Chesapeake Business Practices

[Pete]

The Oklahoman is definitely doing a more thorough job reporting this issue than they have with CHK stories in the past.

Remember, they have a new out-of-state owner and they've also hired back a couple of energy reporters.


If OKC is truly an energy leader, than the local paper should cover that industry like the LA or NY Times covers entertainment. Hopefully these recent changes represent a move in that direction.

[Pete]

I don't think OKC has ever been so at the mercy of a single employer.

If CHK came crashing down not only would there be the loss of 5,000+ (!) very high-paid jobs, the real estate market would take a massive hit in many different ways.


When you combine these realities with the risky nature in which Chesapeake conducts business, you are going to have a lot of concerned parties.

[BoulderSooner]

I realize numbers are in a constant state of flux, but someone needs to let the Chamber know...LOL

according to the OKC economic development trust chk had 4950 OKC employees in JAN and they have continued to hire ... no doubt they have over 5k in OKC right now

[OKCTalker]

Pete posted some OKC employment figures not long ago, but I can't find them. Pete...oh, PETE. Are you out there?

[ou48A]

The biggest problem is the rapid decline of natural gas prices.
Per CNBC its $ 1.91 down .04

This decline is going to continue and be tough on the local economy.
I have heard one report of NG already selling for as low as $1.36 in the field.

[okcpulse]

So...

-Natural gas prices continue to fall
-Oil prices continue to climb gradually
-Chesapeake Energy continues to hire and expand
-Aubrey McClendon takes out over $1.1 billion in personal loans using his stake in marginal wells as backing

Sooner or later, people will get tired of paying $4 a gallon for gasoline, when the gallon equivalent of natural gas at around $1.13. Eventually, the public will be driven to natural gas fueled vehicles.

Is Chesapeake and Aubrey McClendon preparing for something that is not public knowledge? Not trying to live in denial, just trying to look at this from outside the box.

[soonerguru]

So...

-Natural gas prices continue to fall
-Oil prices continue to climb gradually
-Chesapeake Energy continues to hire and expand
-Aubrey McClendon takes out over $1.1 billion in personal loans using his stake in marginal wells as backing

Sooner or later, people will get tired of paying $4 a gallon for gasoline, when the gallon equivalent of natural gas at around $1.13. Eventually, the public will be driven to natural gas fueled vehicles.

Is Chesapeake and Aubrey McClendon preparing for something that is not public knowledge? Not trying to live in denial, just trying to look at this from outside the box.

Interesting question. I would hope so. But we've seen this movie before, and we know McClendon: he's a reckless gambler with other people's money and he cannot seem to manage his own financial affairs. Additionally, he's totally arrogant and thinks he knows more than everyone else. He's been saying for years that nat gas prices are going to go up, and they have gone down (largely because so much of the stuff is sitting in reserve due to so much drilling).

The public can't magically start driving nat-gas fueled vehicles. This would be a seismic shift in the entire auto industry.

Chesapeake is in ridiculous debt, and we're being told "not to worry," we really just don't understand their fancy accounting. THAT is what reminds me of Enron.

I would also like to see what their "assets" really are and how CHK places values on them. What are these "assets": Overpriced real estate in OKC? Overpriced leases for natural gas (which is plunging in value)? Aubrey's wine collection? Who knows?

[jn1780]

So...

-Natural gas prices continue to fall
-Oil prices continue to climb gradually
-Chesapeake Energy continues to hire and expand
-Aubrey McClendon takes out over $1.1 billion in personal loans using his stake in marginal wells as backing

Sooner or later, people will get tired of paying $4 a gallon for gasoline, when the gallon equivalent of natural gas at around $1.13. Eventually, the public will be driven to natural gas fueled vehicles.

Is Chesapeake and Aubrey McClendon preparing for something that is not public knowledge? Not trying to live in denial, just trying to look at this from outside the box.

I know what they think will happen. Problem is their way to early in timing. The global economy will be weighed down by debt for several years to come and I haven't discounted the possibility of a double dip recession. Just this week Europe was having troubles again.

One thing is for sure, I don't see how Cheaspeake can keep expanding as rapidly as they are. They need to chill out and let energy prices catch up.

[OU Adonis]

Does that 4k for CHK include contractors?

[onthestrip]

The problem is, Mike, that you come across as one of those breathless hyperexcited reporters for a 24 hours news channel, all the while proclaiming that you wish you didn't have to do it. It is clear you have more of an agenda than reporting the news that's fit to print. Nothing said here is going to change the business practices of Chesapeake. We're a message board. I rarely read this thread for the same reason I don't watch 24 hour news channels.

Pretty sure that 99% of the time Mike posts something about chpk, it is a link to a story about them that you wouldnt find written by an Oklahoma publication. All he is doing is providing new information. I guess you could remain uninformed or just choose to ignore it and imagine everything is just dandy. But in reality, its not.

It is quite amazing how a company can rack up so much goodwill with charitable donations and good jobs with good benefites that people will get disgusted at someone who is just pointing out the reality of the situation (Betts, Bouldersooner, oklahomanick..)

[Bailey80]

Pretty sure that 99% of the time Mike posts something about chpk, it is a link to a story about them that you wouldnt find written by an Oklahoma publication. All he is doing is providing new information. I guess you could remain uninformed or just choose to ignore it and imagine everything is just dandy. But in reality, its not.

It is quite amazing how a company can rack up so much goodwill with charitable donations and good jobs with good benefites that people will get disgusted at someone who is just pointing out the reality of the situation (Betts, Bouldersooner, oklahomanick..)

I don't like to self promote, but one Oklahoma publication, the Journal Record, has been covering all of these issues related to Chesapeake. We've covered McClendon's clashes with shareholders over the past two years and broke the story last November about McClendon repaying the company $12.1 million for his map collection as part of a legal settlement. You all should subscribe.
It should also be noted that the Oklahoman is also doing a much better job of covering these issues these days than they have in the past.

[Pete]

Does that 4k for CHK include contractors?

The number was 4,950 as of 1/31/12 (as reported by CHK to the City for an incentive grant) and they are hiring about 1,000 workers a year.

These numbers represent employees, not contractors. I'm sure they pay a ton of those as well.

[proud2Bsooner]

Of course we all must hope for the best in regards to NG prices. But from what I hear, this summer will be the bottom. Analysts say that this latest story is immaterial to the actual state of the company. It's the thought that things may be worse than we really know that has everyone scared. Although McLendon is not well-loved by many, I suspect he pretty much knows what he is doing. To expect that this is an Enron situation is stupid given his (and CHK's) history. Even the nayest of naysayers here has to admit that this is more of a question of business ethics and respect for your shareholders than anything else. I do think it's a shame how disliked he is given all that he has personally done for this city. As bad as he is, it's countered with a lot of good.

[PhiAlpha]

What is there that OKC hasn't "learned"? Energy company's come here because they started here, to be around other companies, or to be close to or in centralized around their assets. Energy companies want to come here so they come, what does that have to do with the city? Should the city not recruit oil companies that will most likely relocate here just because it wants to be diversified? They got 1,000 + Boeing jobs so city leadership is obviously working on diversification. How is it the city's fault if companies from other industries just haven't wanted to relocate here yet? The city is built around one primary industry because it has been for a century, it will take time to change that and it appears that city leaders are working on pushing it that direction.

[PhiAlpha]

Can you give us examples of how OKC is so diversified? I have to disagree with this statement. Besides CHK, Devon, SR and CR, which are all oil and gas companies and "some " of the top employers in OKC it appears that the city still has the appearance of relying on one industry. I believe that if CHK did fail, it would have much more ramifications on the community than what you think. Diversification is the key to a economy and i feel that OKC has not learned from the oil bust of the early 80"s. Many people have a false sense of security that OKC will become the next Houston, however I feel "denial" can be a very dangerous, complacent attitude. OKC is a one trick pony town and still has the same mentality it had in the 80's. Has OKC truly evolved like a big league city?

The above is in reply to this...

[PhiAlpha]

Whatever that means. I follow this stuff. I've known that CHK's corporate governance practices would cause one crisis after another. I've been warning here when not a single other person was discussing this in the Oklahoma City media and certainly on this forum. You follow, post and run a forum about basketball. I post about how this rogue CEO is a threat to our city. I don't see what makes mine protesting too much. Nothing I've written about hasn't shown to be true - unfortunately.



So, passion about something I see right in front of my face when nobody else was willing to talk about this shows I lack "credibility?" If anything, when my warnings were falling on deaf ears, I think I have been vindicated. You can't say I wasn't warning people. What you call "bias" I see as passion and sounding a bugle cry. There's too much to lose.

Vindicated for what? nothing has happened, the news ran with a story about AM legally taking out loans to finance his personal, legal working interest investments which many people have and will continue to do. The company is in crappy shape due to the nat gas price. You still sound like an over obsessive idiot.

[Easy180]

Vindicated for what? nothing has happened, the news ran with a story about AM legally taking out loans to finance his personal, legal working interest investments which many people have and will continue to do. The company is in crappy shape due to the nat gas price. You still sound like an over obsessive idiot.

So after the millionth story written about how interesting this company is you aren't the least bit concerned?

[Spartan]

I am starting to lean more and more on the side that is predicting this will end badly. I hope I'm wrong.

This could have even worse consequences for OKC than the 80s bust.

[PhiAlpha]

I can't speak to what Enron's primary business role was, but one of my former employers routinely sold Enron properties at auction (as we did for all of the major oil & gas companies). They also bought properties at auction. So to say they had "no assets" might be misleading.

Enron oil and gas was spun off in 1997, it is now known as EOG Resources. Those were likely the properties they were refering to. EOG has done very well, Enron wen bankrupt in 2001

[Drake]

Vindicated for what? nothing has happened, the news ran with a story about AM legally taking out loans to finance his personal, legal working interest investments which many people have and will continue to do. The company is in crappy shape due to the nat gas price. You still sound like an over obsessive idiot.

I wouldn't say an idiot. A tad over obsessive. It is funny how the Journal Record guy points that they have been covering this all along. I also don't think that most of this breaking news about AM, but Mike sees himself as some sort of savior for the masses. Saving from what exactly I am not sure. Until the board decides something needs to be done, you can post all the tidbits you want but in the end it doesn't mean much.

AM is a reckless CEO. Natural gas prices have tanked. That combo could spell trouble for CHK as we know it. Pretty much it and not much most of us can do about it.

[Pete]

The bad publicity is going to encourage shareholders to rise up and I bet we see a board shake-up soon; like within a year.

Then, things will get interesting.

[Drake]

The bad publicity is going to encourage shareholders to rise up and I bet we see a board shake-up soon; like within a year.

Then, things will get interesting.

Your gut feeling? Good or bad?

[Pete]

I don't think anything dramatic will happen any time soon... Just growing dissatisfaction and concern among stockholders that will drive some board changes.

But Chesapeake needs McClendon. Can anyone even name another executive there? He's the face and mind behind it all and is a great deal-maker. Not sure if he could continue to work his magic on a tight leash, though.

[MikeOKC]

delete - posts got messed up. Sorry. See below

[MikeOKC]

I don't think anything dramatic will happen any time soon... Just growing dissatisfaction and concern among stockholders that will drive some board changes.

But Chesapeake needs McClendon. Can anyone even name another executive there? He's the face and mind behind it all and is a great deal-maker. Not sure if he could continue to work his magic on a tight leash, though.

Chesapeake needs McClendon? The last thing CHK needs going forward is a rogue CEO. McClendon has to go. The top management has to go. The board needs to go. This company is corrupt - to the core. All this news dribbles out a little at a time because they're a cult-like corporate entity that runs a secretive operation. His Kerr bloodline can't save him anymore. He has proven nobody can trust him. Even his buddy Jim Cramer feels betrayed. Same song second (third? Fourth?) verse.

I wouldn't say an idiot. A tad over obsessive. It is funny how the Journal Record guy points that they have been covering this all along. I also don't think that most of this breaking news about AM, but Mike sees himself as some sort of savior for the masses. Saving from what exactly I am not sure. Until the board decides something needs to be done, you can post all the tidbits you want but in the end it doesn't mean much.

AM is a reckless CEO. Natural gas prices have tanked. That combo could spell trouble for CHK as we know it. Pretty much it and not much most of us can do about it.

Vindicated for what? nothing has happened, the news ran with a story about AM legally taking out loans to finance his personal, legal working interest investments which many people have and will continue to do. The company is in crappy shape due to the nat gas price. You still sound like an over obsessive idiot.

There's a lot we can do. Raise your voice. Be heard. It's a public company running with a charter issued by the people of the state of Oklahoma - that's all of us. If we can't point out a rogue CEO and his shenanigans that put the company at risk, and therefore our city, - something is wrong. I'm not obsessive and I'm not trying to be a "savior for the masses." I post information about CHK and Aubrey Kerr McClendon and look what happens! Kill the messenger. I can only guess you work for CHK, PhiAlpha?

You still sound like an over obsessive idiot.

That's an over-the-top personal attack. I'm neither obsessive about this nor an idiot. I'm surprised that remark is still on the board considering Pete has been posting here.

People can post all kinds of topics and go over things endlessly about things, but my "watchdog" posts re Chesapeake seem to really get to you.