Aubrey McClendon falls off Forbes billionaire list
Outgoing Chesapeake Energy Corp. CEO Aubrey McClendon is no longer a billionaire, according to the latest Forbes list of the wealthiest people on the planet.
The magazine points out that McClendon was forced to sell nearly all his Chesapeake shares in a 2008 margin call.
Chesapeake announced last month that McClendon will leave the company he founded on April 1 with a severance package worth about $47 million.
McClendon is falling off the list as it has been revealed that he’s leveraged against his personally held oil and gas interests in the same way he did with Chesapeake leading up to 2008. Put another way, the guy has mounds of debt,” Forbes reported.
Five Oklahoma families remain on the list this year, led by Continental Resources Inc. CEO Harold Hamm, who ranked No. 90 overall with a net worth of $11.3 billion.
Hamm was followed by Tulsa oilman and Bank of Oklahoma Chairman George Kaiser at $10 billion and ranked No. 109 overall.
Hobby Lobby founder David Green is listed at No. 276 with an estimated net worth of $4.5 billion.
Oklahoma retailers Tom and Judy Love tied with Lynn Schusterman — widow of Samson Resources’ Charles Schusterman — to round out the state’s presence on the list at No. 384 with a net worth of $3.5 billion.
Report: Chesapeake selling Bakken Shale acreage
Chesapeake Energy Corp. prides itself on having a leading acreage position in most of the United States’ most productive oil and natural gas plays.
But the Oklahoma City-based company is apparently throwing in the towel in the oil-rich Bakken Shale in North Dakota and Montana.
Upstream, an international oil and gas newspaper, reports Chesapeake is selling its entire 427,000-acre position in the Bakken, acknowledging it used flawed geological concepts when it amassed its position there in 2010 and 2011. The article is available only to subscribers, but free two-week trials are available.
Chesapeake, which does not list its Bakken holdings on its website, did not respond to a request for comment from The Oklahoman on Friday.
Chesapeake’s acreage is concentrated in two counties along what is believed to be the southern edge of the Bakken and Three Forks plays, according to Upstream, but the company’s drilling in that area was not fruitful.
Chesapeake’s inability to find oil there has been called the biggest drilling failure in North Dakota since the 1980s, KXNews reported in January.
Chesapeake now acknowledges it does not have the time or money to continue drilling in its Bakken acreage, Upstream reported, citing its review of sales documents.
Chesapeake has been selling assets since last year to overcome a cash crunch. The company, raised more than $11 billion last year, this week announced a joint venture with China’s Sinopec that will bring in another $1 billion for a stake in acreage in northern Oklahoma’s Mississippi Lime play.
SEC upgrades Chesapeake inquiry, company reports
Chesapeake Energy Corp. on Friday revealed the U.S. Securities and Exchange Commission has upgraded its informal inquiry of the company into a formal investigation.
Chesapeake caught the eye of the SEC’s Fort Worth office last year after Reuters reported CEO Aubrey McClendon took more than $1 billion in shrouded personal loans to fund his stake in the company’s wells. It confirmed the SEC’s informal inquiry in May.
The company’s board, revamped last year amid shareholder unrest, announced last week its review of McClendon’s finances revealed no sign of intentional misconduct.
On Friday, Chesapeake filed its annual report, showing received notice Dec. 21 the SEC would continue its inquiry as an investigation.
“The company, including Mr. McClendon, is providing information to the SEC in connection with this matter. The company is also responding to related inquiries from other governmental and regulatory agencies and self- regulatory organizations,” according to Friday’s filing.
Chesapeake’s board still faces more than a dozen breach of fiduciary duty lawsuits filed by shareholders after news of McClendon’s loan deals emerged last year.
McClendon is leaving the company by April 1, but the board said its review had nothing to do with his departure.
The company also is being investigated by the U.S. Department of Justice for possible antitrust violations in Michigan, where Chesapeake and rival Encana Corp. have admitted to sharing information before lease auctions in 2010. Both companies have denied any wrongdoing.
Chesapeake strikes $1B deal with China’s Sinopec
Chesapeake Energy Corp. announced Monday that it is selling half of its acreage in northern Oklahoma’s oil-rich Mississippi Lime play to China’s Sinopec International Petroleum Exploration and Production Corp. for more than $1 billion.
Sinopec already has an interest in the area, thanks to last year’s $2.5 billion deal with another Oklahoma City oil and natural gas company, Devon Energy Corp.
Chesapeake will sell Sinopec half of its 850,000 acres in the play for $1.02 billion, the company announced Monday.
The two companies will split future exploration and development costs for that acreage, with Chesapeake serving as operator.
“We are excited to announce the execution of our Mississippi Lime joint venture with Sinopec, which moves us further along in achieving our asset sales goals and secures an excellent partner to share the capital costs required to actively develop this very large, liquids-rich resource play,” said Steven C. Dixon, Chesapeake’s chief operating officer.
Chesapeake has been selling assets since last year to close a funding gap between its income and operating costs.
The company, which is facing life without iconic founder Aubrey McClendon, sold more than $11 billion worth of assets to avert a cash crunch last year, with plans to raise as much as $7 billion that way in 2013.
Outgoing CEO Aubrey McClendon not part of Chesapeake’s earnings call
It appears we’ve heard the last of Chesapeake Energy Corp. co-founder Aubrey McClendon before he leaves the company on April 1.
McClendon, the only chief executive Chesapeake has ever had, was not part of the company’s fourth quarter earnings call on Thursday.
The conference call with analysts was led by Steve Dixon and Nick Dell’Osso, the two executives Chesapeake chairman Archie Dunham said last month would lead the company through its transition as McClendon departs the company.
Chesapeake announced Jan. 29 that McClendon had agreed to leave the company.
McClendon has not spoken publicly about his impending departure from the company he founded in 1989 with former partner Tom Ward.
Jeff Mobley, Chesapeake’s senior vice president of investor relations and research, addressed McClendon’s looming separation from the company at the outset of Thursday’s earnings call.
“As you know, Aubrey McClendon, the company’s co-founder and CEO, will retire from the company on April 1, 2013. And after leading the company during our first 80 conference calls, he is now steeping aside for Steve and Nick to lead this call. In addition, a search is currently underway for a new CEO, and the board plans to complete this search by that time.
Aubrey has had a remarkable career founding and leading Chesapeake and has created one of the most valuable and innovative companies in the global energy industry. Two of Aubrey’s most important accomplishments are the tremendous asset base that has been amassed by the company and the talented and dedicated organization he built to develop these assets.
The culture and capabilities of the company Aubrey created and the standards of excellence he championed had been distinctive and inspiring, resulting in a company with extraordinary potential. But his legacy will ultimately be the realization of that potential through the success and value that we all helped deliver after his tenure as CEO concludes. With those thoughts in mind and in behalf of nearly 12,000 employees at Chesapeake, we want to sincerely thank Aubrey for his visionary leadership and for his 24 years of tireless service to the company, to shareholders, to employees, and to the industry.”
Chesapeake expects to have a new CEO in place before April 1, McClendon’s last day at the company.
Report: Chesapeake to help EPA with hydraulic fracturing study
Chesapeake Energy Corp. will let the U.S. Environmental Protection Agency conduct extensive tests at one of its well sites to determine if hydraulic fracturing is safe, the Wall Street Journal reported Wednesday.
The process, commonly known as fracking, is used to extract oil and natural gas from dense rock like shale, but it has been dogged by concerns that it contaminates drinking water.
Chesapeake, one of the nation’s leading oil and gas producers, will allow the EPA to sample water at one of its well sites before and after the well is drilled, an Obama administration official told the Journal.
A Chesapeake spokesman declined to comment on the report Wednesday night.
Texas-based Range Resources Corp. may cooperate with the EPA as well, according to the Journal, if liability concerns can be addressed.
Chesapeake selling more acreage in Oklahoma, Texas
Chesapeake Energy Corp. has two more listings with broker Meagher Energy Advisors as it continues to sell assets to offset a looming budget gap.
The Oklahoma City-based oil and natural gas company has raised $11.1 billion from asset sales this year.
Chesapeake is trying to bring in $14 billion, plus another $19 billion next year, to fund its ongoing operations and reduce debt.
Some of Chesapeake’s smaller offerings have been handled by Meagher, including two recently posted listings.
Chesapeake is selling more than 37,000 net acres in four southern Oklahoma counties and 14 wells in Grayson County, Texas.
The Oklahoma acreage — in Love, Carter, Bryan and Marshall counties — includes 42 wells, with net sales of 1.443 million cubic feet of natural gas and 6 barrels of oil a day over the past year. Chesapeake holds a net royalty interest of 21.39 percent in those wells.
The Texas wells are spread over more than 3,200 acres. Chesapeake’s gross production from those wells last year averaged 1.064 million cubic feet of gas and 52 barrels of oil a day.
Chesapeake also is selling about 28,000 acres in three western Oklahoma counties. That listing has been active since October.
Icahn boosts Chesapeake stake
Carl Icahn
Activist investor Carl Icahn has increased his stake in Chesapeake Energy Corp.
Icahn purchased almost 10 million shares of company stock since last week, according to a regulatory filing. That increases his holdings to nearly 60 million shares.
Icahn, who was part of an investor uprising at Chesapeake this year, now controls almost 9 percent of Chespeake’s 665 million shares of outstanding stock, making him the company’s second largest shareholder behind Memphis-based Southeastern Asset Management.
Icahn and his companies have spent about $951 million, including commissions, to amass its stake in Chesapeake, the filing states. He spent nearly $166 million in the past week to add 9.6 million shares at an average price of $17.42 each.
Chesapeake shares rose in early trading Tuesday after the U.S. Securities and Exchange filing on Icahn’s added stake. It was trading at $17.56 a share, up 9 cents, about noon Tuesday.
VIDEO: Chesapeake CEO Aubrey McClendon on CNBC
In case you missed it, here’s Chesapeake Energy Corp. CEO Aubrey McClendon talking to Jim Cramer on CNBC last night.
Chesapeake adds more Oklahoma acreage to sale list
Chesapeake Energy Corp. is selling more of its acreage in Oklahoma because the cash-strapped company cannot afford to develop it.
A listing for about 28,000 net acres held by Chesapeake in three western Oklahoma counties was listed Thursday on the website of broker Meagher Energy Advisors. The acreage is part of the Granite Wash and Hogshooter horizontal plays.
“Chesapeake is offering this unique exploration and development opportunity because its current drilling budget is not sufficient to fully develop its leasehold in this area,” according to the listing.
The acreage includes 113 producing wells, with net sales of 765 barrels of oil, 684 barrels of natural gas liquids and 9,935 thousand cubic feet of natural gas a day over the past year.
Chesapeake trumpeted its holdings in the Hogshooter play in June as a new discovery expected to provide a significant boost to the company, which is shifting its focus from land acquisition to asset harvest. Officials said that acreage is not the same as the holdings now listed for sale.
“The West Turkey Creek Granite Wash and Hogshooter Wash acreage that is for sale is a small non-core package of acreage and not connected to our significant Hogshooter discovery in Texas that was announced earlier this year,” spokesman Michael Kehs said.
The company has spent much of the year looking to sell assets to overcome a looming cash shortage.
Chesapeake has raised about $11.6 billion this year, but the company is looking to raise as much as $14 billion this year to offset an anticipated budget shortfall.
Chesapeake also is selling acreage in southern Oklahoma, Michigan, Ohio, Colorado and Wyoming through Meagher. Officials have said the company also is looking to find a joint venture partner for its acreage in the Mississippi Lime in northern Oklahoma and southern Kansas.
