Report: Icahn associate to join Chesapeake board
Vincent Intrieri
Carl Icahn associate Vincent Intrieri will become one of Chesapeake Energy Corp.’s new directors, CNBC reported Monday.
Chesapeake declined comment on the report Monday.
Intrieri is senior managing director of Icahn Enterprises LP and has been named to several boards on Icahn’s behalf, including Dynegy Inc., National Energy Group Inc., XO Holdings Inc., WestPoint International Inc., Federal-Mogul Corp. and CVR Energy, which owns the oil refinery in Wynnewood.
Intrieri spoke at Chesapeake’s annual shareholders meeting earlier this month, praising Chesapeake CEO Aubrey McClendon, while also calling for stronger oversight of the company founder.
We believe you are a great oil and gas man, but even great executives need oversight from a board that is focused on creating value,” Intrieri told McClendon at the June 8 meeting. “Good corporate governance is at the essence of all well-run companies. We’re extremely pleased the company has announced a reconstruction of its board. This is a positive step in the right direction.”
Chesapeake has previously announced that by this Friday it will name four new directors — one selected by Icahn and three selected by Southeastern Asset Management, Chesapeake’s largest shareholder.
Director: Chesapeake to make board changes ‘soon’
Former U.S. Sen. Don Nickles declined Tuesday to discuss his future as a member of Chesapeake Energy Corp.’s board of directors, but he predicted an announcement would come “pretty soon.”
The board is searching for a new chairman to replace co-founder and CEO Aubrey McClendon amid questions about Chesapeake’s corporate governance. The company announced last week it would replace four of its directors by June 22 with representatives of its two largest shareholders, Southeastern Asset Management and activist billionaire Carl Icahn.
Nickles, who owns a lobbying firm in Washington, told The Oklahoman’s Washington bureau that he couldn’t talk about his own future. He also declined to make other comments about the board and its makeup until the company announces changes expected later this month.
Nickles was on Capitol Hill to testify before the Senate Finance Committee, on which he once served, about how federal tax reform could affect the oil and gas industry.
Nickles, who also serves on the board of Valero Energy, said his company represents ExxonMobil, Anadarko Petroleum, National Oilwell Varco and other energy-related companies.
National Oilwell Varco’s CEO is Merrill A. “Pete” Miller Jr., another member of Chesapeake’s nine-person board.
Continental’s Harold Hamm testifies at Senate Finance committee
Contential Resources CEO Harold Hamm testifies before a Senate Finance Committee on June 12.
Harold Hamm, founder and CEO of Oklahoma City’s Continental Resources Inc., is testifying this morning before the U.S. Senate Finance committee in Washington, D.C. The hearing is about energy tax policy. Chris Casteel in our Washington bureau is covering the hearing and will have a story later. (Update: Here’s Casteel’s story.)
Hamm also serves as chairman of GOP presidential candidate Mitt Romney’s energy policy committee. Hamm has been an outspoken critic of President Barack Obama’s energy policies, saying they are favoring renewable, green energy projects to the detriment of oil and natural gas producers. Obama has backed the elimination of several tax credits long enjoyed by oil and gas producers.
Also testifying at the hearing is former Oklahoma Sen. Don Nickles, who is now a lobbyist for several energy companies, including ExxonMobil Corp. and Anadarko Petroleum Corp. Nickles is a board member at embattled Chesapeake Energy Corp., which anticipates several changes in its board makeup by June 22.
Former Sen. Don Nickles, R-Oklahoma, testifes before the Senate Finance Committee on June 12.
Devon Energy takes Oklahoma leaders on tour of Canada’s Jackfish oil sands
Workers connect a series of hoses that the supply the moveable drilling rig at Devon Energy's Jackfish oil sands production facility north of Calgary, Canada, in this November 2010 photo. Staff photo by David McDaniel/The Oklahoman
Energy reporter Jay F. Marks is riding along today with Oklahoma leaders on a tour of Devon Energy Corp.’s Jackfish oil sands in Canada. He’ll have a story later this week on the three Devon projects in the Jackfish.
Marks last toured the Jackfish with photographer David McDaniel in November 2010 , when it was a little chillier. That’s one of McDaniel’s pictures above. Today’s weather is expected to be a little warmer: 68F and partly cloudy by this afternoon.
McClendon: Chesapeake done with Sierra Club
Chesapeake Energy Corp. is done with the Sierra Club.
CEO Aubrey McClendon was questioned by the president of the National Center for Public Policy Research about the company’s past donations totaling $26 million to the environmental group at Friday’s annual meeting.
Center President David Ridenour said he was concerned the Sierra Club would use those funds in its new “Beyond Natural Gas” campaign.
McClendon said he has no regrets about working with the Sierra Club to go after the coal industry.
“We’re in a market share struggle with coal,” McClendon said. “As a result of that campaign, 150 new coal plants were not built. That demand will go to natural gas.”
The Sierra Club distanced itself from Chesapeake earlier this year after new executive director Michael Brune rewrote the group’s gift acceptance policy and began to campaign for tougher regulation of the natural gas industry.
On Friday, McClendon said Chesapeake is no longer associated with the Sierra Club.
“Our relationship with them is a little different today than it was a few years ago,” he said.
Ridenour said he was not satisfied to McClendon’s response to his question at Friday’s meeting.
“Mr. McClendon largely ignored my question, ‘By funding Beyond Coal, did you not unnecessarily pick a fight with another fossil fuel industry that now will have every incentive to fund Beyond Natural Gas? It would be darkly amusing if the coal industry did turn out to be funding Beyond Natural Gas, and did have a stipulation in its grant contract limiting the use of the gift to fighting Mr. McClendon’s industry.”
“Since the Sierra Club has been used as a corporate tool in the past, there is no reason to believe that it isn’t being used as one now, so we call upon it to fully disclose who is underwriting Beyond Natural Gas. If the Sierra Club won’t say who is funding its anti-natural gas campaign, we probably can assume there is a conflict of interest in there somewhere.”
“As a representative of a Chesapeake shareholder and an employee of another shareholder, I’m not thrilled that Mr. McClendon gave money to an activist group dedicated to the company’s destruction, but I’m even less happy as an American. Energy independence is important to national security, and low-cost energy is important to American jobs and prosperity. We shouldn’t be fighting things that are good for us.”
Ridenour said he still hopes to find out where Chesapeake’s donations to the Sierra Club went, while letting such groups know that people are watching those types of charitable contributions.
New York comptrollers pleased with Chesapeake board changes
New York State Comptroller Thomas P. DiNapoli, who oversees the state’s common retirement fund, was one of several institutional investors who had called for leadership changes at Chesapeake Energy Corp.
He was pleased that shareholders on Friday voted against retaining two members of the Oklahoma City oil and natural gas company’s board.
“Today’s voting results are a rebuke to the failed leadership of the board of directors of Chesapeake Energy.
Given today’s decisive withhold vote against Chesapeake directors V. Burns Hargis and Richard K. Davidson, it is imperative that the board of directors accept their resignations. To fail to do so would be a direct contradiction of the clear will of a majority of shareholders.
The board should take immediate steps to implement the shareholder proposals that passed today, including proxy access and the elimination of supermajority voting. The days of an entrenched and unaccountable board structure at Chesapeake must be numbered.
In addition, the advisory vote on executive compensation sends a strong message that Chesapeake must overhaul its plan to align the interests of shareholders with management.”
The New York State Common Retirement Fund owned about 3.6 million shares of Chesapeake stock on June 1. Those holdings were worth about $57.2 million.
New York City Comptroller John C. Liu was another also had called on Chesapeake shareholders to vote out Hargis and Davidson, who made up the board’s audit committee.
“Today’s overwhelming vote of no-confidence in two directors was, in fact, a referendum on Chesapeake’s entire board and reflects its failure to protect the company and its shareowners. It will be up to the new board to take tangible steps to restore lost investor confidence and exercise independent oversight of management. An immediate step would be to adopt the proxy access proposal, which a wide majority of shareowners supported today.”
Liu’s office proposed the proxy access measure, which received support from 60 percent of Chesapeake shareholders in Friday’s vote.
STORIFIED: The Chesapeake Energy shareholder meeting
LIVE BLOG: Chesapeake Energy’s annual shareholder meeting
Note: Scroll to the bottom for the most recent updates. You can also follow the play-by-play on Twitter by following @NewsOKEnergy.
9:30 a.m.
OK, let’s fire up the live blog. I’ve started a Storify to collect tweets and links about the Chesapeake shareholder meeting. Also, check out a little preview of the meeting from this morning.
Security is tight at the meeting. One shareholder had to leave his phone in his car after trying to enter the meeting.
9:35 a.m.
CNBC is reporting that as many as seven of the nine Chesapeake directors could resign today.
We have two reporters tucked safely away from shareholders in a separate media room. No pictures are allowed. From our Jay Marks:
Not a lot to see. Room is maybe 20 by 25, with a red-carpeted stage-like area at front, with three monitors that will screen meeting. Nine black draped tables set up with four folding chairs at each one. Array of drinks, fresh fruit at back of the room, with hard copies of relevant materials.
About 20 people here so far.
9:45 a.m.
A Chesapeake spokesman said the board is meeting right now and will break at 10 a.m. to begin the shareholder’s meeting. Meanwhile, there will be a conference call starting around then to talk about the sale announcement from this morning.
9:55 a.m.
Chesapeake has reminded reporters in the media room that no recording is allowed. “We’re not even recording this meeting as a company.”
10 a.m.
An outfit called the National Center for Public Policy Research plans to ask a question about Aubrey McClendon’s Chesapeake’s donations to the Sierra Club a few years ago to help fund the environmental group’s “Beyond Coal” campaign.
Polite applause greets McClendon as the shareholder meeting gets underway.
Denver resident Gerald Armstrong has three minutes to present a proposal for Chesapeake to re-incorporate in Delaware.
10:15 a.m.
We’re into the shareholder proposal section of the meeting. One proposal wanted the company to reincorporate in Delaware. Another asks the company to disclose its lobbying costs and contributions, as well as trade-association funding.
10:20 a.m.
In the published proxy released a few weeks ago, Chesapeake’s board has recommended “No” votes against all the shareholder proposals.
10:25 a.m.
They’re announcing the results of the votes. The only board members up for re-election, Burns Hargis and Richard K. Davidson, did not survive. Hargis, who is also president at Oklahoma State University, received 26 percent. Davidson received 27 percent.
10:30 a.m.
Here’s a rundown of the other proposals:
–Reincorporate in Delaware: 53 percent Yes
–Lobbying disclosure: 36 percent Yes
–Eliminate super-majority requirement: 86 percent Yes
–Proxy access: 60 percent Yes
The meeting portion is over, and McClendon is now presenting an update on operations.
10:40 a.m.
Here’s the official Chesapeake release on preliminary results from the meeting.
The meeting is now open for questions.
A representative of Carl Icahn is speaking from an Icahn letter. From our Jay Marks: “Icahn is pleased with the decision to reconstitute the board that will provide vigilant oversight of McClendon, a ‘great oil and gas man.’ A new chairman can focus on closing the funding gap, reducing debt. The board should consider all strategic alternatives, including potential sale.”
10:45 a.m.
From analyst Alan Edgar (via Jay Marks): Edgar is pleased the company is rebuilding the board, but he’s concerned about low share price and “overwhelming” debt load. Edgar says at least six large oil companies must be lusting over Chesapeake assets. How can the board sell assets while appealing to such suitors, he asks.
10:55 a.m.
Don’t forget, we’re trying to collect live tweets from the shareholder’s meeting over on Storify.
11 a.m.
McClendon is getting questions from shareholders on Sierra Club donations and water consumption in hydraulic fracturing operations.
11:10 a.m.
(via Jay Marks) McClendon rejects the media’s assertion that Chesapeake is not a well-run company. He says people fail to appreciate its successes. He also says people fail to recognize that natural gas will rebound. “American natural gas is the most undervalued resource in the world,” McClendon says
Some closing comments from McClendon: “The board has some work to do.”
All eyes on Chesapeake ahead of this morning’s shareholder meeting
Chesapeake shareholders will gather this morning at the company's corporate campus in Oklahoma City
It’s already shaping up to be a busy morning over at the Chesapeake Energy Corp. campus, just hours ahead of the company’s annual shareholder meeting.
We thought there might be some kind of early morning news, and Chesapeake didn’t disappoint. The company announced a $4 billion sale of its pipeline assets. My colleague Jay Marks has more here.
I took a drive by the Chesapeake campus on the way into the office this morning. A lone satellite truck was set up across Western Avenue, and police officers were stationed at each entry point to campus. A company security officer rolled by in his natural-gas powered Tahoe. I shot the picture above at the corner of NW 63rd and Classen.
For a little more on what to expect from the meeting, check out our preview story this morning. Also check out StateImpact Oklahoma’s preview here. Over at Reuters, they’re expecting some fireworks.
Reporters Adam Wilmoth and Jay Marks will be at the meeting, sequestered safely away from shareholders in a separate media room set up by Chesapeake. I’ll be collecting their reports for a live blog later on, and we’ll be providing live-tweets on our @NewsOKEnergy Twitter account.
While you wait, if you’ve got a few minutes to spare (or 20), check out the latest Reuters special report on the “lavish and leveraged” lifestyle of Chesapeake co-founder and CEO Aubrey McClendon.
Chesapeake announces $4B sale of pipeline assets
Chesapeake Energy Corp. on Friday announced plans to sell its midstream assets for more than $4 billion, giving shareholders some good news heading into this morning’s annual meeting.
Chesapeake will sell its partnership interests in subsidiary Chesapeake Midstream Partners to Global Infrastructure Partners for $2 billion.
The company also announced agreements to sell natural gas gathering and processing assets to Chesapeake Midstream and its stake in Chesapeake Midstream Development LP to Global Infrastructure. Those deals are expected to net more than $2 billion.
“We have been working for the past few months to monetize our substantial and valuable midstream assets and are pleased to announce the sale of our investments in CHKM and a plan to sell our remaining midstream assets at attractive prices,” Chesapeake CEO Aubrey McClendon said.
He said Chesapeake’s ongoing asset sales program is on track to bring in as much as $14 billion this year.
“With our Permian asset sale, Mississippi Lime JV and other miscellaneous asset sales still to come in the second half of the year, we feel very good about our ability to meet our targeted range for 2012 asset sales. “
The Oklahoma City-based oil and natural gas producer has been facing heavy criticism from investors and analysts over the past couple of months amid media scrutiny of the complicated financial dealings of the company and McClendon.
Chesapeake relented to demand from its two largest shareholders this week when it announced plans to replace four of its board members by June 22.
