 of disappointing
drilling results in the Louisiana Trend and a full-cost ceiling writedown, a
number of purported class action lawsuits alleging violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder were
filed against CHK and certain of its officers and directors. See "-- Patent and
Securities Litigation."

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<PAGE> 8

ACQUISITION RISKS AND INTEGRATION OF OPERATIONS

CHK's growth strategy includes the acquisition of oil and gas properties.
There can be no assurance, however, that CHK will be able to identify attractive
acquisition opportunities, obtain financing for acquisitions on satisfactory
terms or successfully acquire identified targets, including the Pending
Acquisitions. Future acquisitions may be financed through the incurrence of
additional indebtedness to the extent permitted under the terms of CHK's then
existing indebtedness or through the issuance of capital stock.

Furthermore, there can be no assurance that competition for acquisition
opportunities in the oil and gas industry will not escalate, thereby increasing
the cost to CHK of making further acquisitions or causing CHK to refrain from
making additional acquisitions.

CHK is subject to risks that properties acquired by it (including those
acquired and to be acquired in the Acquisitions) will not perform as expected,
that estimates of value will not prove accurate and that the returns from such
properties will not support the indebtedness incurred or the other consideration
used to acquire, or the capital expenditures needed to develop, such properties.
The addition of the properties acquired and to be acquired in the Acquisitions
may result in additional full cost ceiling writedowns to the extent CHK's
capitalized costs of such properties exceed the estimated present value of the
related proved reserves. In addition, expansion of CHK's operations may place a
significant strain on CHK's management, financial and other resources. CHK's
ability to manage future growth will depend upon its ability to monitor
operations, maintain effective costs and other controls and significantly expand
CHK's internal management, technical and accounting systems, all of which will
result in higher operating expenses. Any failure to expand these areas and to
implement and improve such systems, procedures and controls in an efficient
manner at a pace consistent with the growth of CHK's business could have a
material adverse effect on CHK's business, financial condition and results of
operations. In addition, the integration of acquired properties with existing
operations will entail considerable expenses in advance of anticipated revenues
and may cause substantial fluctuations in CHK's operating results. There can be
no assurance that CHK will be able to successfully complete each of the Pending
Acquisitions, or to successfully integrate the properties acquired and to be
acquired in the Acquisitions or any other businesses it may acquire.

CHK has also acquired proved reserves in Canada. In addition to the risks
described above, the acquisition of assets in Canada has the additional risks
associated with currency exchange and valuation, foreign regulation and
taxation, and severe climate and operating conditions.

NEED TO REPLACE RESERVES; SUBSTANTIAL CAPITAL REQUIREMENTS

As is customary in the oil and gas exploration and production industry,
CHK's future success depends upon its ability to find, develop or acquire
additional oil and gas reserves that are economically recoverable. Unless CHK
successfully replaces the reserves that it produces through successful
development, exploration or acquisition, CHK's proved reserves will decline.
Further, approximately 43% of CHK's estimated proved reserves at December 31,
1997 (17% pro forma for the Acquisitions) were located in the Austin Chalk
formation in Texas and Louisiana, where wells are characterized by rapid decline
rates. Additionally, approximately 47% of CHK's total estimated proved reserves
at December 31, 1997 were undeveloped. Recovery of such reserves will require
significant capital expenditures and successful drilling operations. There can
be no assurance that CHK will be successful in its efforts to find and produce
reserves economically in the future.

CHK has made and intends to make substantial capital expenditures in
connection with the development, exploration and production of its oil and gas
properties and the acquisition of proved reserves. Historically, CHK has funded
its capital expenditures through a combination of internally generated funds,
equity issuance and long-term and short term debt financing arrangements. 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 CHK's success in developing,
acquiring and producing new reserves. If revenue were to decrease as a result of
lower oil and gas prices, decreased production or otherwise, and CHK's access to
capital was limited, CHK would have a reduced ability to replace its reserves or
to maintain production at current levels, resulting in a decrease in production
and revenue over time. If CHK's cash flow from operations is not sufficient to
satisfy its capital expenditure budget, there can be no assurance that
additional debt or equity financing will be available to meet these
requirements.

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<PAGE> 9

SUBSTANTIAL INDEBTEDNESS

As of December 31, 1997, and as a result of the loss incurred during
the Transition Period, CHK's shareholders' equity was $280 million, versus
long-term indebtedness of $509 million. Long-term indebtedness represented
approximately 65% of total book capitalization. If CHK incurs additional
full-cost ceiling writedowns (such as the possible writedown of up to
approximately $200 million which could be recorded as of March 31, 1998 using
estimates of proved reserves as of December 31, 1997 and commodity prices as of
March 25, 1998), shareholders' equity will be further reduced. Standard & Poor's
and Moody's Investors Service ("Moody's") have both recently downgraded CHK's
credit ratings. Moody's has announced that its outlook for CHK's credit ratings
is negative pending Moody's ongoing evaluation of CHK's new business strategy.

CHK anticipates funding announced acquisitions and potential future
acquisitions with a combination of commercial bank debt, long-term debt or
preferred or common equity. If, as a result of general market conditions,
additional losses, reduced credit ratings or for any other reason, CHK is unable
to issue additional securities or borrow from commercial banks, CHK's liquidity
would be impaired and growth potential. Sustained negative credit conditions
could result in reduced earnings or losses.

PATENT AND SECURITIES LITIGATION

CHK and certain of its officers and directors are defendants in a
consolidated class action suit alleging violations of the Exchange Act. The
plaintiffs assert that the defendants made material misrepresentations and
failed to disclose material facts about the success of CHK's exploration efforts
in the Louisiana Trend. As a result, the complaint alleges, the price of CHK
Common Stock was artificially inflated from January 25, 1996 until June 27,
1997, when CHK issued a press release announcing disappointing drilling results
in the Louisiana Trend and a full-cost ceiling writedown to be reflected in its
June 30, 1997 financial statements. The plaintiffs further allege that certain
of the named individual defendants sold CHK Common Stock during the class period
when they knew or should have known adverse nonpublic information. The
plaintiffs seek a determination that the suit is a proper class action and
damages in an unspecified amount, together with costs of litigation, including
attorneys' fees. CHK and the individual defendants believe that these actions
are without merit, and intend to defend against them vigorously. No estimate of
loss or range of estimate of loss, if any, can be made at this time.

Various purported class actions alleging violations of the Securities
Act and the Oklahoma Securities Act have been filed against CHK and others on
behalf of investors who purchased common stock of Bayard Drilling Technologies,
Inc. ("Bayard") in its initial public offering in November 1997. Total proceeds
of the offering were $254 million, of which CHK received net proceeds of $90
million. Plaintiffs allege that CHK, a major customer of Bayard's drilling
services and the owner of 30.1% of Bayard's common stock outstanding prior to
the offering, was a controlling person of Bayard. Plaintiffs assert that the
Bayard prospectus contained material omissions and misstatements relating to (i)
CHK's financial "hardships" and their significance on Bayard's business, (ii)
increased costs associated with Bayard's growth strategy and (iii) undisclosed
pending related-party transactions between Bayard and third parties other than
CHK. The alleged defective disclosures are claimed to have resulted in a decline
in Bayard's share price following the public offering. Each plaintiff seeks a
determination that the suit is a proper class action and damages in an
unspecified amount or rescission, together with interest and costs of
litigation, including attorneys' fees. No estimate of loss or range of estimate
of loss, if any, can be made at this time.

In October 1996, Union Pacific Resources Company ("UPRC") sued CHK
alleging infringement of a patent for a drilling method, tortious interference
of confidentiality contracts between UPRC and certain of its former employees
and misappropriation of proprietary information of UPRC. UPRC's claims against
CHK are based on services provided to CHK by a third party vendor controlled by
former UPRC employees. UPRC is seeking injunctive relief, damages of an
unspecified amount, including actual, enhanced, consequential and punitive
damages, interest, costs and attorneys' fees. CHK believes that it has
meritorious defenses to UPRC's allegations and has requested the court to
declare the UPRC patent invalid. CHK has also filed a motion to construe UPRC's
patent claims and various motions for summary judgment. No estimate of a
probable loss or range of estimate of a probable loss, if any, can be made at
this time; however, in reports filed in the proceeding, experts for UPRC claim
that damages could be as much as $18 million while Company experts state that
the amount should not exceed $25,000, in each case based on a reasonable
royalty.

While no prediction can be made as to the outcome of these matters or
the amount of damages that might be awarded, if any, an adverse result in any of
then could be material to CHK.

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<PAGE> 10

FLUCTUATIONS IN OIL AND GAS PRICES

CHK's revenue, profitability and future rate of growth are
substantially dependent upon prevailing prices for oil, natural gas and natural
gas liquids, which are dependent upon numerous factors such as weather,
economic, political and regulatory developments and competition from other
sources of energy. The volatile nature of the energy markets makes it
particularly difficult to estimate future prices of oil, gas and natural gas
liquids. Prices of oil, natural gas and natural gas liquids are subject to wide
fluctuations in response to relatively minor changes in circumstances, and there
can be no assurance that future prolonged decreases in such prices will not
occur. All of these factors are beyond the control of CHK. Any significant
further decline in oil and gas prices could have a material adverse effect on
CHK's operations, financial condition and level of expenditures for the
development of its oil and gas reserves, and may result in violations of certain
covenants contained in CHK's credit agreements or in additional writedowns of
carrying value of CHK's investments due to ceiling test limitations.

INCREASING DRILLING AND DEVELOPMENT COSTS

In accordance with customary industry practice, CHK relies on
independent third party service providers to provide most of the services
necessary to drill new wells, including drilling rigs and related equipment and
services, horizontal drilling equipment and services, trucking services,
tubulars, fracing and completion services and production equipment. The industry
has experienced significant price increases for these services during the last
year and this trend is expected to continue into the future. These cost
increases could in the future significantly increase the Company's development
costs and decrease the return possible from drilling and development activities,
and possibly render the development of certain proved undeveloped reserves
uneconomical.

HEDGING RISKS

From time to time, CHK enters into hedging arrangements relating to a
portion of its oil and gas production. These hedges have in the past involved
fixed arrangements and other arrangements at a variety of fixed prices and with
a variety of other provisions including price floors and ceilings. CHK may in
the future enter into oil and gas futures contracts, options, collars and swaps.
CHK's hedging activities, while intended to reduce CHK's sensitivity to changes
in market prices of oil and gas, are subject to a number of risks including
instances in which (i) production is less than expected, (ii) there is a
widening of price differentials between delivery points required by fixed price
delivery contracts to the extent they differ from those on CHK's production or
(iii) CHK's counterparties to its futures contract will be unable to meet the
financial terms of the transaction. While the use of hedging arrangements limits
the risk of declines in oil and gas prices, it may limit the benefit to CHK of
increases in the price of oil and gas.

UNCERTAINTY OF ESTIMATES OF OIL AND GAS RESERVES

There are numerous uncertainties inherent in estimating quantities of
proved oil and gas reserves, including many factors beyond the control of CHK.
These estimates rely upon various assumptions, including assumptions required by
the Commission as to constant 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, requiring significant decisions and
assumptions in the evaluation of available geological, geophysical, engineering
and economic data for each reservoir. In addition, reserve engineering is a
subjective process of estimating underground accumulations of oil and gas that
cannot be measured in any exact way, and the accuracy of any reserve estimate is
a function of the quality of available data and of engineering and geological
interpretation and judgment. As a result, estimates by different engineers often
vary, and are subject to great uncertainty. This is particularly true as to
proved undeveloped reserves which are inherently less certain than proved
developed reserves and which comprise a significant portion of CHK's proved
reserves. In addition, the estimated future net revenue from proved reserves and
the present value (using a 10% discount rate) thereof are based on certain
assumptions, including prices, future production levels and costs, that may not
prove correct. Actual future production, revenue, taxes, development
expenditures, operating expenses and quantities of recoverable oil and gas
reserves may vary substantially from those estimated by CHK. Any significant
variance in these assumptions could materially affect the estimated quantity and
value of reserves set forth in this Prospectus and may justify revisions of
earlier estimates, and such revisions may be material. In addition, CHK's
reserves may be subject to downward or upward revision, based upon production
history, results of future exploration and development, prevailing oil and gas
prices, development costs and other factors, many of which are beyond CHK's
control. In fiscal 1997 and for the six months ended December 31, 1997,
revisions to the Company's proved reserves, the estimated future net revenues
therefrom and the present value (using a 10% discount rate) thereof contributed
to $236 million and $110 million impairments, respectively, of CHK's oil and gas
properties. Based on NYMEX prices of $16.50 per Bbl and $2.35 per Mcf as of
March 25, 1998, and CHK's estimated proved reserves as of December 31, 1997, pro
forma for the

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<PAGE> 11

Acquisitions completed during the quarter ended March 31, 1998, CHK estimates
that it will record a full-cost ceiling writedown of between $175 million and
$200 million as of March 31, 1998. If current prices prevail during the second
quarter of 1998, CHK expects to record a further impairment as of June 30, 1998,
assuming the Pending Acquisitions are consummated.

DRILLING AND OPERATING RISKS

Oil and gas drilling activities are subject to numerous risks, many of
which are beyond CHK's control. CHK's operations may be curtailed, delayed or
canceled as a result of title problems, weather conditions, compliance with
governmental requirements, mechanical difficulties and shortages or delays in
the delivery of equipment. In addition, CHK's properties may be susceptible to
hydrocarbon drainage from production by other operators on adjacent properties.
Industry operating risks include the risk of fire, explosions, blow-outs, pipe
failure, abnormally pressured formations and environmental hazards such as oil
spills, gas leaks, ruptures or discharges of toxic gases, the occurrence of any
of which could result in substantial losses to CHK due to 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 investigation and penalties and suspension of operations.

CHK has been among the most active drillers of horizontal wells and
expects to drill a significant number of deep horizontal wells in the future.
CHK's horizontal drilling activities involve greater risk of mechanical problems
than conventional vertical drilling operations.

In accordance with customary industry practice, CHK maintains insurance
against some, but not all, of the risks described above. There can be no
assurance that any insurance will be adequate to cover losses or liabilities.
CHK cannot predict the continued availability of insurance, or its availability
at premium levels that justify its purchase.

RESTRICTIONS IMPOSED BY LENDERS

The instruments governing the indebtedness of CHK and certain of its
subsidiaries may impose significant operating and financial restrictions on CHK.
The terms of such indebtedness affect, and in many respects significantly limit
or prohibit, among other things, the ability of CHK to incur additional
indebtedness, pay dividends, repay indebtedness prior to its stated maturity,
sell assets or engage in mergers or acquisitions. These restrictions could also
limit the ability of CHK to effect future financings, make needed capital
expenditures, withstand a future downturn in CHK's business or the economy in
general, or otherwise conduct necessary corporate activities. A failure by CHK
to comply with these restrictions could lead to a default under the terms of
such indebtedness. In the event of default, the holders of such indebtedness
could elect to declare all of the funds borrowed pursuant thereto due and
payable together with accrued and unpaid interest. In such event, there can be
no assurance that CHK would be able to make such payments or borrow sufficient
funds from alternative sources to make any such payment. Even if additional
financing could be obtained, there can be no assurance that it would be on terms
that are favorable or acceptable to CHK. In addition, certain indebtedness
incurred by Chesapeake Acquisition Corporation, a wholly owned subsidiary of
CHK, is secured by Chesapeake Acquisition Corporation's pledge of its
subsidiaries' capital stock, prohibiting Chesapeake Acquisition Corporation from
incurring additional indebtedness.

GOVERNMENTAL REGULATION

Oil and gas operations are subject to various federal, state and local
governmental regulations which may be changed from time to time in response to
economic or political conditions. From time to time, regulatory agencies have
imposed price controls and limitations on production in order to conserve
supplies of oil and gas. In addition, the production, handling, storage,
transportation and disposal of oil and gas, by-products thereof and other
substances and materials produced or used in connection with oil and gas
operations are subject to regulation under federal, state and local laws and
regulations primarily relating to protection of human health and the
environment. To date, expenditures related to complying with these laws and for
remediation of existing environmental contamination have not been significant in
relation to the results of operations of CHK. There can be no assurance that the
trend of more expansive and stricter environmental legislation and regulation
will not continue.

CHK is subject to a variety of federal, state and local governmental
laws and regulations related to the storage, use, discharge and disposal of
toxic, volatile or otherwise hazardous materials. These regulations subject CHK
to increased operating costs and potential liability associated with the use and
disposal of hazardous materials. Although these laws and regulations have not
had a material adverse effect on CHK's financial condition or results of
operations, there can be no assurance that CHK will not be required to make
material expenditures in the future. Moreover, CHK

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<PAGE> 12

anticipates that such laws and regulations will become increasingly stringent in
the future, which could lead to material costs for environmental compliance and
remediation by CHK.

Any failure by CHK to obtain required permits for, control the use of,
or adequately restrict the discharge of hazardous substances under present or
future regulations could subject CHK to substantial liability or could cause its
operations to be suspended. Such liability or suspension of operations could
have a material adverse effect on CHK's business, financial condition and
results of operations.

COMPETITION

CHK operates in a highly competitive environment. CHK competes with
major and independent oil and gas companies for the acquisition of desirable oil
and gas properties, as well as for the equipment and labor required to develop
and operate such properties. Many of these competitors have financial and other
resources substantially greater than those of CHK.

RELIANCE ON KEY PERSONNEL; CONFLICTS OF INTEREST

CHK is dependent upon its Chief Executive Officer, Aubrey K. McClendon,
and its Chief Operating Officer, Tom L. Ward. The unexpected loss of the
services of either of these executive officers could have a detrimental effect
on CHK. CHK maintains $20 million key man life insurance policies on the life of
each of Messrs. McClendon and Ward. Messrs. McClendon and Ward, together with
another executive officer of CHK, have rights to participate in wells drilled by
CHK. Messrs. McClendon and Ward have elected to participate during all periods
since CHK's initial public offering in 1993 with individual interests of between
1.0% and 1.5%. Such participation may create interests which conflict with those
of CHK.

CONTROL BY CERTAIN SHAREHOLDERS

At April 17, 1998, Aubrey K. McClendon, Tom L. Ward, The Aubrey K.
McClendon Children's Trust and the Tom L. Ward Children's Trust beneficially
owned an aggregate of 24,710,827 shares (including outstanding vested options)
representing approximately 24% of outstanding CHK Common Stock, and members of
CHK's Board of Directors and executive officers, including Messrs. McClendon and
Ward and their respective children's trusts, beneficially owned an aggregate of
28,222,203 shares (including outstanding vested options), which represented 27%
of outstanding CHK Common Stock. As a result, Messrs. McClendon and Ward,
together with other executive officers and directors of CHK, are in a position
to significantly influence matters requiring the vote or consent of CHK's
shareholders.

After the issuance by CHK of an additional 5,000,000 shares in the DLB
Merger, the ownership of CHK Common Stock by Messrs. McClendon and Ward and
their respective children's trusts will decrease to 23% and the ownership of
CHK's Directors and Executive Officers as a group will decrease to approximately
26% of the issued and outstanding shares of CHK Common Stock, respectively.

SHARES AVAILABLE FOR FUTURE SALE

Subject to the restrictions described in "Selling Shareholders" and
applicable law, the Selling Shareholders are free to sell, without restrictions,
at their election, all or part of the shares of CHK Common Stock received by
such persons in connection with the DLB Merger and the AnSon Merger,
respectively. No prediction can be made as to the effect, if any, that future
sales of CHK Common Stock, or the availability of CHK Common Stock for future
sale, may have on the market price of the CHK Common Stock prevailing from time
to time. Sales of substantial amounts of CHK Common Stock or the perception that
such sales might occur could adversely affect prevailing market prices for the
CHK Common Stock.

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<PAGE> 13

USE OF PROCEEDS

The Selling Shareholders, not CHK, will receive the proceeds from the
sale by the Selling Shareholders of the Offered Shares.

SELLING SHAREHOLDERS

The following table sets forth (i) the name of each of the Selling
Shareholders, (ii) the number of shares of CHK Common Stock beneficially owned
by each Selling Shareholder prior to the offering and being offered hereby, and
(iii) the number of shares of CHK Common Stock beneficially owned by each
Selling Shareholder after completion of the offering.

SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING (1) SHARES
----------------------------- BENEFICIALLY
NUMBER PERCENT SHARES OWNED
OF OF BEING AFTER
SELLING SHAREHOLDER SHARES CLASS (2) OFFERED OFFERING(1)
------------------- --------- --------- --------- ------------
<S> <C> <C> <C> <C>
AnSon Partners Limited 3,792,724 3.6% 3,792,724 0
Partnership
Charles E. Davidson 2,890,405 2.7% 2,890,405 0
--------- --- ---------
Total: 6,683,129 6.3% 6,683,129
========= === =========
</TABLE>
- ----------------------

(1) Assumes that all of the shares of CHK Common Stock held by the Selling
Shareholders are sold and that the Selling Shareholders acquire no
additional shares of CHK Common Stock prior to completion of this
offering.

(2) Including the 5,000,000 shares of CHK Common Stock to be issued in
connection with the DLB Merger.

DAVIDSON REGISTRATION RIGHTS AGREEMENT. As a condition to the DLB
Merger Agreement, CHK entered into a Registration Rights Agreement, as amended,
with Davidson (the "Davidson Registration Rights Agreement"), a copy of which is
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part. Pursuant to the Davidson Registration Rights
Agreement, CHK has agreed to file a registration statement for the Davidson
Shares and to maintain the registration statement continuously effective until
the later to occur of (i) 90 days after the DLB Merger and (ii) 30 days after
the Hugoton Merger. Additionally, if CHK at any time proposes to register any of
its equity securities under the Securities Act (subject to limitations in the
Davidson Registration Rights Agreement) on a form and in a manner that would
permit registration of Davidson's Shares, Davidson will have the right to
request that CHK register any shares of CHK Common Stock owned by Davidson that
he requests be registered (the "Piggyback Registration Right"). Davidson's
Piggyback Registration Right is subject to limitations referred to in the
Davidson Registration Rights Agreement, including the priority of the shares to
be sold by CHK in such registration if the underwriters in any offering inform
CHK that the amount of shares that can be sold in such offering is less than the
amount of shares to be registered by CHK and requested to be registered by the
Selling Shareholder. In such case, CHK's shares have priority and the shares
owned by Davidson will be included along with all other shares to be registered
by other shareholders exercising similar piggyback registration rights on a pro
rata basis.

In addition to the provisions mentioned above, the Davidson
Registration Rights Agreement includes provisions on the registration terms and
procedures to be followed, the indemnification of CHK by Davidson, or vice
versa, and contribution with regards to any loss incurred by either party
pursuant to action taken under the Davidson Registration Rights Agreement,
notices of claims, and the payment of fees and expenses associated with
registration.

Prior to the consummation of the DLB Merger, Davidson was a member of
the DLB Board and DLB's largest shareholder, owning approximately 57.7% of
issued and outstanding Common Stock of DLB.

ANSON REGISTRATION RIGHTS AGREEMENT. As a condition to the AnSon Merger
Agreement, CHK entered into a Registration Rights Agreement with AnSon (the
"AnSon Registration Rights Agreement"), a copy of which is

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<PAGE> 14

incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part. Pursuant to the AnSon Registration Rights Agreement,
CHK has agreed to file a shelf registration for the shares issued to AnSon and
to maintain the registration statement continuously effective until the first to
occur of (i) 5:00 p.m. Oklahoma City time on March 31, 1999; or (ii) the date
that AnSon sells or transfers all of the securities to be registered pursuant to
the AnSon Registration Rights Agreement.

In addition to the provisions mentioned above, the AnSon Registration
Rights Agreement includes provisions on the registration terms and procedures to
be followed, restrictions on the sale of shares other than pursuant to the AnSon
Registration Rights Agreement, the indemnification of CHK by AnSon, or vice
versa, notice of claims and contribution with regards to any loss incurred by
either party pursuant to action taken under the AnSon Registration Rights
Agreement, notices of claims, and the payment of fees and expenses associated
with registration.

ANSON PRICE GUARANTEE. Pursuant to the AnSon Merger Agreement, CHK
acquired AnSon for a total consideration of $43 million, consisting of (i) the
issuance of 3,792,724 shares of CHK Common Stock and (ii) cash in an amount to
be determined by the difference of the per share net proceeds received by AnSon
from the sale of the AnSon Shares multiplied by the number of AnSon Shares
actually sold during a 30-day period commencing on that day of April 1998 on
which AnSon Shares are first sold and the agreed value of such AnSon Shares,
which was determined to be $11.3375 per share. Assuming net proceeds to AnSon of
$5.625 per share of CHK Common Stock (the closing price of CHK Common Stock on
April 9, 1998), the cash amount payable by CHK to AnSon would have been
approximately $21.7 million. To receive the full cash payment, all AnSon Shares
will have to be sold by AnSon within such 30-day period.

THE COMPANY

CHK is an independent oil and gas company engaged in the exploration,
production, development and acquisition of oil and natural gas in major onshore
producing areas of the United States and Canada.

CHK has acquired or has agreed to acquire a substantial amount of
proved oil and gas reserves through mergers and acquisitions of oil and gas
properties. Since October 1997, CHK has entered into 10 transactions to acquire
approximately 716 Bcfe of estimated proved reserves at an estimated cost of $717
million (including associated debt to be assumed and the value attributable to
shares of CHK Common Stock to be issued, but excluding the value attributable to
other assets, such as gathering systems, processing plants and other items). Of
these transactions, one was closed in December 1997, three were closed in the
first quarter of 1998 and six are pending. For a more detailed description of
these transactions, see "Recent and Pending Acquisitions" in Item 1. "Business"
of CHK's Transition Report on Form 10-K, which is incorporated by reference
herein.

CHK's executive offices are located at 6100 North Western Avenue,
Oklahoma City, Oklahoma 73118, and its telephone number at that location is
(405) 848-8000.

For additional information concerning CHK and its subsidiaries, see
"Available Information."

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<PAGE> 15

SECURITY OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS

The table below sets forth as of March 31, 1998 (i) the name and
address of each person beneficially owning 5% or more of CHK's outstanding CHK
Common Stock, the number of shares beneficially owned by each such shareholder
and the percentage of outstanding shares owned and (ii) the number and
percentage of outstanding shares of CHK Common Stock beneficially owned by each
of the directors and executive officers and by all directors and executive
officers of CHK as a group. Unless otherwise noted, the persons named below have
sole voting and investment power with respect to such shares.

<TABLE>
<CAPTION>
CHK COMMON STOCK
--------------------------------
BENEFICIAL OWNER NUMBER OF SHARES % OF CLASS
- ---------------- ---------------- ----------
<S> <C> <C>
Tom L. Ward*+...................................................... 11,333,751(a)(b) 11%
6100 North Western Avenue, Oklahoma City, OK 73118
Aubrey K. McClendon*+.............................................. 11,069,376(b)(c) 11%
6100 North Western Avenue, Oklahoma City, OK 73118
Pilgrim Baxter & Associates........................................ 6,083,008(d) 6%
1255 Drummers Lane, Wayne, PA 19087-1590
Floyd C. Wilson.................................................... 5,205,527(e) 5%
8400 Killarney, Wichita, Kansas 67206
Shannon T. Self*................................................... 2,735,748(f) 3%
E. F. Heizer, Jr.*................................................. 1,058,150(g) 1%
Frederick B. Whittemore*........................................... 859,550(h) **
Steven C. Dixon+................................................... 428,573(b)(i) **
Walter C. Wilson*.................................................. 251,750(j) **
Breene M. Kerr*.................................................... 204,500(k) **
J. Mark Lester+.................................................... 114,202(b)(l) **
Marcus C. Rowland+................................................. 101,171(b)(m) **
Henry J. Hood+..................................................... 25,089(b)(n) **
All directors and executive officers as a group.................... 28,222,203(o) 27%
</TABLE>
- ----------------------
* Director
+ Executive officer of CHK
** Less than 1%
(a) Includes 1,846,860 shares held by TLW Investments, Inc., an Oklahoma
corporation of which Mr. Ward is sole shareholder and chief executive
officer, and 909,000 shares which may be acquired pursuant to currently
exercisable stock options granted by CHK.
(b) Includes shares purchased on behalf of the executive officer in the
Chesapeake Energy Corporation Savings and Incentive Stock Bonus Plan
(Tom L. Ward, 6,701 shares; Aubrey K. McClendon, 3,544 shares; Steven
C. Dixon, 1,451 shares; Marcus C. Rowland, 2,565 shares; J. Mark
Lester, 1,434 shares and Henry J. Hood, 1,520 shares).
(c) Includes 508,560 shares held by Chesapeake Investments, an Oklahoma
limited partnership of which Mr. McClendon is sole general partner, and
594,000 shares which may be acquired pursuant to currently exercisable
stock options granted by CHK.
(d) Based on information provided in the January 31, 1998 Schedule 13G as
filed with the SEC. (e) Based on information provided in the March 18,
1998 Schedule 13D as filed with the SEC. (f) Includes 2,382 shares held
by Pearson Street Limited Partnership, an Oklahoma limited partnership
of which Mr. Self is a general partner and the remaining partners are
members of Mr. Self's immediate family sharing the same household;
1,098,600 shares held by Mr. Self as trustee of the Aubrey K. McClendon
Children's Trust, 1,209,100 shares held by Mr. Self as trustee of the
Tom L. Ward Children's Trust and 425,666 shares which Mr. Self has the
right to acquire pursuant to currently exercisable stock options
granted by CHK.
(g) Includes 348,500 shares subject to currently exercisable stock options
granted to Mr. Heizer by CHK.
(h) Includes 41,700 shares held by Mr. Whittemore as trustee of the
Whittemore Foundation and 377,750 shares subject to currently
exercisable stock options granted to Mr. Whittemore by CHK.
(i) Includes 424,122 shares subject to currently exercisable stock options
granted to Mr. Dixon by CHK.
(j) Includes 251,750 shares subject to currently exercisable stock options
granted to Mr. Wilson by CHK.
(k) Includes 31,250 shares subject to currently exercisable stock options
granted to Mr. Kerr by CHK.
(l) Includes 108,268 shares subject to currently exercisable stock options
granted to Mr. Lester by CHK.
(m) Includes 40,500 shares subject to currently exercisable stock options
granted to Mr. Rowland by CHK.
(n) Includes 21,375 shares subject to currently exercisable stock options
granted to Mr. Hood by CHK.
(o) Includes shares subject to options which are currently exercisable.

-11-

<PAGE> 16

PLAN OF DISTRIBUTION

Any distribution of the Davidson Shares or the AnSon Shares by Davidson
or AnSon, respectively, or by pledgees, donees, transferees or other successors
in interest, may be effected from time to time in one or more of the following
transactions (which may involve crosses or block transactions) directly by the
respective Selling Shareholder, or through agents, brokers, dealers or
underwriters to be designated from time to time. Such distribution may be
effected: (i) on the NYSE (or on such other national stock exchanges on which
the CHK Common Stock may be listed from time to time) in transactions which may
include special offerings, exchange distributions and/or secondary distributions
pursuant to and in accordance with the rules of such exchanges, including sales
to underwriters who will acquire the Offered Shares for their own account and
resell them in one or more transactions or through brokers, acting as principal
or agent, (ii) in the over-the-counter market, including sales through brokers,
acting as principal or agent, (iii) in transactions other than on such exchanges
or in the over-the-counter market, (iv) through the issuance of securities by
issuers other than CHK convertible into, exchangeable for, or payable in such
shares (whether such securities are listed on a national securities exchange or
otherwise), (v) through the writing of options on the Offered Shares (whether
such options are listed on an options exchange or otherwise), (vi) in a
combination of such methods or (vii) by any other legally available means. Any
such transactions may be effected at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at negotiated prices
or at fixed prices.

Davidson, AnSon and any such underwriters, brokers, dealers or agents,
upon effecting the sale of the Offered Shares may be deemed "underwriters" as
that term is defined by the Securities Act.

Underwriters participating in any offering made pursuant to this
Prospectus (as amended or supplemented from time to time) may receive
underwriting discounts and commissions, and discounts or concessions may be
allowed or reallowed or paid to dealers, and brokers or agents participating in
such transactions may receive brokerage or agent's commissions or fees.

In order to comply with the securities laws of certain states, if
applicable, the Offered Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Offered Shares may not be sold unless the Offered Shares have been registered or
qualified for sale in such state or any exemption from registration or
qualification is available and complied with.

Pursuant to the Davidson Registration Rights Agreement, CHK agreed to
file a registration statement to include a prospectus that would permit Davidson
to sell the Davidson Shares without restriction and to keep the registration
statement continuously effective until the later to occur of (i) 90 days after
the DLB Merger and (ii) 30 days after the Hugoton Merger. CHK has agreed to pay
all expenses in connection with such registration and Davidson will bear the
underwriting discounts, commissions and transfer taxes, if any. CHK and Davidson
have agreed to indemnify each other and certain other persons against certain
liabilities in connection with the offering of the Davidson Shares including
liabilities arising under the Securities Act.

Pursuant to the AnSon Registration Rights Agreement, CHK agreed to file
a shelf registration to include a prospectus that would permit AnSon to sell the
AnSon Shares without restriction and to keep the registration statement
continuously effective for the first to occur of (i) 5:00 p.m. Oklahoma City
time on March 31, 1999 and (ii) the date that AnSon sells or transfers all of
the securities to be registered pursuant to the AnSon Registration Rights
Agreement. CHK has agreed to pay all registration expenses in connection with
such registration and AnSon will pay all selling expenses. To the extent that
the AnSon Shares are sold within a certain 30-day period at a net price of less
than $11.3375 per share, Chesapeake will be obligated pursuant to the AnSon
Merger Agreement to pay to AnSon cash in the amount of the AnSon Price
Guarantee. Such cash payment will effectively reimburse AnSon for all or a
portion of the underwriting discounts and commissions, if any, incurred by AnSon
in connection with such sale of such AnSon Shares. See "Summary - AnSon Price
Guarantee" and "Selling Shareholders." CHK and AnSon have agreed to indemnify
each other and certain other persons against certain liabilities in connection
with the offering of the AnSon Shares including liabilities arising under the
Securities Act.

-12-

<PAGE> 17

LEGAL MATTERS

The legality of the CHK Common Stock offered hereby will be passed upon
for CHK by Andrews & Kurth L.L.P., Houston, Texas.

EXPERTS

The consolidated financial statements of CHK as of June 30, 1997 and
1996 and for the six months ended December 31, 1997 and each of the two years in
the period ended June 30, 1997, incorporated by reference in this Prospectus,
have been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.

The consolidated financial statements of CHK for the year ended June
30, 1995, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.

Effective July 1, 1996, Price Waterhouse LLP sold its Oklahoma City
practice to Coopers & Lybrand L.L.P. and resigned as CHK's independent
accountants.

Certain estimates of oil and gas reserves included and incorporated by
reference herein were based upon engineering studies prepared by Williamson
Petroleum Consultants, Inc., Porter Engineering Associates and Netherland,
Sewell & Associates, Inc., independent petroleum engineers. Such estimates are
included or incorporated herein in reliance on the authority of such firm as
experts in such matters.

-13-

<PAGE> 18

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

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY CHESAPEAKE ENERGY CORPORATION, THE SELLING
SHAREHOLDERS OR ANY UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF CHESAPEAKE ENERGY CORPORATION
SINCE SUCH DATE.

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

TABLE OF CONTENTS

PAGE

Available Information............................ i
Cautionary Statement Regarding
Forward-Looking Statements................... i
Incorporation of Documents by Reference.......... ii
Summary.......................................... 1
Risk Factors..................................... 3
Use of Proceeds.................................. 9
Selling Shareholders............................. 9
The Company...................................... 10
Security Ownership of Directors, Officers
and Certain Beneficial Owners................ 11
Plan of Distribution............................. 12
Legal Matters.................................... 13
Experts.......................................... 13

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

6,683,129 SHARES

CHESAPEAKE ENERGY
CORPORATION

COMMON STOCK

PROSPECTUS

, 1998

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

<PAGE> 19

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following are the estimated expenses (except for the Commission
filing fee) of the issuance and distribution of the securities being registered
payable by CHK. None of such expenses will be paid by Davidson or AnSon.

Securities and Exchange Commission Registration Fee............. $10,782
Accountants' fees and expenses.................................. $10,000
Counsel fees and expenses....................................... $20,000
Miscellaneous................................................... $ 9,218
-------
Total................................................... $50,000
=======
</TABLE>

The Registrant has agreed to bear all expenses in connection with the
registration of the shares being offered by the Selling Shareholders. The
Selling Shareholders will bear any underwriting discounts, commissions and
transfer taxes, if any, associated with the sale of the Offered Shares. The
Registrant has agreed to indemnify the Selling Shareholders against certain
liabilities including liabilities under the Securities Act.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The OGCA permits a corporation to indemnify officers, directors,
employees and agents for actions taken in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interest of the
corporation, and with respect to any criminal action, which they had no
reasonable cause to believe was unlawful. The OGCA also provides that a
corporation may advance expenses of defense (upon receipt of a written
undertaking to reimburse the corporation if indemnification is not appropriate)
and must reimburse a successful defendant for expenses, including attorney's
fees, actually and reasonably incurred, and permit a corporation to purchase and
maintain liability insurance for its directors and officers.

The CHK Charter and Bylaws provide that the corporation shall indemnify
any person who is or was made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture or other enterprise, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, including attorney fees, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation; and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action proceeding, had reasonable cause to believe that such person's
conduct was unlawful.

Additionally, pursuant to the CHK Bylaws with respect to derivative
proceedings, no indemnification shall be made in respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to such
corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability, but, in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper. The OGCA also provides that any indemnification, unless
ordered by a court, shall be made by the corporation upon a determination that
indemnification of such party is proper because such party has met the
applicable standard of conduct. Such determination may be made (1) by the board
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding; (2) if such quorum is not obtainable (or even
if obtainable) and a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion; or (3) by the shareholders.

II-1

<PAGE> 20
Director Liability. The OGCA permits a corporation to include a
provision in its certificate of incorporation eliminating or limiting the
personal liability of a director to the corporation or its shareholders for
damages for breach of the director's fiduciary duty subject to certain
limitations. The CHK Charter includes such a provision, as set forth below.

The CHK Charter provides that a director will not be personally liable
to the corporation or its shareholders for damages for breach of fiduciary duty
as director, except for personal liability (i) for acts or omissions by such
director not in good faith or which involve intentional misconduct or a knowing
violation of law; (ii) under Section 1053 of the OGCA, which concerns unlawful
payments of dividends, stock purchases or redemption; (iii) for any breach of
the director's duty of loyalty to the corporation or its shareholders; or (iv)
for any transaction from which the director derived improper benefit. While
these provisions provide directors with protection from liability for monetary
damages for breaches of their duty of care, they do not eliminate such duty.
Accordingly, these provisions will have no effect on the availability of
equitable remedies such as an injunction or rescission based on a director's
breach of his or her duty of care. The provisions described above apply to an
officer of the corporation only if he or she is a director of the corporation
and is acting in his or her capacity as director, and do not apply to officers
of the corporation who are not directors.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit
Number Description of Exhibits
------- -----------------------

2.1 Agreement and Plan of Merger, dated as of November 12, 1997, among
Chesapeake Energy Corporation, Chesapeake Merger Corp., and DLB Oil
& Gas, Inc. (incorporated herein by reference to Exhibit 2.1 to
Registrant's Registration Statement on Form S-4 (File No.
333-48735)).

2.2 Amendment No. 1, dated as of December 22, 1997, to the Agreement and
Plan of Merger among Chesapeake Energy Corporation, Chesapeake
Merger Corp., and DLB Oil & Gas, Inc. (incorporated herein by
reference to Exhibit 2.2 to Registrant's Registration Statement on
Form S-4 (File No. 333-48735)).

2.3 Amendment No. 2, dated as of February 11, 1998, to the Agreement and
Plan of Merger among Chesapeake Energy Corporation, Chesapeake
Merger Corp., and DLB Oil & Gas, Inc. (incorporated herein by
reference to Exhibit 2.2 to Registrant's Registration Statement on
Form S-4 (File No. 333-48735)).

2.4 Amendment No. 3, dated as of March 24, 1998, to the Agreement and
Plan of Merger among Chesapeake Energy Corporation, Chesapeake
Merger Corp., and DLB Oil & Gas, Inc. (incorporated herein by
reference to Exhibit 2.3 to Registrant's Registration Statement on
Form S-4 (File No. 333-48735)).

2.5 Merger Agreement, dated as of October 22, 1997, among Chesapeake
Energy Corporation, Chesapeake Merger II Corp. and AnSon Partners
Limited Partnership.*

2.6 Amendment No. 1, dated as of December 15, 1997, to the Merger
Agreement among Chesapeake Energy Corporation, Chesapeake Merger II
Corp. and AnSon Partners Limited Partnership.*

3.1 Certificate of Incorporation of Chesapeake Energy Corporation
(incorporated herein by reference to Exhibit 3.1 to Registrant's
transition report on Form 10-K for the six months ended December 31,
1997).

3.2 Bylaws of Chesapeake Energy Corporation (incorporated herein by
reference to Exhibit 3.2 to Registrant's registration statement on
Form 8-B (No. 001-137200)).

4.1 Registration Rights Agreement, dated as of October 22, 1997, by and
between Chesapeake Energy Corporation and Charles E. Davidson
(incorporated herein by reference to Exhibit 4.9 to Registrant's
Registration Statement on Form S-4 (File No. 333-48735).

4.2 Amendment No. 1, dated as of December 23, 1997, to the Registration
Rights Agreement, by and between Chesapeake Energy Corporation and
Charles E. Davidson (incorporated herein by reference to Exhibit
4.10 to Registrant's Registration Statement on Form S-4 (File No.
333-48735)).

II-2

<PAGE> 21

4.3 Registration Rights Agreement, dated as of December 16, 1997, by and
between Chesapeake Energy Corporation and AnSon Partners Limited
Partnership (incorporated by reference to Exhibit 4.12 to
Registrant's Registration Statement on Form S-4 (File No.
333-48735)).

4.4 Registration Rights Agreement, dated as of March 10, 1998, among
Chesapeake Energy Corporation and former shareholders of Hugoton
Energy Corporation (incorporated by reference to Exhibit 4.11 to
Registrant's Registration Statement on Form S-4 (File No.
333-48735)).

5.1 Opinion of Andrews & Kurth L.L.P. regarding the legality of the
securities to be registered.*

23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).

23.2 Consent of Coopers & Lybrand L.L.P.*

23.3 Consent of Price Waterhouse LLP.*

23.4 Consent of Williamson Petroleum Consultants.*

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

23.6 Consent of Porter Engineering Associates.*

24.1 Powers of Attorney (included in the signature pages of this
Registration Statement).

- ---------------------
* Filed herewith

ITEM 17. UNDERTAKINGS.

The undersigned 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:

(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;

(ii) 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 a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;

(iii) 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. Provided, however, that paragraphs (1)(i) and
(1)(ii) do not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration
statement.

(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; and

II-3

<PAGE> 22
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the 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.

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the 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, the 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 Act and will be governed by the final adjudication of
such issue.

II-4
<PAGE> 23

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and 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 20, 1998.

CHESAPEAKE ENERGY CORPORATION

By: /s/ Aubrey K. McClendon
-------------------------------------
Aubrey K. McClendon
Chairman of the Board
and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Chesapeake Energy Corporation hereby constitutes and appoints
Aubrey K. McClendon, Tom L. Ward and Marcus C. Rowland, and each of them, his
true and lawful attorney-in-fact and agent, with full power to act without the
other and with full power of substitution and resubstitution, for him and on his
behalf and in his name, place and stead, in any and all capacities, to sign,
execute and file with the Securities and Exchange commission and any state
securities regulatory board or commission any documents relating to the proposed
issuance and registration of the securities offered pursuant to this
Registration Statement on Form S-3 under the Securities Act, including, any and
all amendments (including post-effective amendments and amendments thereto) to
this Registration Statement on Form S-3 and any registration statement for the
same offering that is to be effective upon the filing pursuant to rule 462(b)
under the Securities Act, with all exhibits and any and all documents required
to be filed with respect thereto, with any regulatory authority, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises in order to effectuate the same as fully to all
intents and purposes as he himself might or could do if personally present,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done.

Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities indicated.

<TABLE>
<CAPTION>
Name Title Date
- ----- ----- ----
<S> <C> <C>

/s/ Aubrey K. McClendon Chairman of the Board of Directors, April 20, 1998
- ------------------------------------------
Aubrey K. McClendon Chief Executive Officer and Director
(Principal Executive Officer)

/s/ Tom L. Ward President, Chief Operating Officer April 20, 1998
- ------------------------------------------
Tom L. Ward and Director (Principal Executive Officer)

/s/ Marcus C. Rowland Executive Vice President and April 20, 1998
- ------------------------------------------
Marcus C. Rowland Chief Financial Officer
(Principal Financial Officer)

/s/ Ronald A. Lefaive Senior Vice President - April 20, 1998
- ------------------------------------------
Ronald A. Lefaive Accounting, Controller and
Chief Accounting Officer
(Principal Accounting Officer)

/s/ Edgar F. Heizer, Jr. Director April 20, 1998
- ------------------------------------------
Edgar F. Heizer, Jr.

/s/ Breene M. Kerr Director April 20, 1998
- ------------------------------------------
Breene M. Kerr

/s/ Shannon T. Self Director April 20, 1998
- ------------------------------------------
Shannon T. Self

/s/ Frederick B. Whittemore Director April 20, 1998
- ------------------------------------------
Frederick B. Whittemore

/s/ Walter C. Wilson Director April 20, 1998
- ------------------------------------------
Walter C. Wilson
</TABLE>

<PAGE> 24

EXHIBIT INDEX

Exhibit
Number Description of Exhibits
------- -----------------------

2.1 Agreement and Plan of Merger, dated as of November 12, 1997, among
Chesapeake Energy Corporation, Chesapeake Merger Corp., and DLB Oil &
Gas, Inc. (incorporated herein by reference to Exhibit 2.1 to
Registrant's Registration Statement on Form S-4 (File No. 333-48735)).

2.2 Amendment No. 1, dated as of December 22, 1997, to the Agreement and
Plan of Merger among Chesapeake Energy Corporation, Chesapeake Merger
Corp., and DLB Oil & Gas, Inc. (incorporated herein by reference to
Exhibit 2.2 to Registrant's Registration Statement on Form S-4 (File
No. 333-48735)).

2.3 Amendment No. 2, dated as of February 11, 1998, to the Agreement and
Plan of Merger among Chesapeake Energy Corporation, Chesapeake Merger
Corp., and DLB Oil & Gas, Inc. (incorporated herein by reference to
Exhibit 2.2 to Registrant's Registration Statement on Form S-4 (File
No. 333-48735)).

2.4 Amendment No. 3, dated as of March 24, 1998, to the Agreement and Plan
of Merger among Chesapeake Energy Corporation, Chesapeake Merger Corp.,
and DLB Oil & Gas, Inc. (incorporated herein by reference to Exhibit
2.3 to Registrant's Registration Statement on Form S-4 (File No.
333-48735)).

2.5 Merger Agreement, dated as of October 22, 1997, among Chesapeake Energy
Corporation, Chesapeake Merger II Corp. and AnSon Partners Limited
Partnership.*

2.6 Amendment No. 1, dated as of December 15, 1997, to the Merger Agreement
among Chesapeake Energy Corporation, Chesapeake Merger II Corp. and
AnSon Partners Limited Partnership.*

3.2 Bylaws of Chesapeake Energy Corporation (incorporated herein by
reference to Exhibit 3.2 to Registrant's registration statement on
Form 8-B (No. 001-137200)).

4.2 Amendment No. 1, dated as of December 23, 1997, to the Registration
Rights Agreement, by and between Chesapeake Energy Corporation and
Charles E. Davidson (incorporated herein by reference to Exhibit 4.10
to Registrant's Registration Statement on Form S-4 (File No.
333-48735)).

4.3 Registration Rights Agreement, dated as of December 16, 1997, by and
between Chesapeake Energy Corporation and AnSon Partners Limited
Partnership (incorporated by reference to Exhibit 4.12 to Registrant's
Registration Statement on Form S-4 (File No. 333-48735)).

4.4 Registration Rights Agreement, dated as of March 10, 1998, among
Chesapeake Energy Corporation and former shareholders of Hugoton Energy
Corporation (incorporated by reference to Exhibit 4.11 to Registrant's
Registration Statement on Form S-4 (File No. 333-48735)).

5.1 Opinion of Andrews & Kurth L.L.P. regarding the legality of the
securities to be registered.*

23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).

23.2 Consent of Coopers & Lybrand L.L.P.*

23.3 Consent of Price Waterhouse LLP.*

23.4 Consent of Williamson Petroleum Consultants.*

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

23.6 Consent of Porter Engineering Associates.*

24.1 Powers of Attorney (included in the signature pages of this
Registration Statement).

- -------------------
* Filed herewith

<PAGE> 1
EXHIBIT 2.5

MERGER AGREEMENT AND
PLAN OF REORGANIZATION

AMONG

CHESAPEAKE ENERGY CORPORATION,

CHESAPEAKE MERGER II CORP.

AND

ANSON PARTNERS LIMITED PARTNERSHIP

OCTOBER 22, 1997

<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Certificate of Incorporation and Bylaws of the Surviving Corporation . . . . . . . . . . . . . . . . 2
1.5 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Payment and Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Payment; Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9 Adjustment to Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3. Representations and Warranties of AP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

3.1 Organization, Good Standing, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Capital Stock of APC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 The Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 No Breach of Statute or Contract; Governmental Authorizations . . . . . . . . . . . . . . . . . . . 6
3.5 Authorization of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.8 Prior Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.9 Title to the Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.10 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.11 Oil and Gas Leases in Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.13 Claims or Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.14 Contracts, Consents and Preferential Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.15 Tax Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.16 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.17 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.19 Planned Future Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.20 Environmental and Safety Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.21 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.22 Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.23 Plugging Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.24 Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.25 Payout Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.26 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.27 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>

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4. Representations and Warranties of the CEC Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

4.1 Organization, Good Standing, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Capital Stock of CEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 No Breach of Statute or Contract; Governmental Authorizations . . . . . . . . . . . . . . . . . . . 12
4.5 Authorization of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.7 The Oklahoma Act Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.8 No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.11 Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5. Conduct and Transactions Prior to Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5.1 Investigation by AP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Investigation by CEC/Operation of Business of the AP Group . . . . . . . . . . . . . . . . . . . . . 14
5.3 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

5.3.1 Status of Active Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3.2 Status of Active Employees with CEC Group . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.3.3 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

5.4 Salaries and Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

5.4.1 AP's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4.2 CEC Group's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4.3 CEC Employee Benefit Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4.4 Preexisting Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4.5 AP Group's Retirement and Savings Plans . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4.6 WARN Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

5.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6 Conduct of Business by the CEC Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

6. Conditions to Obligations of the CEC Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

6.1 Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.7 Transfer of the Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.8 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.9 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.10 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>

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7. Conditions to Obligations of AP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

7.1 Resolutions of Boards of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.3 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.4 Statutory Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.5 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.6 Registration Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.8 Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

8. Termination of Agreement and Abandonment of Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . 24

8.1 Mutual Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 By CEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 By AP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 By Either CEC or AP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.5 Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

9. Additional Agreements of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

9.1 Closing/Post Closing Working Capital Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . 25

9.1.1 Net Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1.2 Actual Net Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1.3 Agreement on Conclusive Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

9.2 Production Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.3 Royalty, Working Interest and Tax Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Intercompany Payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.5 Schedule Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.6 Tax Return and Reorganization Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.7 Preservation of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

10. General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

10.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.2 Survival of Covenants, Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 28
10.3 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Survival and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

10.4.1 Indemnification Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.4.2. Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

10.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.7 No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>

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10.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.12 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.13 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.14 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.15 Partial Illegality or Unenforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>

SCHEDULES

"3.3.1" Oil and Gas Properties Description
"3.3.6" Excluded Assets Description
"3.4" Governmental and Contractual Violations
"3.8" Contractual Obligations Disclosures
"3.9" Title Exceptions and Production Payments Information
"3.10" Legal Compliance Disclosures
"3.11" Oil and Gas Leases Exceptions
"3.13" Claims and Litigation Disclosures
"3.14" Contracts, Consents and Preferential Rights Disclosures
"3.15" Tax Partnerships Disclosures
"3.16" Liabilities Disclosures
"3.19" Future Commitments Disclosures
"3.20" Environmental and Safety Matters Disclosures
"3.25" Payout and Balancing Disclosures
"4.9" CEC Consents and Approvals Disclosures
"4.10" CEC Litigation Disclosures
"5.3.1" Active Employees List
"5.3.3" Employee Benefit Plans Disclosure
"9.1.1" Capital Costs to Develop Proved Undeveloped Reserves

EXHIBITS

"1.2" Form of Certificate of Merger
"1.9" Form of Registration Rights Agreement
"6.8.1" Form of Goodwill Protection Agreement
"6.8.2" Form of Sublease and Use Agreement

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MERGER AGREEMENT AND
PLAN OF REORGANIZATION

THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION (the
"Agreement"), is entered into this 22nd day of October, 1997, among CHESAPEAKE
ENERGY CORPORATION, an Oklahoma corporation ("CEC"), CHESAPEAKE MERGER II
CORP., an Oklahoma corporation ("CMC"), ANSON PARTNERS LIMITED PARTNERSHIP, an
Oklahoma limited partnership ("AP") and ANSON PRODUCTION CORPORATION, an
Oklahoma corporation ("APC").

R E C I T A L S :

A. AP owns one hundred percent (100%) of the capital stock of APC and as
of the Closing Date (hereinafter defined) APC will own and conduct as an
ongoing concern all of the exploration and production of oil and gas business
of AP and its affiliates (the "Oil and Gas Business"), which includes all of
the producing and non-producing Interests (hereinafter defined) of AP and its
affiliates as set forth in Section 3.3 hereof. AP and AP's partners and
affiliates including, without limitation, APC are referred to collectively
herein as the "AP Group."

B. CMC is a wholly owned subsidiary of CEC. CEC and CMC are referred to
collectively herein as the "CEC Group."

C. The CEC Group and all of the limited and general partners of AP (the
"Partners") deem it advisable and in the best interests of the CEC Group's
shareholders and AP's Partners that CMC use shares of CEC common stock, par
value of $0.01 per share (the "CEC" Common Stock") to effect the merger of APC
into CMC (the "Merger") pursuant to this Agreement and the applicable
provisions of the Oklahoma General Corporation Act (the "Oklahoma Act").

D. Upon consummation of the Merger pursuant to this Agreement, all of the
issued and outstanding capital stock of APC (the "APC Shares") will be
converted into a number of shares of CEC Common Stock as determined in
accordance with the terms of this Agreement.

E. The CEC Group and the AP Group, respectively, have approved and
adopted this Agreement with respect to the Merger as a transaction that
qualifies as a tax free reorganization under the provisions of Section
368(a)(2)(D) of the Internal Revenue Code of 1986, as amended (the "Code").

NOW, THEREFORE, for and in consideration of the recitals and
the mutual covenants and agreements set forth in this Agreement and for the
purpose of prescribing the terms and conditions for the Merger, the parties
hereby agree as follows:
<PAGE> 7
1. Merger. The Merger will be consummated as follows:

1.1 The Merger. In accordance with the Oklahoma Act, on the
Closing Date (as defined in Section 2 below), APC will be
merged with and into CMC, in a transaction intended to
qualify as a tax free reorganization under Section
368(a)(2)(D) of the Code. Immediately following the
Merger, the separate corporate existence of APC will cease
and CMC, as the surviving corporation (the "Surviving
Corporation"), will continue to exist under and be governed
by the Oklahoma Act as an indirect, wholly-owned subsidiary
of CEC.

1.2 Certificate of Merger. As soon as practicable after the
satisfaction or waiver of all of the conditions to the
Merger, at the Closing (as defined in Section 2), the
parties shall cause the Merger to be consummated by causing
a Certificate of Merger (the "Filed Agreement")
substantially in the form of Exhibit 1.2, to be executed
and filed in accordance with the relevant provisions of the
Oklahoma Act.

1.3 Effects of the Merger. The Merger shall have the effect
set forth in Section 1081 of the Oklahoma Act. Without
limiting the generality of the foregoing, at the Effective
Time, (as defined in Section 2) all the properties, rights,
privileges, powers and franchises of APC and CMC shall vest
in the Surviving Corporation, and all debts, liabilities
and duties of APC and CMC shall become the debts,
liabilities and duties of the Surviving Corporation in the
same manner as if the Surviving Corporation had itself
incurred them.

1.4 Certificate of Incorporation and Bylaws of the Surviving
Corporation. The Certificate of Incorporation of CMC, as
in effect immediately prior to the Closing Date, shall be
the Certificate of Incorporation of the Surviving
Corporation, until thereafter amended in accordance with
the provisions thereof and applicable law. The Bylaws of
CMC in effect at the Closing Date shall be the Bylaws of
the Surviving Corporation until amended in accordance with
the provisions thereof and applicable law.

1.5 Directors. The directors of CMC immediately prior to the
Closing Date shall be the directors of the Surviving
Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier
death, resignation or removal.

1.6 Officers. The officers of CMC immediately prior to the
Effective Time shall be the officers of the Surviving
Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier
death, resignation or removal.

1.7 Payment and Conversion. Subject to the terms and
conditions of this Agreement, on the Closing Date, pursuant
to the Oklahoma Act, APC will be merged with and into CMC
and upon such Merger, the APC Shares will be automatically
converted into the right to receive the number of shares of
CEC

2
<PAGE> 8
Common Stock determined by dividing FORTY-THREE MILLION
DOLLARS ($43,000,000.00) by the Exchange Price (the
"Exchange Shares"). The Exchange Price will be determined
by adding the closing price of the CEC Common Stock as
quoted on the New York Stock Exchange as of the close of
business on the third (3rd) through the twelfth (12th)
business trading days preceding the Closing Date and
dividing the sum by ten (10). The number of Exchange
Shares will be rounded up to the nearest whole number and
no fractional shares will be issued.

1.8 Payment; Stock Certificates. On the Closing Date, AP will
surrender all certificates evidencing the APC Shares and
deliver them to CMC and CMC will cause the Exchange Shares
to be registered in AP's name in one or more certificates,
as reasonably requested by AP, and deliver it or them to
AP. After the Closing Date and until delivered to CMC, the
APC Shares will be deemed to represent only the right to
receive, upon surrender, the portion attributable thereto
of the Exchange Shares.

1.9 Adjustment to Merger Consideration. CEC and AP hereby
agree that in connection with the sale of any Exchange
Shares pursuant to a Piggyback Registration occurring prior
to April 30, 1998, or a Requested Registration requested
prior to April 30, 1998, as set forth in the Registration
Rights Agreement attached hereto as Exhibit 1.9 (the
"Registration Rights Agreement"): (a) to the extent that
the proceeds received by AP net of the amount of the
underwriting discounts and commissions on a per share basis
as adjusted to account for any stock splits, stock
dividends or other distributions in respect of the Exchange
Shares (the "Per Share Price") does not equal or exceed the
Exchange Price, CEC will or will cause CMC to pay to AP an
amount equal to the difference between the Per Share Price
and the Exchange Price multiplied by the number of Exchange
Shares included in such registration; and (b) to the extent
the Per Share Price exceeds one-hundred twenty percent
(120%) of the Exchange Price, AP will pay CEC an amount
equal to the difference in the Per Share Price and one
hundred twenty percent (120%) of the Exchange Price
multiplied by the number of Exchange Shares included in
such registration. Any cash adjusting payments to be made
pursuant to this Section 1.9 will be made by the party
owing payment within five (5) days after the final account
of the registration proceeds has been made and agreed to by
CEC and AP.

2. Closing. Subject to the terms and provisions hereof, the closing of
the transactions provided for herein (the "Closing") shall occur at 10:00 a.m.
at the offices of Self, Giddens & Lees, Inc., 2725 Oklahoma Tower, Oklahoma
City, Oklahoma on October 31, 1997 (the "Closing Date") unless another date,
time or place is agreed to in writing by the parties hereto, but in any event
will be effective as of 12:01 a.m. Oklahoma time on November 1, 1997 (the
"Effective Time").

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<PAGE> 9
3. Representations and Warranties of AP. AP represents and warrants to
the CEC Group as follows:

3.1 Organization, Good Standing, Etc. AP is a limited
partnership duly formed, validly existing and in good
standing under the laws of the State of Oklahoma and has
the partnership authority to own AP's property and to carry
on AP's business as now being considered. APC is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Oklahoma and has
the corporate power to own APC's property and to carry on
APC's business as now being conducted. AP has the
partnership power to execute and deliver this Agreement and
to consummate the transactions contemplated hereby. On the
Closing Date, APC will be duly qualified and/or licensed,
as may be required, and in good standing in each of the
jurisdictions in which the nature of the business conducted
by APC or the character of the property owned, leased or
used by APC makes such qualification and/or licensing
necessary, except where the failure to be so qualified
and/or licensed, and in good standing would not singly or
in the aggregate have a material adverse effect on APC. AP
has made available to CMC copies of the certificate of
incorporation, bylaws and the records of meetings of the
shareholders and boards of directors of APC which are
complete and correct in all respects. All material
corporate actions taken by APC since its organization and
incorporation through the date hereof have been duly
authorized or subsequently ratified as necessary. APC is
not in default under or in violation of any provision of
APC's certificate of incorporation or bylaws.

3.2 Capital Stock of APC. The authorized capital stock of APC
consists of 50,000 shares of common stock, par value $1.00
per share ("APC Common Stock"), of which 42,920 shares are
issued and outstanding and all of which are owned by AP.
There are no treasury shares held by APC. The issued APC
Common Stock is validly authorized and issued and fully
paid and nonassessable. APC has not ever declared or paid
any dividend, or declared or made any distribution on, or
authorized the creation or issuance of, or issued, or
authorized or effected any split-up or any other
recapitalization of, any of its capital stock, or directly
or indirectly redeemed, purchased or otherwise acquired any
of its outstanding capital stock and, except as permitted
by this Agreement, will not do so between the date of this
Agreement and the Closing Date. There are no contractual
obligations of APC to repurchase, redeem or otherwise
acquire any outstanding shares of APC's capital stock.
Further, there are no options, warrants or other rights to
acquire any additional shares of capital stock of APC.

3.3 The Interests. APC is a wholly-owned affiliate of AP and
as of the Closing Date, APC will own and conduct as an
ongoing concern all of AP and its affiliates' Oil and Gas
Business. APC has not ever engaged in an activity
unrelated to the Oil and Gas Business. The Oil and Gas
Business consists of the following:

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<PAGE> 10
3.3.1 Oil, gas and mineral leases and the operating
rights, mineral interests, royalty interests,
overriding royalty interests, payments out of
production and interests in or under unit or
pooling agreements covering lands located
onshore in the continental United States and
all real estate owned and leased in
connection with the ownership or operation
thereof including, without limitation, the
interests described in Schedule "3.3.1"
attached hereto as a part hereof (the "Real
Property Interests");

3.3.2 All other contracts, agreements, leases,
licenses, permits, rights (including without
limitation rights in warranty and other
choses in action), easements and orders
relating to: (a) the Real Property Interests
(or the lands covered thereby or pooled,
unitized, or directly used or held for use in
connection therewith), the operations
conducted or to be conducted thereon, or the
production, treatment, sale or disposal of
hydrocarbons or water produced therefrom or
attributable thereto; and (b) the Other
Interests (as hereinafter defined);

3.3.3 All wells (including, without limitation,
disposal, supply or injection wells),
personal property, fixtures (including,
without limitation, plants, gathering
systems, pipelines, compressors and
dehydration and other treatment facilities),
equipment (including, without limitation,
inventory, field trucks and vehicles and
supplies) and improvements located on the
Real Property Interests, or upon lands
pooled, unitized, or directly used or held
for use in connection therewith or with the
operation or maintenance thereof, or with the
production, treatment, sale or disposal of
hydrocarbons or water produced therefrom or
attributable thereto, and all original books,
files, seismic records and tapes (to the
extent the AP Group may convey ownership or
rights concerning the use of same), other
records and information of the AP Group
(including without limitation all land,
geological, geophysical and accounting files
and records) pertaining to the Real Property
Interests and the Oil and Gas Business;

3.3.4 All other businesses, operations, rights,
titles and interests relating to the
drilling, exploration, development,
operation, marketing, sale or other disposal
of oil, gas and other minerals including,
without limitation, all of the businesses and
activities conducted in APC's affiliates,
AnSon Gas Marketing ("AGM") and AnSon
Corporation and all other businesses and
activities relating to any of the foregoing
(the "Other Interests"); and

3.3.5 All other rights and interests in, to or
under or derived from the Other Interests or
the Real Property Interests, the lands
covered

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<PAGE> 11
thereby or pooled, unitized or directly used
or held for use in connection therewith.

3.3.6 As used herein, the term "Interests" means
the aggregate of all rights, titles and
interests owned by AP and/or any of its
affiliates, or any of them, insofar as they
relate to the Oil and Gas Business. The
Interests shall not include the main frame
computer and server and related equipment
described in Schedule "3.3.6" attached hereto
(the "Excluded Equipment") owned by AP, but
will include all other computer and office
equipment, furniture, fixtures, accessories
and supplies. In addition, the New Mexico
oil and gas interests and the salt water
disposal wells described in Schedule "3.3.6"
(collectively with the Excluded Equipment,
the "Excluded Assets") will not be included
in the Interests. AP will allow CMC access
to and use of the Excluded Equipment from the
Closing Date through March 31, 1998, as
provided in the Sublease and Use Agreement
attached hereto as Exhibit "6.8.2".

3.4 No Breach of Statute or Contract; Governmental
Authorizations. Neither the execution and delivery of this
Agreement nor compliance with the terms and provisions of
this Agreement by the AP Group will violate any law,
statute, rule or regulation of any governmental authority,
or will on the Closing Date conflict with or result in a
breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree or ruling of any court
or governmental agency or authority to which the AP Group
is subject or, except as set forth in Schedule "3.4," of
any material agreement or instrument to which the AP Group
is a party or by which any of them is bound, or constitute
a material default thereunder, or result in the creation of
any material lien, charge or encumbrance upon any of the
Interests or cause any acceleration of maturity of any
material obligation or loan, or give to others any material
interest or rights, including rights of termination or
cancellation, in or with respect to any of the Interests.

3.5 Authorization of Agreement. The execution, delivery and
performance of this Agreement by the members of the AP
Group have been duly and validly authorized by all
requisite partnership action. The execution, delivery and
performance by the AP Group of all other agreements and
transactions contemplated hereby have been, or prior to
Closing will be, duly authorized and approved by all
requisite partnership or corporate action on the part of
the AP Group. This Agreement has been, and the other
agreements and instruments contemplated hereby, when
executed and delivered, will be, duly executed and
delivered by each member of the AP Group as required and,
assuming the due authorization, execution and delivery
hereof and thereof by the other parties hereto or thereto,
this Agreement constitutes and, when executed, each of the
other agreements contemplated hereby will constitute, a
valid and binding obligation of each member of the AP Group
that is a party hereto or thereto, as the case may be,
enforceable against each of them in

6
<PAGE> 12
accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance and similar laws affecting creditors'
rights generally from time to time and to general
principles of equity, and in the case of the Registration
Rights Agreement (as hereinafter defined), considerations
of public policy.

3.6 Broker's or Finder's Fees. None of AP or any of its
subsidiaries has incurred any liability, contingent or
otherwise, for brokers' or finders' fees in respect of this
Agreement for which any member of the CEC Group or APC will
have any responsibility whatsoever.

3.7 Permits. On the Closing Date, to the best of the AP
Group's knowledge, APC will have all approvals,
authorizations, consents, licenses, orders, franchises,
rights, registrations and permits of all governmental
agencies, whether federal, state or local, United States or
foreign, required to permit the operation of APC's
businesses as presently conducted (the "Permits") and each
will be in full force and effect and will have been duly
and validly issued, except where the absence of which,
singly or in the aggregate, would not have a material
adverse effect on APC. The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will not result in any revocation,
cancellation, suspension or modification of any such Permit
except where such revocation, cancellation, suspension or
modification would not have a material adverse effect on
APC. On the Closing Date, there will be no outstanding
violation of any of the Permits singly or in the aggregate
that would have a material adverse effect on APC.

3.8 Prior Obligations. None of the AP Group have any
contractual obligation relating to the disposition, by
merger or otherwise, of all or any of the equity securities
of APC or of all or any significant portion of the
Interests except as contained in this Agreement, except for
obligations arising in the ordinary course of business of
APC and except as disclosed in Schedule "3.8."

3.9 Title to the Interests. Except as set forth in Schedule
"3.9," APC will have on the Closing Date good and
defensible title of record to APC's respective properties
comprising the Interests free and clear of all liens,
pledges, claims, charges, security interests, production
payments or other encumbrances except: (a) liens for
current taxes and assessments not yet due, or being
contested in good faith by appropriate proceedings; (b)
such imperfections of title and encumbrances, if any, which
do not have singly or in the aggregate a material adverse
effect on APC; and (c) the volumetric production payment in
favor of Cactus Hydrocarbon III Limited Partnership, the
details of which are described in Schedule "3.9" attached
hereto (the "Production Payments").

3.10 Compliance with Laws. Except as disclosed in Schedule
"3.10," neither AP nor any of its subsidiaries is in
violation of any applicable law, ordinance, regulation,
writ, judgment, decree or order of any court or government
or

7
<PAGE> 13
governmental unit in connection with the Interests, the
consequences of which singly or in the aggregate would have
a material adverse effect on APC.

3.11 Oil and Gas Leases in Good Standing. Except as disclosed
in Schedule "3.11," all oil and gas leases which are
material singly or in the aggregate to APC are in full
force and effect, and APC is not in default thereunder.

3.12 Taxes. All ad valorem, property, production, severance and
similar taxes and assessments based on or measured by the
ownership of property comprising the Interests or the
production or removal of hydrocarbons or the receipt of
proceeds therefrom have been timely paid when due and are
not in arrears, except such things as are being contested
in good faith by appropriate proceedings and as to which
adequate reserves have been established in accordance with
generally accepted accounting principles.

3.13 Claims or Litigation. Except as disclosed in Schedule
"3.13," there is no material suit, action or other
proceeding pending before any court or governmental agency
and, to the knowledge of AP, there is no material claim,
dispute, suit, action or other proceeding threatened,
against APC, any of the Interests or AP.

3.14 Contracts, Consents and Preferential Rights. AP has
described in Schedule "3.14"; (a) all partnership, joint
venture, farmin/farmout, dry hole, bottom hole, acreage
contribution, area of mutual interest, purchase and/or
acquisition agreements of which any terms remain executory
which materially affect the Interests; (b) all other
executory contracts to which APC is a party which
materially affect any item of the Interests; (c) all
governmental or court approvals and third party contractual
consents required in order to consummate the transactions
contemplated by this Agreement, other than routine consents
required in connection with transfers of U.S. federal,
state and Indian leases; (d) all agreements pursuant to
which third parties have preferential rights or similar
rights to acquire any portion of the Interests upon the
exchange contemplated by this Agreement; and (e) all other
contracts and agreements which are in any single case of
material importance to the business of APC.

3.15 Tax Partnerships. No item of the Real Property Interests
nor any oil and gas property owned by APC is treated for
income tax purposes as being owned by a partnership except
for AGM and except as disclosed in Schedule "3.15."

3.16 Financial Statements. The cash flow and operating
statements for the years ended December 31, 1995 and 1996,
and for the six months ended June 30, 1997, for the AP
Group Oil and Gas Business are true and correct in all
material respects. To the best of the AP Group's
knowledge, APC has no liabilities of any kind whatsoever,
whether accrued, contingent or otherwise except as
disclosed in Schedule "3.16" attached hereto and trade
payables arising in the ordinary course of business.

8
<PAGE> 14
3.17 Tax Matters. APC has never filed a tax return or report of
any kind with any taxing jurisdiction, except an initial
franchise tax return in the State of Oklahoma will be filed
prior to Closing and no tax returns or taxes are due.

3.18 Insurance. AP will maintain or cause APC to maintain
through the Closing Date, with financially sound and
reputable insurers, insurance to the extent and against
such hazards and liabilities and in such types and amounts
as is commonly maintained by entities similarly situated.

3.19 Planned Future Commitments. APC has not planned or
budgeted future expenditure commitments relating to the
Real Property Interests (drilling of wells, workovers,
contract settlements, pipeline projects, production
facilities, etc.) or Other Interests in excess of
$100,000.00 in the aggregate which are not disclosed in
Schedule "3.19."

3.20 Environmental and Safety Matters. Except as set forth in
Schedule "3.20" and insofar as it pertains to the
Interests:

3.20.1 The AP Group is not aware, and has not
received notice from any person, entity or
governmental body, agency or commission, of
any release, disposal, event, condition,
circumstance, activity, practice or incident
concerning any land, facility, asset or
property that: (a) interferes with or
prevents compliance or continued compliance
by the AP Group (or by any member of the CEC
Group after the Closing Date) with any United
States, state or local law, regulation, code
or ordinance or the terms of any license or
permit issued pursuant thereto; or (b) gives
rise to or results in any common law or other
liability of APC to any person, entity or
governmental body, agency or commission for
damage or injury to natural resources,
wildlife, human health or the environment
which would have a material adverse effect on
APC in each case.

3.20.2 The AP Group is not aware of any civil,
criminal or administrative action, lawsuit,
demand, litigation, claim, hearing, notice of
violation, investigation or proceeding,
pending or threatened, against any of the AP
Group or operator of any of the lands,
facilities, assets and properties owned or
formerly owned, operated, leased or used by
any of the AP Group as a result of the
violation or breach of any federal, state, or
local law, regulation, code or ordinance or
any duty arising at common law to any person,
entity or governmental body, singly or in the
aggregate, which if determined adversely
would have a material adverse effect on APC.

3.21 Investment Intent. Neither AP nor any of its affiliates
presently own nor will they own prior to the Closing Date
any CEC Common Stock. On the date first above written and
the Closing Date, AP has and will have no present

9
<PAGE> 15
intention to sell or otherwise dispose of any CEC Common
Stock to be issued to it pursuant to this Agreement. On
the Closing Date, AP is acquiring the CEC Common Stock for
investment purposes and not with a view to or in connection
with a distribution within the meaning of the Securities
Act of 1933, as amended (the "33 Act"). AP understands and
agrees that the certificates representing the CEC Common
Stock will have a legend imprinted thereon to the following
effect:

"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER STATE SECURITIES LAWS.
SUCH SHARES OF COMMON STOCK MAY NOT BE SOLD,
ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
SAID SECURITIES ACT COVERING THE TRANSFER OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
REGISTRATION UNDER SAID SECURITIES ACT IS NOT
REQUIRED."

3.22 Powers of Attorney. There are no outstanding powers of
attorney relating to or affecting APC or any of the
Interests.

3.23 Plugging Status. All wells on the Interests that have been
permanently plugged and abandoned have been so plugged and
abandoned in accordance in all material respects with all
applicable requirements of each governmental authority
having jurisdiction over APC and the Interests.

3.24 Equipment. The equipment has been installed, maintained
and operated by the AP Group as a prudent operator in
accordance with oil and gas industry standards, and is
currently in a state of repair so as to be adequate for
normal operations of the Interests.

3.25 Payout Balances. Schedule 3.25 attached hereto, contains a
complete and accurate list of the status of any "payout"
balance and gas balancing obligations and rights, as of
September 30, 1997, for each oil and gas Interest that is
subject to a reversion or other adjustment at some level of
cost recovery or payout (or passage of time or other event,
other than cessation of production).

3.26 Full Disclosure. The representations, warranties or other
statements by the AP Group in this Agreement or in the
Schedules hereto, taken as a whole, do not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained
herein or therein not misleading.

3.27 Affiliate Transactions. There are no transactions
affecting any of the Interests between APC and any of its
affiliates, except as set forth in Schedule "3.14"

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<PAGE> 16
attached hereto. As used in this Agreement, "affiliate"
means, with respect to any person or entity, each other
person or entity directly or indirectly controlling,
controlled by or under common control with such person.

3.28 Intangible Property. There are no material trademarks,
trade names, patents, service marks, brand names, computer
programs, databases, industrial designs, copyrights or
other intangible property that are necessary for the
operation, or continued operation, or for the ownership and
operation, or continued ownership and operation, of any of
the Interests.

4. Representations and Warranties of the CEC Group. CEC and CMC
represent and warrant to AP as follows:

4.1 Organization, Good Standing, Etc. CEC and CMC are
corporations duly organized, validly existing and in good
standing under the laws of the State of Oklahoma. CEC and
CMC have the corporate power to own their property and to
carry on their business as now being conducted. CEC and
CMC have the corporate power to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby. On the Closing Date, CEC and CMC will be duly
qualified and/or licensed and in good standing in each of
the jurisdictions in which the nature of the business
conducted by them or the character of the property owned,
leased or used by any of them makes such qualification
and/or licensing necessary, except in such jurisdictions
where the failure to be so qualified or licensed would not
have a material adverse effect on CEC and its consolidated
subsidiaries considered as one enterprise. CMC is a wholly
owned subsidiary of CEC. Neither CEC nor CMC is in default
under or in violation of any provision of their respective
certificate of incorporation or bylaws.

4.2 Capital Stock of CEC. The authorized capital stock of CEC
consists of 100,000,000 shares of CEC Common Stock and
10,000,000 shares of preferred stock of which 70,376,462
shares of CEC Common Stock and no shares of preferred stock
were issued and outstanding as of September 30, 1997. Each
share of CEC Common Stock to be issued pursuant to this
Agreement will be subject to the Registration Rights
Agreement.

4.3 SEC Documents. CEC has delivered or made available to AP
each registration statement, report, definitive proxy
statement or definitive information statement and all
exhibits thereto filed since December 31, 1996, each in the
form (including exhibits and any amendments thereto) filed
with the SEC (collectively, the "CEC Reports"). The CEC
Reports, which, except as otherwise disclosed, were filed
with the SEC in a timely manner, constitute all forms,
reports and documents required to be filed by CEC under the
33 Act, the Securities Exchange Act of 1934, as amended
(the "34 Act") and the rules and regulations promulgated
thereunder. As of their respective dates, the CEC Reports
(i) complied as to form in all material respects with the
applicable requirements of the 33 Act and the 34 Act and
(ii) did not contain

11
<PAGE> 17
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Each of the balance sheets of CEC included in or
incorporated by reference into the CEC Reports (including
the related notes and schedules) fairly presents the
financial position of CEC as of its date and each of the
statements of income, retained earnings and cash flows of
CEC included in or incorporated by reference into the CEC
Reports (including any related notes and schedules) fairly
presents the results of operations, retained earnings or
cash flows, as the case may be, of CEC for the periods set
forth therein (subject, in the case of unaudited
statements, to normal year-end audit adjustments which
would not be material in amount or effect), in each case in
accordance with generally accepted accounting principles
consistently applied during the periods involved, except as
may be noted therein and except, in the case of any
unaudited statements, as permitted by Form 10-Q promulgated
under the 34 Act.

4.4 No Breach of Statute or Contract; Governmental
Authorizations. Neither the execution and delivery of this
Agreement nor compliance with the terms and provisions of
this Agreement by the CEC Group will violate any law,
statute, rule or regulation of any governmental authority,
or will on the Closing Date conflict with or result in a
breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree or ruling of any court
or governmental agency, authority to which CEC or its
subsidiaries is subject or of any agreement or instrument
to which CEC or its subsidiaries is a party or by which any
of them is bound, or constitute a material default
thereunder, or result in the creation of any material lien,
charge or encumbrance upon any property or assets of CEC or
its subsidiaries or cause any acceleration of maturity of
any material obligation or loan, or give to others any
material interest or rights, including rights of
termination or cancellation, in or with respect to any of
the properties, assets, agreements, contracts or business
of CEC or its subsidiaries.

4.5 Authorization of Agreement. As of the Closing Date, the
execution, delivery and performance of this Agreement by
the members of the CEC Group will have been duly and
validly authorized and approved by all requisite corporate
action on the part of each member of the CEC Group. The
execution, delivery and performance by each member of the
CEC Group of all other agreements and transactions
contemplated hereby have been or prior to Closing will be,
duly authorized and approved by all requisite corporate
action on the part of each member of the CEC Group. This
Agreement has been, and the other agreements contemplated
hereby, when executed and delivered, will be, duly executed
and delivered by each member of the CEC Group as required
and, assuming the due authorization, execution and delivery
hereof and thereof by the other parties hereto or thereto,
this Agreement constitutes and, when executed, each of the
other agreements contemplated hereby will constitute, a
valid and binding obligation of each

12
<PAGE> 18
member of the CEC Group that is a party hereto or thereto,
as the case may be, enforceable against each of them in
accordance with its terms subject to applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent
conveyance and similar laws affecting creditors' rights
generally from time to time and to general principles of
equity, and in the case of the Registration Rights
Agreement, considerations of public policy.

4.6 Broker's or Finder's Fees. No member of the CEC Group has
incurred any liability, contingent or otherwise, for
brokers' or finders' fees in respect of this Agreement for
which any member of the AP Group shall have any
responsibility whatsoever.

4.7 The Oklahoma Act Provisions. Section 1090.3 of the
Oklahoma Act does not prohibit or restrict the issuance of
shares of CEC Common Stock to AP pursuant hereto or the
other transactions contemplated hereby. The Control Share
Acquisition Act as set forth in Sections 1145 through 1155
of the Oklahoma Act is not applicable to CEC and will not
be applicable to this Agreement and the issuance of the
shares of CEC Common Stock to be issued to AP pursuant
hereto and the other transactions contemplated hereby.

4.8 No Violations. The execution and delivery of this
Agreement does not, and the consummation of the transaction
contemplated hereby will not conflict with, result in any
violation of or default (with or without notice or lapse of
time or both) under, give rise to a right of termination,
cancellation, acceleration of any obligation or to the loss
of a material benefit under, or result in the creation of
any lien or encumbrance on any of the properties or assets
of the CEC Group under, any provision of (a) the
certificate of incorporation or by-laws of the CEC Group,
(b) any loan or credit agreement, note, bond, mortgage,
indenture, lease, permit, concession, franchise, license or
other agreement, instrument or obligation applicable to the
CEC Group, or (c) assuming the consents, approvals,
authorizations or permits and filings or notifications
referred to in Section 4.8 are duly and timely obtained or
made, any judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to the CEC Group or
properties or assets of the CEC Group, other than, in the
case of clause (b) above, any conflict, violation, default,
right, loss or lien that, individually or in the aggregate,
would not have a material Adverse Effect on the CEC Group.

4.9 Consents and Approvals. Except as otherwise set forth in
Schedule 4.9, no consent, approval, order or authorization
of, registration, declaration or filing with, or permit
from, any governmental authority is required by or with
respect to CEC or CMC in connection with the execution and
delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for: (a) consents,
approvals, orders, authorizations, registrations,
declarations, filings or permits which the failure to
obtain or make would not, individually or in the aggregate,
have a material adverse effect on CEC and CMC; (b) the
filing of the Certificate of Merger with the Secretary of
State

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<PAGE> 19
of Oklahoma pursuant to the provisions of the Oklahoma Act;
(c) if required, the filing of a pre- merger notification
report by CEC under the HSR Act and the expiration or
termination of the applicable waiting period. Except as
otherwise set forth in Schedule 4.9, no third-party consent
is required by or with respect to the CEC Group in
connection with the execution and delivery of this
Agreement or the consummation of the transactions
contemplated hereby except for any third party consent
which the failure to obtain would not, individually or in
the aggregate, have a material adverse effect on the CEC
Group.

4.10 Litigation. There is no litigation, proceeding or
investigation pending or, to the knowledge of the CEC Group
threatened against or affecting the CEC Group that
questions the validity or enforceability of this Agreement
or any other document, instrument or agreement to be
executed and delivered by the CEC Group in connection with
the transaction contemplated hereby. Except as otherwise
set forth in Schedule 4.10 or the CEC Reports, no
litigation, arbitration or other proceeding of any
governmental authority is pending, or to the CEC Group's
knowledge, threatened against the CEC Group which if
adversely determined, would individually or in the
aggregate, have a material adverse effect on the CEC Group.

4.11 Vote Required. No vote of the matters of any class or
series of CEC capital stock or other voting securities is
necessary to approve this Agreement, the merger of the
transactions contemplated hereby.

5. Conduct and Transactions Prior to Closing Date. Between the effective
date of this Agreement and the Closing Date, the CEC Group and the AP Group
will each comply with the following:

5.1 Investigation by AP. Between the date of this Agreement
and the Closing, CEC shall give AP, its agents and
representatives, copies of any registration statement,
report, definitive proxy statement or definitive
information statement and all exhibits thereto, each in the
form filed with the SEC.

5.2 Investigation by CEC/Operation of Business of the AP Group.
Between the date of this Agreement and the Closing Date:

5.2.1 Insofar as related to the Interests, the AP
Group will give the CEC Group and their
agents and representatives, reasonable access
to all of the books and records of the APC
Group and the properties of AP Group and
agrees to cause their respective officers to
furnish the CEC Group and their agents and
representatives with such financial and
operating data and other information with
respect to the respective businesses and
properties of the AP Group, as the CEC Group,
its agents and representatives shall from
time to time reasonably request; provided,
however, that any such investigation shall
not affect any of the representations and

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<PAGE> 20
warranties of AP hereunder and shall be
conducted in such manner as not to interfere
unreasonably with the operation of the
business of APC. In the event of termination
of this Agreement, except as prevented by
law, the CEC Group will, and will cause its
agents and representatives to, return to AP
all documents, work papers and other
materials obtained from AP, in connection
with the transactions contemplated hereby,
and all copies, extracts or other
reproductions thereof in whole or in part
(the "AP Confidential Material"). The AP
Confidential Material does not include
information which: (a) is or becomes public
information without violation of this
Agreement; (b) was already known to the CEC
Group; (c) is developed by the CEC Group
independently from the information supplied
to the CEC Group pursuant to this Agreement;
or (d) is furnished to the CEC Group by a
third party who is not an employee, agent,
representative or advisor of AP independently
from the CEC Group's investigation pursuant
to the transactions contemplated by this
Agreement. The CEC Group agrees to keep
confidential in accordance with this Section
5.2 any AP Confidential Material obtained
pursuant to this Agreement. If this Agreement
is terminated, the CEC Group shall not use
any of the AP Confidential Material to the
financial advantage of the CEC Group or any
other person or to the detriment of AP.

5.2.2 Subject to Subsection 5.2.3 below or except
as required by law, the AP Confidential
Material will be kept confidential and will
not, without the prior written consent of AP,
be disclosed by the CEC Group in whole or in
part, and will not be used by the CEC Group,
directly or indirectly, for any purpose other
than in connection with this Agreement, the
other transactions contemplated by this
Agreement or evaluating, negotiating or
advising the CEC Group with respect to the
transactions contemplated herein.

5.2.3 In the event that the CEC Group or anyone to
whom the CEC Group supplies the AP
Confidential Material are requested or
required (by oral questions, interrogatories,
requests for information or documents,
subpoena, civil investigative demand, any
informal or formal investigation by any
governmental body or otherwise in connection
with legal processes) to disclose any of the
AP Confidential Material, the CEC Group
agrees: (a) to immediately notify AP of the
existence, terms and circumstances of such a
request; (b) to consult with AP on the
advisability of taking legally available
steps to resist or narrow such request; and
(c) if disclosure of such information is
required, to furnish only that portion of the
AP Confidential Material which, in the
opinion of CEC's counsel, the CEC Group is
legally compelled to disclose and to
cooperate with any action by AP to obtain an
appropriate

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<PAGE> 21
protective order or other reliable assurance
that confidential treatment will be accorded
the AP Confidential Material.

5.2.4 AP will, to the extent required for continued
operation of the Interests without
impairment, use its reasonable efforts to
preserve substantially intact the books and
records relative thereto, and to preserve the
present relationships of the AP Group to the
extent related to the Interests with persons
having significant business relations
therewith such as suppliers, customers,
brokers, agents or otherwise and to promptly
notify the CEC Group of an emergency or other
change which would have a significant adverse
effect on AP.

5.2.5 The AP Group APC will conduct the Oil and Gas
Business only in the ordinary course and, by
way of amplification and not limitation, they
will not, without the prior written consent
of the CEC Group: (a) issue, sell or
otherwise dispose of shares of its capital
stock; or (b) grant any other options or
warrants or other rights to purchase or
otherwise acquire any shares of capital stock
or issue any securities convertible into
shares of capital stock of APC; or (c) adopt
any Employee Plans (hereinafter defined); or
(d) declare, set aside, or pay any dividend
or distribution with respect to the capital
stock of APC other than as permitted with
respect to the working capital adjustments as
set forth in Section 9.1 hereof; or (e)
directly or indirectly redeem, purchase or
otherwise acquire any capital stock of APC;
or (f) effect a split or reclassification of
any capital stock of APC or a
recapitalization of APC; or (g) change the
charter or bylaws of APC; or (h) permit APC
to grant any increase in the compensation
payable or to become payable to their Active
Employees (hereinafter defined) other than
regularly scheduled merit increases; or (i)
borrow, except for working capital purposes
and except in the ordinary course of
business, or agree to borrow any funds, or
guarantee or agree to guarantee the
obligations of others; or (j) waive any
rights of substantial value; or (k) except in
the ordinary course of business enter into an
agreement, contract or commitment which, if
entered into prior to the date of this
Agreement, would be required to be listed in
a Schedule attached to this Agreement, or
materially amend or change the terms of any
such agreement, contract or commitment; or
(l) take any action or omit to take any
action which would result in any of its
representations or warranties set forth in
this Agreement becoming untrue.

5.2.6 APC will maintain its books of account in the
usual, regular and ordinary manner.

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<PAGE> 22
5.3 Employees.

5.3.1 Status of Active Employees. For the purpose
of this Agreement, the term "Active
Employees" shall mean the full-time employees
listed in Schedule "5.3.1" attached hereto
employed by the AP Group (excluding APC) in
the conduct of the Oil and Gas Business,
inclusive of any such employees on temporary
leave of absence (including military leave,
temporary disability or sick leave). Within
fifteen (15) days after execution of this
Agreement, AP will provide the CEC Group with
a list of Active Employees, stating job
title, date of hire and salary as of the date
thereof. AP will update such list from time
to time to reflect changes in the work force,
and the current list of Active Employees, as
such changes occur.

5.3.2 Status of Active Employees with CEC Group.
The CEC Group is under no obligation to
retain or hire any Active Employee. At least
five (5) days before the Closing Date, the
CEC Group will provide to AP a list of those
Active Employees to whom an offer of
employment has been or will be made to be
effective on the Closing Date. Upon
reasonable prior notice during normal
business hours, the CEC Group and its
representatives will be given reasonable
access to the facilities and to personnel,
safety and other relevant records of the AP
Group (to the extent access to such records
does not violate any law or the legitimate
privacy rights of the Active Employee
concerned) for the purpose of preparing for
and conducting employment interviews with any
Active Employees. Interviews will be
conducted during normal business hours. On
the Closing Date, AP will terminate the
employment of the Active Employees who have
received and accepted an offer of employment
from CMC or any of its affiliates (the "Newly
Hired Employees"). On or before the Closing
Date, AP will provide other employment for or
terminate the employment of all Active
Employees who are not Newly Hired Employees.
As used in this Section 5.3.2, the term
"affiliates" of CEC or any member of the CEC
Group shall not include AP, APC or their
subsidiaries.

5.3.3 Employee Benefit Plans. Except as set forth
in Schedule "5.3.3" attached hereto, the AP
Group has never sponsored or participated in
any Employee Plans up to the Closing Date. As
used herein "Employee Plans" shall mean any
bonus, deferred compensation, incentive
compensation, stock purchase, stock option,
employment, consulting, severance or
termination pay, hospitalization or other
medical, life or other insurance,
supplemental unemployment benefit, profit
sharing, pension or retirement plan, program,
agreement or arrangement, or any other
benefit plan of any kind

17
<PAGE> 23
whatsoever that is provided to employees or
former employees of the AP Group, or their
beneficiaries, and each other "employee
benefit plan" as defined in Section 3(3) of
the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), whether formal
or informal, written or oral, and whether
contributed to, or required to be contributed
to, by the AP Group. If any claims, demands
or liabilities of any kind whatsoever ever
arise due to the existence of any Employee
Plan up to the Closing Date, AP will be
solely responsible for such claims, demands,
liabilities or obligations.

5.4 Salaries and Benefits.

5.4.1 AP's Obligations. With respect to their
services as employees of the AP Group up to
the Closing Date, AP will be solely
responsible for: (a) the payment of all
wages, remuneration or other obligations of
any kind whatsoever (including obligations
under any Employee Plans sponsored by AP) due
to Active Employees; (b) notices of
termination or pay in lieu thereof or the
payment of any termination or severance
payments, if any; and (c) the obligation of
health plan continuation coverage in
accordance with the Consolidated Budget
Reconciliation Act of 1984 ("COBRA") and
Sections 601 through 608 of ERISA and with
respect to Active Employees of the AP Group,
compliance with any such similar law which
requires health care continuation after
termination of employment.

5.4.2 CEC Group's Obligations. After the Closing
Date and arising solely from the employment
relationship of the Newly Hired Employees
with the CEC Group or its affiliates, the CEC
Group will be solely responsible for: (a) the
payment of all wages, remuneration or other
obligations of any kind whatsoever (including
obligations under any employee benefit plans
sponsored by CEC due to the Newly Hired
Employees; (b) notices of termination or pay
in lieu thereof or the payment of any
termination or severance payments, if any,
under severance plans sponsored by CEC; and
(c) the obligation to pay medical benefits
under CEC's medical plan, provided, with
respect to obligations for medical benefits
provided to Newly Hired Employees, CEC will
be responsible for charges incurred by the
Newly Hired Employees after the Closing Date.
A charge will be deemed incurred, in the case
of medical (other than hospitalization) or
dental benefits, when the services that are
the subject to the charge are performed. In
the case of hospitalization benefits, a
charge will be deemed incurred by the Newly
Hired Employees on the date that
hospitalization begins, and charges for
hospitalization which

18
<PAGE> 24
began before the Closing Date will be the
responsibility of AP even if such
hospitalization continues after the Closing
Date.

5.4.3 CEC Employee Benefit Programs. Under the
employee benefit programs of the CEC Group,
subject to approval by the Internal Revenue
Service, Newly Hired Employees shall be
credited with employment service with APC:
(a) for purposes of determining any period of
eligibility to participate or to vest in
benefits provided under CEC's 401(k)
incentive savings, defined benefit, medical,
disability and life insurance plans, but not
for purposes of determining the amount or
accrual of benefits under CEC's defined
benefit plan; and (b) for purposes of
calculating vacation benefits pursuant to
CEC's vacation policies. It is understood
that the Newly Hired Employees will not have
any carryover vacation from the AP Group in
excess of five (5) days, but will be entitled
to earn days of vacation according to CEC's
vacation policies by taking into account
their prior employment service.

5.4.4 Preexisting Conditions. For each Newly Hired
Employee (and his or her eligible dependents)
who become covered under CEC's medical plan
on the Closing Date and who were covered by
the AP Group's medical plan at the Closing
Date, CEC's medical plan will waive any
preexisting conditions, exclusion or
limitations if permitted under applicable
laws and regulations and if approved by the
insurance carrier which provides medical
insurance to CEC's employees on either an
indemnity or "stop loss" basis.

5.4.5 AP Group's Retirement and Savings Plans.
Prior to but to be effective as of the
Closing Date, AP will cause the AP Group's
defined benefit retirement plan to be amended
to provide that all Newly Hired Employees who
are participants in such retirement plan will
cease to accrue future benefits and AP shall
retain sole liability for the payment of such
benefits as and when the Newly Hired
Employees become eligible therefor under such
retirement plan. Prior to but to be
effective as of the Closing Date, AP will
cause the AP Group's savings investment plan
and employee stock ownership plan (if any) to
be amended in order to provide that Newly
Hired Employees shall be 100% vested in their
accounts under such plans. As of the Closing
Date, all employee contributions by Newly
Hired Employees and all obligations of the AP
Group to make employer contributions in
respect to such employees under any defined
contribution, registered retirement savings,
money purchase pension or stock purchase
plans shall cease unless otherwise required
by applicable law or regulation.

5.4.6 WARN Act. AP will, if required under the
Worker Adjustment and Retraining Notification
Act ("WARN"), provide timely and

19
<PAGE> 25
effective notice to the Active Employees with
respect to any employment loss suffered by
such Active Employees as the result of the
termination of their employment with the AP
Group. In the event that WARN (or any
similar law) requires notice to such
employees and the AP Group fails to provide
timely and effective notice under WARN, AP
will indemnify and hold the CEC Group and its
affiliates harmless from and against any
liability to such employees or any unit of
local government that may result to the CEC
Group or its affiliates from such failure,
including, but not limited to, fines, back
pay and reasonable attorney's fees. The CEC
Group will indemnify and hold AP and its
affiliates harmless from any liabilities AP
or its affiliates would not otherwise have
incurred due to terminations after the
Closing Date of Newly Hired Employees with
respect to, arising under or relating to
WARN.

5.5 Consents. Prior to Closing, the AP Group and the CEC Group
will each use its respective reasonable efforts to obtain
the consent or approval of each person whose consent or
approval shall be required in order to permit the closing
of the transactions contemplated by this Agreement.

5.6 Conduct of Business by the CEC Group. The CEC Group
covenants and agrees with APC that from the date of this
Agreement until the Closing Date, CEC will conduct its
business in the ordinary course consistent with past
practices and will use its reasonable best efforts to
preserve intact its business organizations and
relationships with third parties. Without limiting the
generality of the foregoing, from the date hereof until the
Closing Date:

(a) CEC will not (i) declare, set aside or pay any
dividends or other distributions (whether payable in cash,
property or securities) with respect to its capital stock
other than a regular quarterly dividend not in access of
$0.05 per share per quarter; (ii) merge or consolidate
with, or transfer all or substantially of its assets to,
another corporation or other business entity; (iii)
liquidate, wind-up or dissolve (or suffer any liquidation
or dissolution); or (iv) enter into any contract,
agreement, commitment or arrangement with respect to any of
the foregoing;

(b) CEC will not adopt or propose any material change in
its certificate of incorporation or bylaws; and

(c) CEC will not, and will not permit any of its
subsidiaries to, take any action that would make any
representation and warranty of the CEC Group hereunder
inaccurate.

6. Conditions to Obligations of the CEC Group. The obligations of the CEC
Group to effect the transactions contemplated by this Agreement will be subject
to the following conditions:

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<PAGE> 26
6.1 Authorizations. AP shall have furnished CEC with certified
copies of resolutions and partnership authorizations duly
adopted by all of the Partners of AP authorizing all
necessary and proper partnership or corporate action to
enable the AP Group to comply with the terms of this
Agreement and approving the execution, delivery and
performance of this Agreement.

6.2 Representations and Warranties. Except to the extent waived
in writing by the CEC Group, (a) the representations and
warranties of the AP Group herein contained shall be
Substantially True (hereinafter defined) at the Closing
with the same effect as though made at such time (except if
a representation and warranty speaks as of a different
date, in which case it shall be Substantially True as of
such date); and (b) AP shall have performed all material
obligations and complied with all material covenants
required by this Agreement to be performed or complied with
by it at or prior to the Closing. AP shall have also
delivered to the CEC Group a certificate of AP, dated the
Closing Date and signed by two of its officers, to the
effect of the foregoing.

6.3 Third Party Consents. AP shall have obtained and delivered
to the CEC Group consents to the transactions contemplated
by this Agreement from the parties whose consent is
required by contract or otherwise.

6.4 No Material Adverse Change. There shall not have occurred
since June, 30, 1997: (a) any material adverse change in
the financial condition, results of operations or business
of the AP Group's Oil and Gas Business excluding any change
or effect resulting from general economic conditions, any
occurrence or condition affecting the oil and gas industry
generally and any occurrence or condition arising out of
the transactions contemplated by this Agreement or the
public announcement thereof; or (b) any loss or damage to
any of the properties or assets (whether or not covered by
insurance) of the AP Group or the Interests, which, in any
case, would have a Material Adverse Effect (as defined in
Section 10.3) on APC.

6.5 Statutory Requirements. All statutory requirements for the
valid consummation by the AP Group of the transactions
contemplated by this Agreement shall have been fulfilled
and all authorizations, consents and approvals of all
governmental bodies required to be obtained in order to
permit consummation by the AP Group of the transactions
contemplated by this Agreement shall have been obtained,
including, without limitation, the expiration or early
termination of any applicable waiting period required under
the provisions of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), if
required. Between the date of this Agreement and the
Closing, no action or proceeding shall have been instituted
or, to the knowledge of the AP Group shall have been
threatened by any party (public or private) before a court
or other governmental body to restrain or prohibit the
transactions contemplated by this Agreement or to obtain
damages in respect thereof.

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<PAGE> 27
6.6 Opinion of Counsel. The CEC Group shall have received from
legal counsel of AP an opinion dated the Closing Date, in
form and substance satisfactory to CEC's counsel, to the
effect that: (a) APC is a corporation duly incorporated and
validly existing and in good standing under the laws of the
State of Oklahoma; (b) APC has the corporate power to carry
on its business as now being conducted; (c) the authorized
capital stock of APC and the number of shares of capital
stock outstanding are as set forth in Section 3.2 of this
Agreement, and that such issued shares have been duly
authorized, are validly issued and outstanding, and are
fully paid and nonassessable; (d) the AP Group has the
requisite partnership or corporate power and authority and
has taken all requisite partnership or corporate action
necessary to enable each member of the AP Group to execute
and deliver this Agreement and to consummate the
transactions contemplated thereby; and (e) this Agreement
has been duly and validly executed and delivered by AP.

In rendering such opinion, counsel may rely, to the extent
counsel determines such reliance necessary or appropriate,
upon opinions of local counsel as to matters of law other
than that of the United States and Oklahoma and, as to
matters of fact, upon certificates of state officials or of
any officer or officers of AP provided the extent of such
reliance is stated in the opinion.

6.7 Transfer of the Interests. As of the Closing Date:

6.7.1 AP and its affiliates shall have sold,
assigned, transferred or otherwise conveyed
any and all of the Oil and Gas Business owned
by them to APC, other than the Excluded
Assets, with warranties of title in form and
substance reasonably acceptable to the CEC
Group, except for the one percent (1%)
partnership interest in AGM owned by AnSon
Gas Corporation ("AGC") to be transferred by
AGC to CAC on the Closing Date.

6.7.2 AP shall be the owner and holder of all of
the issued and outstanding capital stock of
APC.

6.7.3 AP and its affiliates shall not have sold,
assigned, transferred, or otherwise conveyed
any of the Interests to any person other than
APC.

6.8 Other Agreements. As of the Closing Date:

6.8.1 AP and its Partners and affiliates shall have
executed and delivered to the CEC Group a
Goodwill Protection Agreement in the form
attached as Exhibit "6.8.1" hereto.

6.8.2 AP and any other appropriate parties shall
have executed and delivered to the CEC Group
a Sublease and Use Agreement in the form
attached as Exhibit "6.8.2" hereto.

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<PAGE> 28
6.8.3 AP shall have executed and delivered to CEC a
Registration Rights Agreement.

6.8.4 The directors and officers of APC shall have
submitted written resignations from office.

6.9 Fairness Opinion. CEC shall have received a written
opinion from a nationally recognized investment banking
firm that the transactions contemplated by this Agreement
are fair to CEC from a financial point of view.

6.10 Schedules and Exhibits. The CEC Group shall have received
and reviewed all of the Schedules and Exhibits to be
provided by the AP Group which are not attached hereto as
of the date of execution of this Agreement and such
Schedules and Exhibits shall not be materially different
than anticipated by the CEC Group.

7. Conditions to Obligations of AP. The obligations of the AP Group to
effect the transactions contemplated by this Agreement shall be subject to the
following conditions:

7.1 Resolutions of Boards of Directors. CEC shall have
furnished AP with certified copies of resolutions or
written consents duly adopted by the boards of directors of
the CEC and CMC, authorizing all necessary and proper
corporate action to enable the CEC Group to comply with the
terms of this Agreement and approving the execution,
delivery and performance of this Agreement.

7.2 Representations and Warranties. Except to the extent
waived in writing by AP hereunder: (a) the representations
and warranties of the CEC Group herein contained shall be
Substantially True at the Closing with the same effect as
though made at such time (except if a representation and
warranty speaks as of a different date, in which case it
shall be Substantially True as of such date); and (b) the
CEC Group shall have performed all material obligations and
complied with all material covenants required by this
Agreement to be performed or complied with by it at or
prior to the Closing. CEC shall have also delivered to AP
a certificate of CEC, dated the Closing Date and signed by
two of its officers, to the effect of the foregoing.

7.3 Third Party Consents. CEC shall have obtained and
delivered to AP consents to the transactions contemplated
by this Agreement (if any) from the parties to all material
contracts which require such consent.

7.4 Statutory Requirements. All statutory requirements for the
valid consummation by the CEC Group of the transactions
contemplated by this Agreement shall have been fulfilled
and all authorizations, consents and approvals of all
governmental bodies required to be obtained in order to
permit consummation by the CEC Group of the transactions
contemplated by this Agreement shall have been obtained,
including, without limitation, the expiration or early
termination of any applicable waiting period required

23
<PAGE> 29
under the provisions of the HSR Act. Between the date of
this Agreement and the Closing, no action or proceeding
shall have been instituted or, to the knowledge of the CEC
Group, shall have been threatened by any party (public or
private) before a court or other governmental body to
restrain or prohibit the transactions contemplated by this
Agreement or to obtain damages in respect thereof.

7.5 Opinion of Counsel. AP shall have received an opinion of
legal counsel to CEC, dated the Closing Date, in form and
substance satisfactory to AP's counsel, to the effect that:
(a) CEC and CMC each is a corporation duly incorporated and
validly existing and in good standing under the laws of the
State of Oklahoma; (b) CEC and CMC each has the corporate
power to carry on its business as now being conducted; (c)
the Exchange Shares to be issued in exchange for the APC
Common Stock have been duly authorized and, immediately
after the Closing Date, will be duly and validly issued and
will be fully paid and nonassessable; (d) CEC and CMC each
has the requisite corporate power and authority and has
taken all requisite corporate action necessary to enable it
to execute and deliver this Agreement and to consummate the
transactions contemplated thereby; and (e) this Agreement
has been duly and validly executed and delivered by CEC and
CMC.

In rendering such opinion, counsel may rely, to the extent
counsel determines such reliance necessary or appropriate,
upon opinions of local counsel as to matters of law other
than that of the United States and Oklahoma and, as to
matters of fact, upon certificates of state officials and
of any officer or officers of CEC provided the extent of
such reliance is specified in this opinion.

7.6 Registration Rights Agreement. CEC shall have executed and
delivered to AP a Registration Rights Agreement.

7.7 CEC Common Stock Price. As of the last trading day
preceding the Closing Date, the per share closing price of
the CEC Common Stock shall not be less than Four Dollars
($4.00).

7.8 Schedules and Exhibits. The AP Group shall have received
and reviewed all of the Schedules and Exhibits to be
provided by the CEC Group which are not attached hereto as
of the date of execution of this Agreement and such
Schedules and Exhibits shall not be materially different
than anticipated by the AP Group.

8. Termination of Agreement and Abandonment of Transaction. Anything
herein to the contrary notwithstanding, this Agreement and the transaction
contemplated hereby may be terminated at any time before the Closing, whether
before or after approval of this Agreement by the Partners of AP and CEC as
follows, and in no other manner:

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<PAGE> 30
8.1 Mutual Consent. By mutual consent of CEC and the Partners
of AP.

8.2 By CEC. By the CEC Group if, by the Closing Date, the
conditions set forth in Section 6 shall not have been met
(or waived as provided in this Agreement).

8.3 By AP. By the Partners of AP if, by the Closing Date, the
conditions set forth in Section 7 shall not have been met
(or waived as provided in this Agreement).

8.4 By Either CEC or AP. By CEC or AP if any governmental body
shall have issued an order, decree or ruling, or taken any
other action, permanently enjoining, restraining or
otherwise prohibiting the transactions contemplated hereby
and such order, decree, ruling or other action shall have
become final and non-appealable.

8.5 Termination of Agreement. In the event of termination of
this Agreement as provided in this Section 8, this
Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of any
party hereto. Nothing contained in this Section shall
relieve any party from liability for any breach of the
representations, warranties, covenants or agreements set
forth in this Agreement.

9. Additional Agreements of the Parties.

9.1 Closing/Post Closing Working Capital Adjustments. On or
prior to the Closing Date, APC shall declare a dividend to
APC's stockholders of record on the day preceding the
Closing Date in an amount equal to APC's positive Net
Working Capital (as hereinafter defined) as of the
Effective Time. Once declared, the dividend shall not be
rescinded, modified or otherwise changed without the
written consent of APC and CMC and shall be treated as an
obligation of APC. The dividends shall be paid as
hereinafter provided in this Section 9. If the Net Working
Capital of APC is a negative number, AP shall make a
capital contribution to APC (or shall make a payment to CEC
after the exchange) of the Net Working Capital negative
amount. Payment of the capital contribution shall be made
as hereinafter provided in this Section 9.1 as of the
Effective Time.

9.1.1 Net Working Capital. As used herein, the
"Net Working Capital" of APC and AGM shall
mean the excess of APC's and AGM's cash and
cash equivalents, inventory, accounts
receivable, including joint interest billings
and accrued oil and gas revenues, net of bad
debt reserves, over their respective accrued
and unpaid federal, state and local tax
liabilities, accounts payable, including
lease operating expenses, severance taxes,
revenues and royalties due others and accrued
capital items, including drilling costs,
recompletion costs, capitalized workover
costs, leasehold

25
<PAGE> 31
acquisition costs, etc., determined as of the
Effective Time in accordance with generally
accepted accounting principles, as
historically applied to APC, AGM or their
respective predecessors in interest. As
further adjusted to credit AP for the capital
costs incurred to develop proved undeveloped
reserves as set forth in Schedule "9.1.1" and
adjusted for any booked financial liability
owing on the Production Payments.

9.1.2 Actual Net Working Capital. Within 90 days
after the Closing Date, AP and CEC will agree
on the actual Net Working Capital of APC. If
AP and CEC do not agree on the actual Net
Working Capital of APC within 90 days after
the Closing Date, then all items remaining in
dispute will be submitted within ten (10)
days thereafter to an independent accounting
firm of national reputation mutually
acceptable to AP and CEC (the "Neutral
Auditors"). If AP and CEC are unable to
agree on the Neutral Auditors, then AP and
CEC shall request the American Arbitration
Association to appoint the Neutral Auditors.
All fees and expenses relating to appointment
of the Neutral Auditors and the work, if any,
to be performed by the Neutral Auditors will
be borne equally by AP and CEC. The Neutral
Auditors will deliver to AP and CEC a written
determination (such determination to include
a worksheet setting forth all material
calculations used in arriving at such
determination and to be based solely on
information provided to the Neutral Auditors
by CEC and AP, or their respective
affiliates) of the disputed items within 30
days of receipt of the disputed items, which
determination will be final, binding and
conclusive. The final, binding and conclusive
Closing Date Worksheet, which either is
agreed upon by AP and CEC or is delivered by
the Neutral Auditors in accordance with this
Section 9.1.2 is referred to herein as the
"Conclusive Worksheet."

9.1.3 Agreement on Conclusive Worksheet. Promptly
following agreement on or delivery of the
Conclusive Worksheet, the parties shall
account to each other, by cash payments, so
that: (a) if the Net Working Capital as
reflected in the Conclusive Worksheet is a
positive number as of the Effective Time, AP
shall receive, after giving effect to
previous payments, if any, received by AP, an
aggregate amount of cash payments equal to
the actual Net Working Capital as so
reflected; or (b) if the Net Working Capital
as reflected in the Conclusive Worksheet is a
negative number, APC shall have received,
after giving effect to the previous payments,
if any, received by APC, an aggregate amount
of cash payments equal to the actual Net
Working Capital deficit as so reflected.

26
<PAGE> 32
9.2 Production Payments. The Real Property Interests owned by
APC include a group of producing oil and gas leases (the
"Subject Interests") which are burdened by certain
production payments created under certain instruments
entitled "Conveyance of Production Payment," which
instruments and amendments thereto are described in
Schedule "3.9" attached hereto (collectively, the
"Production Payments"). AP will cooperate and assist the
CEC Group in any manner reasonably requested by the CEC
Group in connection with the Production Payments.

9.3 Royalty, Working Interest and Tax Liabilities. During the
survival period set forth in Section 10.4 of this
Agreement, AP will assume, defend and be solely responsible
for any claim that royalty, production payment, net profits
interest, working interest, production tax or similar
payments made by APC, AP or any of its subsidiaries on
crude oil, condensate, natural gas, natural gas liquids or
other hydrocarbon products: (a) sold by the AP Group or any
of its subsidiaries to an affiliate of any of them; or (b)
transferred by the AP Group or any of its subsidiaries
under in-kind exchange agreements; were inaccurate or
insufficient by reason of the price of or value ascribed to
the products sold or transferred; provided, however, AP
shall not be required to defend or have any liability for
any claim arising after the Closing Date and CMC shall
defend and be solely responsible for all post Closing Date
claims even if asserted in the same action as claims for
which AP is responsible.

9.4 Intercompany Payables. AP shall pay and cause the AP Group
(excluding APC) to pay all sums owed by the AP Group to
APC, including without limitation, any and all gas
balancing obligations, promptly in accordance with the
applicable operating agreement.

9.5 Schedule Disclosures. A disclosure by AP or the CEC Group
in any schedule to this Agreement shall be deemed an
exception to any representation or warranty herein made by
either of them to the extent that the information disclosed
would be necessary to make a particular representation or
warranty true.

9.6 Tax Return and Reorganization Information. The CEC Group
shall prepare the 1997 federal and state income tax returns
for APC for the period after the Effective Time and deliver
them to AP except to the extent they are included in
consolidated tax returns of CEC. AP will prepare the
federal and state tax returns for APC for the period
preceding the Effective Time and will deliver them to CEC.
AP and CEC shall cooperate with each other in the
preparation of those returns. The CEC Group and AP agree to
file as a part of their federal tax return for the taxable
year during which the Closing Date occurs all information
required by U.S. Treasury Regulation sec. 1.368-3.

9.7 Preservation of Books and Records. For a period of five
(5) years after the Closing Date, CEC and AP shall, using
procedures consistent with their current record retention
procedures: (a) preserve and retain all books and

27
<PAGE> 33
records held by either of them or their subsidiaries that
relate to the Oil and Gas Business including, but not
limited to, any documents relating to any governmental or
nongovernmental actions, suits, proceedings or
investigations arising out of the conduct of those
businesses before the Closing Date (the "Records"); and (b)
subject to mutually acceptable confidentiality requirement,
make the Records available to each other and their
respective agents upon reasonable notice and at reasonable
times, it being understood that either party shall be
entitled to make copies of any of the Records at the
copying party's expense. CEC and AP further agree not to
destroy any of the Records in their possession for a period
of five (5) years after the Closing Date unless the party
proposing to destroy the Records, or some portion thereof,
gives the other party notice of the proposed destruction
and a reasonable opportunity, at the other party's expense,
to take possession of the Records designated for
destruction. CEC and AP further agree to cooperate with
each other, including reasonable access to their respective
employees, in providing additional information and
explanations concerning the Records.

10. General Provisions.

10.1 Amendments. Subject to applicable law, this Agreement and
the form of any exhibit attached hereto may be amended upon
written agreement of the parties hereto at any time prior
to the Closing.

10.2 Survival of Covenants, Representations and Warranties. The
respective representations and warranties of the CEC Group
and AP contained in this Agreement shall be deemed made as
of the Closing and all covenants and undertakings required
to be performed, unless otherwise specifically herein
provided, shall survive the Closing, but shall terminate
two (2) years after the Closing Date.

10.3 Certain Definitions. As used in Section 6.4 of this
Agreement, a "Material Adverse Effect" on APC is an event
or condition that has an adverse financial impact of more
than One Million Dollars ($1,000,000.00) on APC. The
statement that the representations and warranties of the AP
Group are to be "Substantially True" at the Closing shall
be true if the cumulative adverse financial impact of all
untrue representations and warranties of the AP Group at
Closing is less than One Million Dollars ($1,000,000.00).
Notwithstanding anything else in this Agreement to the
contrary, no event resulting from general economic
conditions, no occurrence or condition affecting oil and
gas industry generally and no occurrence or condition
arising out of the transactions contemplated by this
Agreement or the public announcement thereof shall be
considered adverse or make any representation or warranty
herein untrue. With respect to the Real Property Interests
representations and warranties "good and defensible title"
means with respect to each Oil and Gas Interest, such title
that: (i) entitles APC to receive (free and clear of all
royalties, overriding royalties, net profits interests or
other burdens on or measured by production of hydrocarbons
and associated gases) not less than

28
<PAGE> 34
the "Net Revenue Interests" set forth on Schedule 3.3.1 of
all oil, gas, sulfur and associated liquid and gaseous
hydrocarbons and other associated gases produced, saved and
marketed from the Oil and Gas Interest for the productive
life of such Oil and Gas Interest (ii) obligates APC to
bear costs and expenses relating to the maintenance,
development and operation of such Oil and Gas Property in
an amount not grater than the "Working Interests" set forth
on Schedule 3.3.1 for the productive life of such Oil and
Gas Property; and (iii) is free and clear of any and all
encumbrances, liens and defects, other than the Production
Payments.

10.4 Survival and Indemnification. The AP Group shall indemnify
and hold the CEC Group harmless, at all times from and
after the Closing Date, against and in respect to any
Damages, provided that the AP Group shall not be liable for
any Damages unless the amount of all such Damages exceed
$1,000,000 in the aggregate and, in such event, the amount
of Damages shall not include the first such $1,000,000
thereof. The term "Damages" means any claims, actions,
demands, lawsuits, costs, expenses, liabilities, penalties
and damages (including counsel fees incidental thereto or
incidental to the enforcement by the CEC Group of this
Agreement) resulting to the CEC Group, net of any insurance
proceeds received by the CEC Group in reimbursement of such
Damages, from: (a) any inaccurate representation made to
the CEC Group in or pursuant to this Agreement; and (b) any
breach of any of the warranties made to the CEC Group in or
pursuant to this Agreement.

10.4.1. Indemnification Procedure. If any
party hereto discovers or otherwise becomes
aware of an indemnification claim arising
under this Agreement, such indemnified party
shall give written notice to the indemnifying
party, specifying such claim, and may
thereafter exercise any remedies available to
such party under this Agreement; provided,
however, that the failure of any indemnified
party to give notice as provided herein shall
not relieve the indemnifying party of any
obligations hereunder, to the extent the
indemnifying party is not materially
prejudiced thereby. Further, promptly after
receipt by an indemnified party hereunder of
written notice of the commencement of any
action or proceeding with respect to which a
claim for which indemnification may be made
against any indemnifying party, give written
notice to the latter of the commencement of
such action; provided however that the
failure of any indemnified party to give
notice as provided herein shall not relieve
the indemnifying party of any obligations
hereunder, to the extent the indemnifying
party is not materially prejudiced thereby.

10.4.2. Defense. If any such action is brought
against an indemnified party, the
indemnifying party shall be entitled to
participate in and to assume the defense
thereof, jointly with any other indemnifying
party similarly notified, to the extent that
it may wish, with

29
<PAGE> 35
counsel reasonably satisfactory to such
indemnified party, and after such notice from
the indemnifying party to such indemnified
party of its election so to assume the
defense thereof, the indemnifying party shall
not be liable to such indemnified party for
any legal or other expenses subsequently
incurred by the latter in connection with the
defense thereof unless the indemnifying party
has failed to assume the defense of such
claim and to employ counsel reasonably
satisfactory to such indemnified person. An
indemnifying party who elects not to assume
the defense of a claim shall not be liable
for the fees and expenses of more than one
counsel in any single jurisdiction for all
parties indemnified by such indemnifying
party with respect to such claims or with
respect to claims separate but similar or
related in the same jurisdiction arising out
of the same general allegations.
Notwithstanding any of the foregoing to the
contrary, the indemnified party will be
entitled to select its own counsel and assume
the defense of any action brought against it
if the indemnifying party fails to select
counsel reasonably satisfactory to the
indemnified party, the expenses of such
defense is to be paid by the indemnifying
party. No indemnifying party shall consent
to entry of any judgment or enter into any
settlement with respect to a claim without
the consent of the indemnified party, which
consent shall not be unreasonably withheld,
or unless such judgment or settlement
includes as an unconditional term thereof the
giving by the claimant or plaintiff to such
indemnified party of a release from all
liability with respect to such claim. No
indemnified party shall consent to entry of
any judgment or enter into any settlement of
any such action, the defense of which has
been assumed by an indemnifying party,
without the consent of such indemnifying
party, which consent shall not be
unreasonably withheld.

10.5 Governing Law. This Agreement and the legal relations
between the parties shall be governed by and construed in
accordance with the laws of the State of Oklahoma.

10.6 Notices. All notices, requests, demands or other
communications required or permitted by this Agreement
shall be in writing and effective when received, and
delivery shall be made personally or by registered or
certified mail, return receipt requested, postage prepaid,
or overnight courier or confirmed facsimile transmission,
addressed as follows:

30
<PAGE> 36

IF TO THE CEC GROUP:

Chesapeake Energy Corporation
Chesapeake Merger II Corp.
6100 North Western Avenue
Oklahoma City, Oklahoma 73118

Attention: Aubrey K. McClendon
Chairman and Chief
Executive Officer
Facsimile No. (405) 848-8588

WITH A COPY TO:

Self, Giddens & Lees, Inc.
2725 Oklahoma Tower, 210 Park Avenue
Oklahoma City, Oklahoma 73102

Attention: C. Ray Lees, Esquire
Facsimile No. (405) 232-5553

IF TO THE AP GROUP:

AnSon Partners Limited Partnership
AnSon Production Corporation
4005 Northwest Expressway
Oklahoma City, Oklahoma 73116

Attention: Mr. Carl Anderson, III
Facsimile No. (405) 879-3810

WITH A COPY TO:

Gable Gotwals Mock Schwabe Kihle Gaberino
211 North Robinson, 15th Floor
Oklahoma City, Oklahoma 73102

Attention: Randall D. Mock, Esquire
Facsimile No. (405) 235-2875

10.7 No Assignment. This Agreement may not be assigned by
operation of law or otherwise

10.8 Fees and Expenses. All fees and expenses, including
attorneys' fees, incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by
the respective party who has incurred such fee or expense.

31
<PAGE> 37
10.9 Headings. The descriptive headings of the Sections and
paragraphs of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.

10.10 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties
hereto and delivered to each of the other parties hereto.

10.11 Entire Agreement. This Agreement and the other agreements
contemplated hereby constitutes the entire agreement among
the CEC Group and AP with respect to the subject matter
hereof. Unless this Agreement is specifically amended in
writing, it supersedes all other agreements and
understandings among the parties with respect to the
subject matter hereof and thereof.

10.12 Publicity. The initial press release relating to this
Agreement shall be a joint press release and thereafter AP
and CEC shall, subject to their respective legal
obligations (including requirements of the stock exchange
and other similar regulatory bodies), consult with each
other, and use reasonable efforts to agree upon the text of
any press release before issuing any such press release or
otherwise making public statements with respect to the
transactions contemplated hereby.

10.13 No Third Party Beneficiaries. Nothing in this Agreement,
whether express or implied, is intended to confer any
rights or remedies under or by reason of this Agreement on
any person other than the parties to it, nor is anything in
this Agreement intended to relieve or discharge the
obligation or liability of any third persons to any party
to this Agreement, nor shall any provision give any third
persons any rights of subrogation or action over or against
any party to this Agreement.

10.14 Specific Performance. The CEC Group and the AP Group each
acknowledge that neither the CEC Group nor AP would have an
adequate remedy at law for money damages in the event that
this Agreement were not performed in accordance with its
terms, and therefore, agree that the CEC Group and AP each
shall be entitled to specific enforcement of the terms
hereof in addition to any other remedy to which it may be
entitled, at law or in equity.

10.15 Partial Illegality or Unenforceability. Wherever possible,
each provision hereof shall be interpreted in such manner
as to be effective under applicable law, but in case any
one or more of the provisions contained herein shall, for
any reason, be held to be illegal or unenforceable in any
respect, such illegality or unenforceability shall not
affect any other provision of this Agreement, and this
Agreement shall be construed as if such illegal or
unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or
provisions would result in such a material

32
<PAGE> 38
change as to cause completion of the transactions
contemplated hereby to be unreasonable.

IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.

CHESAPEAKE ENERGY CORPORATION,
an Oklahoma Corporation

By: /s/ AUBREY K. McCLENDON
----------------------------
Aubrey K. McClendon
Chief Executive Officer

CHESAPEAKE MERGER II CORP., an
Oklahoma Corporation

By: /s/ AUBREY K. McCLENDON
----------------------------
Aubrey K. McClendon,
President

ANSON PARTNERS LIMITED
PARTNERSHIP, an Oklahoma
Limited Partnership

By: /s/ CARL B. ANDERSON, III
----------------------------
Carl B. Anderson, III, Sole
General Partner

ANSON PRODUCTION CORPORATION,
an Oklahoma corporation

By: /s/ CARL B. ANDERSON, III
----------------------------
Carl B. Anderson, III,
President

<PAGE> 1
EXHIBIT 2.6

FIRST AMENDMENT TO
MERGER AGREEMENT AND
PLAN OF REORGANIZATION

AMONG

CHESAPEAKE ENERGY CORPORATION,

CHESAPEAKE MERGER II CORP.

AND

ANSON PARTNERS LIMITED PARTNERSHIP

DECEMBER 15, 1997

<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. Amendment to Section 1.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

3. Amendment of Section 1.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

4. Amendment to Section 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

5. Amendment to Section 9.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

6. Amendment of Exhibit 1.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

7. Supersession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
</TABLE>

EXHIBITS

"1.9" Form of Registration Rights Agreement

i
<PAGE> 3
FIRST AMENDMENT TO
MERGER AGREEMENT AND
PLAN OF REORGANIZATION

THIS FIRST AMENDMENT TO MERGER AGREEMENT AND PLAN OF
REORGANIZATION (the "Agreement"), is entered into this 15th day of December,
1997, among CHESAPEAKE ENERGY CORPORATION, an Oklahoma corporation ("CEC"),
CHESAPEAKE MERGER II CORP., an Oklahoma corporation ("CMC"), ANSON PARTNERS
LIMITED PARTNERSHIP, an Oklahoma limited partnership ("AP") and ANSON
PRODUCTION CORPORATION, an Oklahoma corporation ("APC").

R E C I T A L S :

A. AP, APC, CEC and CMC have entered into that certain Merger
Agreement and Plan of Reorganization dated October 22, 1997 (the "Merger
Agreement") and such parties desire to amend the Merger Agreement pursuant to
this First Amendment to Merger Agreement and Plan of Reorganization (the
"Amendment") to: (a) extend the Closing Date; (b) amend the terms of the
adjustment to merger consideration; and (c) to delete the Registration Rights
Agreement attached to the Merger Agreement and substitute therefor, the
Registration Rights Agreement attached to this Amendment.

NOW, THEREFORE, for and in consideration of the recitals and
the mutual covenants and agreements set forth in this Amendment and for the
purpose of amending the terms and conditions for the Merger, the parties hereby
agree as follows:

1. Definitions. Unless otherwise defined herein, all terms defined in
the Merger Agreement will have the same meanings herein as therein defined.

2. Amendment to Section 1.7. Section 1.7 of the Merger Agreement
entitled "Payment and Conversion" is hereby deleted in its entirety and the
following Section 1.7 i hereby substituted therefor:

"1.7 Payment and Conversion. Subject to the terms and conditions
of this Agreement, on the Closing Date, pursuant to the
Oklahoma Act, APC will be merged with and into CMC and upon
such Merger, the APC Shares will be automatically converted
into the right to receive the number of shares of CEC Common
Stock determined by dividing FORTY-THREE MILLION DOLLARS
($43,000,000.00) by the Exchange Price (the "Exchange
Shares"). The AP Group and the CEC Group hereby agree that
the "Exchange Price" will be $11.3375 which was determined by
adding the closing price of the CEC Common Stock as quoted on
the New York Stock Exchange as of the close of business on the
third (3rd) through the twelfth (12th) business trading days
preceding October 31, 1997 and dividing the sum by ten (10).
The number of Exchange Shares will be rounded up to the
nearest whole number and no fractional shares will be issued."
<PAGE> 4
3. Amendment of Section 1.9. Section 1.9 of the Merger Agreement
entitled "Adjustment to Merger Consideration" is hereby deleted in its entirety
and the following Section 1.9 is hereby substituted therefor:

"1.9 Adjustment to Merger Consideration. CEC and AP hereby agree
that in connection with the sale of any Exchange Shares during
the Adjustment Period (hereinafter defined), as set forth in
the Registration Rights Agreement attached hereto as Exhibit
1.9 (the "Registration Rights Agreement"): (a) to the extent
that the proceeds received by AP net of the amount of the
underwriting discounts and commissions on a per share basis,
as adjusted to account for any stock splits, stock dividends
or other distributions (excluding cash dividends) in respect
of the Exchange Shares (the "Per Share Price") does not equal
or exceed the Exchange Price, CEC will or will cause CMC to
pay to AP an amount equal to the difference between the Per
Share Price and the Exchange Price multiplied by the number of
Exchange Shares actually sold pursuant to such registration;
and (b) to the extent the Per Share Price exceeds one-hundred
twenty percent (120%) of the Exchange Price, AP will pay CEC
an amount equal to the difference in the Per Share Price and
one hundred twenty percent (120%) of the Exchange Price
multiplied by the number of Exchange Shares actually sold
pursuant to such registration. As used in this paragraph, the
term "Adjustment Period" means the period commencing on the
day in April, 1998 on which AP first sells Exchange Shares and
continuing for thirty (30) days thereafter, regardless of how
many New York Stock Exchange trading days actually occur
during such thirty (30) day period. AP hereby covenants and
agrees that all sales of Exchange Shares will be made in a
commercially reasonable manner so as not to unduly create
price fluctuation in the Common Stock. Any cash adjusting
payments to be made pursuant to this Section 1.9 will be made
by the party owing payment within five (5) days after the
final account has been made and agreed to by CEC and AP."

4. Amendment to Section 2. Section 2 of the Merger Agreement entitled
"Closing" is hereby deleted in its entirety and the following Section 2 is
hereby substituted therefor:

"2. Closing. Subject to the terms and provisions hereof, the
closing of the transactions provided for herein (the
"Closing") shall occur at 10:00 a.m. at the offices of Self,
Giddens & Lees, Inc., 2725 Oklahoma Tower, Oklahoma City,
Oklahoma on or before December 19, 1997 (the "Closing Date")
unless another date, time or place is agreed to in writing by
the parties hereto, but in any event will be effective as of
12:01 a.m. Oklahoma time on November 1, 1997 (the "Effective
Time")."

5. Amendment to Section 9.2. Section 9.2 of the Merger Agreement
entitled "Production Payments" is hereby amended by the addition thereto of the
following sentence:

"Notwithstanding the two (2) year limitation set forth in
Section 10.2 of this Agreement, AP hereby agrees that the
indemnification provisions set forth in

2
<PAGE> 5
Section 10.4 hereof will apply in all respects relating to the
Production Payments for the entire life of the Production Payments.

6. Amendment of Exhibit 1.9. The form of Registration Rights Agreement
attached to the Merger Agreement as Exhibit 1.9 is hereby deleted in its
entirety and the form of Registration Rights Agreement attached hereto as
Exhibit 1.9 is hereby substituted therefor.

7. Supersession. It is agreed and understood between AP, APC, CEC and
CMC that: (a) except to the extent the Merger Agreement is amended by this
Amendment, the Merger Agreement will remain in full force and effect; (b) the
Merger Agreement as amended by this Amendment supersedes any and all prior
agreements entered into between the parties; (c) subject to the satisfactory
performance of the terms and conditions stated in the Merger Agreement unless
otherwise stated herein, this Amendment will be effective as of the date hereof
but will be binding on the parties only after execution hereof by all parties
hereto; and (d) in all respects, except as specifically amended hereby, the
Merger Agreement remains in full force and effect and unabated and AP, APC, CEC
and CMC hereby reaffirm each and every representation, warranty, covenant or
condition made in the Merger Agreement as if and to the same extent as if made
on the date of the execution of this Amendment.

8. Counterparts. This Amendment may be executed in multiple
counterparts, each of which will be an original instrument, but all of which
will constitute one agreement.

IN WITNESS WHEREOF, the parties have executed and delivered
this Amendment as of the day and year first above written.

CHESAPEAKE ENERGY CORPORATION,
an Oklahoma Corporation

By: /s/ AUBREY K. McCLENDON
----------------------------
Aubrey K. McClendon
Chief Executive Officer

CHESAPEAKE MERGER II CORP., an
Oklahoma Corporation

By: /s/ AUBREY K. McCLENDON
----------------------------
Aubrey K. McClendon,
President

3
<PAGE> 6
ANSON PARTNERS LIMITED
PARTNERSHIP, an Oklahoma
Limited Partnership

By: /s/ CARL B. ANDERSON, III
----------------------------
Carl B. Anderson, III, Sole
General Partner

ANSON PRODUCTION CORPORATION,
an Oklahoma corporation

By: /s/ CARL B. ANDERSON, III
----------------------------
Carl B. Anderson, III,
President

<PAGE> 1
EXHIBIT 5.1

[Andrews & Kurth L.L.P. Letterhead]

April 20, 1998

Board of Directors
Chesapeake Energy Corporation
6100 North Western Avenue
Oklahoma City, Oklahoma 73118

Gentlemen:

We have acted as counsel to Chesapeake Energy Corporation, an
Oklahoma corporation (the "Company"), in connection with the Company's
Registration Statement on Form S-3 (the "Registration Statement") relating to
the registration under the Securities Act of 1933, as amended (the "Act"), of
the offering by the selling stockholders named in the Registration Statement of
up to 6,683,129 shares of the Company's common stock, $.01 par value (the
"Shares").

In connection herewith, we have examined copies of such
statutes, regulations, corporate records and documents, certificates of public
and corporate officials and other agreements, contracts, documents and
instruments as we have deemed necessary as a basis for the opinion hereafter
expressed. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity with the original documents of all documents submitted to us as
copies. We have also relied, to the extent we deem such reliance proper, upon
information supplied by officers and employees of the Company with respect to
various factual matters material to our opinion.

Based on the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized and are validly issued, fully paid and nonassessable.

We hereby consent to the use of this opinion as an exhibit to
the Registration Statement and to the use of our name under the heading "Legal
Matters" in the Registration Statement.

Very truly yours,

/s/ Andrews & Kurth L.L.P.

1198/1173/2677

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this registration
statement on Form S-3 of our report dated March 20, 1998, on our audits of the
consolidated financial statements of Chesapeake Energy Corporation as of
December 31, 1997 and for the six month period then ended, and as of June 30,
1997 and 1996 and for the years then ended. We also consent to the references
to our firm under the caption "Experts".

/s/ Coopers & Lybrand L.L.P.

COOPERS & LYBRAND L.L.P.

Oklahoma City, Oklahoma
April 20, 1998

<PAGE> 1
EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this registration
statement of Chesapeake Energy Corporation on Form S-3 of our report dated
September 20, 1995, except for the fourth paragraph of Note 9 which is as of
October 9, 1997, and except for the earnings per share information in Note 1,
which is as of March 24, 1998, appearing on page 39 of the Chesapeake Energy
Corporation Form 10-K, on our audit of the consolidated financial statements of
Chesapeake Energy Corporation for the year ended June 30, 1995. We also consent
to the reference to our firm under the caption "Experts".

/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP

Houston, Texas
April 20, 1998

<PAGE> 1

EXHIBIT 23.4

CONSENT OF WILLIAMSON PETROLEUM CONSULTANTS, INC.

As independent oil and gas consultants, Williamson Petroleum
Consultants, Inc. hereby consents to the references to our firm and to our
reserve report entitled "Evaluation of Oil and Gas Reserves to the Interests of
Chesapeake Energy Corporation in Certain Properties in Louisiana and Texas,
Effective December 31, 1997, for Disclosure to the Securities and Exchange
Commission, Williamson Project 7.8569" dated March 12, 1998 in the Transition
Report on Form 10-K of Chesapeake Energy Corporation incorporated by reference
into the Prospectus constituting part of the Registration Statement on Form S-3
of Chesapeake Energy Corporation to be filed with the Securities and Exchange
Commission on or about April 20, 1998.

/s/ Williamson Petroleum Consultants, Inc.

WILLIAMSON PETROLEUM CONSULTANTS,INC.

Houston, Texas
April 16, 1998

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EXHIBIT 23.5

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

As independent oil and gas consultants, Netherland, Sewell &
Associates, Inc. hereby consents to the references to our firm and to our
reserve report dated December 31, 1997 in the Transition Report on Form 10-K of
Chesapeake Energy Corporation incorporated by reference into the Prospectus
constituting part of the Registration Statement on Form S-3 of Chesapeake
Energy Corporation to be filed with the Securities and Exchange Commission on
or about April 20, 1998.

NETHERLAND, SEWELL & ASSOCIATES, INC.

By: /s/ Frederic D. Sewell
------------------------------------
Frederic D. Sewell
President

Dallas, Texas
April 20, 1998

<PAGE> 1

EXHIBIT 23.6

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS AND GEOLOGISTS

As independent oil and gas consultants, Porter Engineering Associates
hereby consents to the references to our firm and to our reserve report dated
December 31, 1997 in the Transition Report on Form 10-K of Chesapeake Energy
Corporation incorporated by reference into the Prospectus constituting part of
the Registration Statement on Form S-3 of Chesapeake Energy Corporation to be
filed with the Securities and Exchange Commission on or about April 20, 1998.

PORTER ENGINEERING ASSOCIATES

By: /s/ JOE H. PORTER
-------------------------------------
Joe H. Porter, PE

Oklahoma City, Oklahoma
April 20, 1998