Chesapeake Energy announced impressive results from their Eagle Ford operations again. The company's production stretched to more than 36,000 boe/d net, while gross operated production averaged more than 75,000 boe/d. Approximately two-thirds of production is oil, while the rest is split evenly between natural gas liquids and natural gas. The story should just get better as new gathering and midstream infrastructure expected in the fourth quarter of the year will improve price realizations by almost $5/bbl.

Like Marathon and EOG last week, the company is hitting its stride in terms of development and reported costs savings of 15% per well attributable to drilling efficiencies and service costs savings.

Chesapeake now has 337 wells producing, with a whopping inventory of 220 wells that have been drilled, but are not yet producing. It's safe to say their completion and gathering crews have their work cut out for them, but they should be able to catch up. The company announced plans to lower its operated rig count to 25 by year-end, with plans to operate 22 rigs in 2013. That's after averaging almost 33 rigs in the first half of 2012.

Of the 121 wells the company brought on in the second quarter, 110 had initial production rates in excess of 500 boe/d and 37 of those produced more than 1,000 boe/d. Three wells highlighted by the company include:

• Gates 010-CHK-B TR1-D6H in Webb County, TX, with a peak rate of approximately 2,070 boe per day, consisting of 710 bbls of oil, 665 bbls of NGL and 4.2 mmcf of natural gas per day
• Holubar Dim C 2H in Dimmit County, TX, with a peak rate of approximately 1,900 boe per day, consisting of 1,730 bbls of oil, 110 bbls of NGL and 0.4 mmcf of natural gas per day
• Foley MCM A 1H in McMullen County, TX, with a peak rate of approximately 1,500 boe per day, consisting of 1,335 bbls of oil, 55 bbls of NGL and 0.6 mmcf of natural gas per day.

Read more from the company's quarterly release at www.chk.com