Tuesday, January 29, 2013

Aubrey McClendon "Retiring" from Chesapeake - Wow!

Chesapeake Energy announced late this afternoon that CEO and co-founder Aubrey McClendon will retire April 1, 2013 (April Fools Day???).  The company was quick to point out that internal investigations of allegations of Aubrey's conflicts of interest have "found no improper conduct."

I guess the ball has been rolling towards this inevitable conclusion since last spring after the revelation of his many "alleged" conflicts of interest involving his personal ownership interest in all Chesapeake wells, much of which has been quietly funded of late by investors brought in to help keep Chesapeake afloat over the past several years.  This crack in the armor was just the opening that activist shareholders like Carl Icahn were waiting for to exert control over the company.  Last year McClendon lost the job of chairman and agreed to cease the "Founder Well Participation Program."

But I have to imagine McClendon put up a fight to keep the CEO job.  Chesapeake is his baby and the company bears his stamp in all aspects, from the aggressive land acquisition strategy to the generous amenities that make CHK one of the Fortune 100 Best Companies to Work For.

But McClendon lost much of his stock in the company in a margin call several years ago, so he isn't sitting pretty on a a billion dollar nest egg.  Nobody will shed a tear for poor Aubrey, as there's a golden parachute waiting for him, but I'm sure this isn't just a job to McClendon.

The company says that it plans to maintain its current capital plan (which downplays natural gas), but we will all be watching to see if there is a change in strategy when a new CEO is appointed later this year.  We will also be watching for Act Two from Aubrey once his non-compete burns off after six months, although somehow I doubt it will involve the Haynesville Shale.

Perhaps the biggest question with the departure of Aubrey from the scene:  who will the anti-frackers hate most now?


Tyler @ Used Drill Rigs said...

So was this a recommended retirement? Seems pretty coincedental after his conflict of interest allegations.

Robert Hutchinson said...

"Retiring" is more of a euphemism for being fired.