Chesapeake CEO Aubrey McClendon will leave April 1
January 30, 2013 10:15 AM
Aubrey McClendon, CEO of the Chesapeake Energy and seen in a 2009 photo, says he'll leave the firm in April, citing philosophical differences with its board of directors.
By Erich Schwartzel Pittsburgh Post-Gazette
Chesapeake Energy CEO Aubrey McClendon will leave the company he co-founded and built into the nation's second-largest natural gas producer on April 1, less than one year after shareholders revolted against the CEO and personal finance decisions he was making at the company.
Mr. McClendon cited "certain philosophical differences with the new board" of his Oklahoma City-based company in a release announcing his retirement Tuesday. He also will leave his seat on the board.
The company said Mr. McClendon's retirement is not related to a pending review by the board of the CEO's financial arrangements, which included a controversial loan program that allowed him to raise money against personal stakes in company wells.
The exit removes one of the energy industry's most high-profile figures. Mr. McClendon's aggressive management of Chesapeake since its founding in 1989 allowed it to amass a huge portfolio of acreage and assets across several formations.
The company's latest series of land grabs included substantial portions of the Marcellus and Utica shales of Pennsylvania, Ohio and West Virginia, where Chesapeake still ranks as one of the top leaseholders.
Mr. McClendon, 53, has been vulnerable since personal mortgages taken out against Chesapeake assets in West Virginia were revealed by the Post-Gazette in March 2012, and later found to be part of a larger national network of undisclosed loans and mortgages.
Mr. McClendon was stripped of his board chairmanship in May, and several new board members were elected at a contentious shareholder meeting in June.
Chesapeake stock, which had lost in excess of $1 billion in market share last year on news of its CEO's personal finances, went up about 10 percent in after-hours trading when the company announced Mr. McClendon's retirement on Tuesday.
A Securities and Exchange Commission investigation into the loan program is pending, and the board will release its own report into Mr. McClendon's finances and business relationships with the company's fourth-quarter earnings on Feb. 21.
"The Board's extensive review to date has not revealed improper conduct by Mr. McClendon," the company said in a statement announcing the retirement.
After his retirement, Mr. McClendon will retain a portion of his stock ownership as well as those personal stakes in Chesapeake rigs. The program that affords him those stakes -- 2.5 percent in every well the company drills -- will not end until June 30, 2014.
"As the company moves towards more fully developing the value of its outstanding assets, Chesapeake is at an important transition in its history and Aubrey and the Board of Directors have agreed that the time has come for the company to select a new leader," said Archie W. Dunham, chairman of the board, in a statement. In an email sent to Chesapeake employees on Tuesday, Mr. Dunham said the company is not for sale.
The company said it will consider internal and external candidates for Mr. McClendon's replacement.
Carl Icahn, the activist investor who led a successful charge last year to gain representation on the Chesapeake board, said Mr. McClendon's legacy is secure.
"I am confident that history will prove that Aubrey has been correct about the value of natural gas in general and the value of Chesapeake in particular," said Mr. Icahn.