Chesapeake Business Practices

[Pete]

At the very least, investors will be on him like a hawk.

That means no more ridiculous real estate deals (wonder how this will effect the so called "mystery tower"), 1,000+ hirings a year, and maybe a significant cutback of corporate sponsorships.

I'll be a glass half full person and say it is probably good for CHK that this is all coming out now, rather than this time next year when they have no money and are teetering on bankruptcy. From this point on shareholders will be much more hands on then they have been in the past, which will probably keep the company from plunging into the abyss (although OKC may not fully escape any negative repercussions).

I agree with all of this and believe Aubrey will hang tough and continue to shift the company towards oil and away from natural gas.

They still own tons of mineral rights so they can easily sell some off to raise capital then focus on drilling for liquids.

I suspect they'll be fine in the longer term and agree it's probably a good thing all this came out sooner rather than later. AKM needs oversight and it sounds like he is going to get much more than at any time since CHK was founded.

But the sharks are circling and I bet there will be a few more revelations that put McClendon and CHK in a bad light before this gets significantly better. But I do believe it will.

[Maynard]

Sen Nelson seeks US probe into Chesapeake Energy

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WASHINGTON, May 2 (Reuters) - U.S. Senator Bill Nelson plans to ask the Justice Department to investigate Chesapeake Energy Corp (CHK:$16.74,00$-2.86,00-14.59%) for potential fraud and price manipulation, an aide to the lawmaker said.

Nelson's request comes after Reuters reported on Wednesday that Chesapeake CEO Aubrey McClendon ran a $200 million hedge fund that traded in the same commodities Chesapeake produces. A search of Chesapeake's filings turned up no disclosure of his activities.

"In response to the reporting by Reuters, Senator Bill Nelson has asked his staff to formally request that the Justice Department'sFinancial Fraud Enforcement Task Force investigate the Chesapeake Energy Corp. (CHK:$16.74,00$-2.86,00-14.59%) matter to determine whether there is evidence of fraud, price manipulation, conflicts-of-interest, or other illegal activities," said Ryan McCormick, a staff director for the Senate Finance subcommittee on fiscal responsibility.

[mugofbeer]

I have a feeling that if CHK survives this little episode intact, you may see some serious reigning in of a lot of the extracurricular activities they were involved in. McClendon got some serious 'splainin to do. Did you note their largest shareowner has filed to change from a passive to an active shareowner? THis means they may push for a takeover. Hold on for the ride!

[Questor]

I have a feeling that if CHK survives this little episode intact, you may see some serious reigning in of a lot of the extracurricular activities they were involved in. McClendon got some serious 'splainin to do. Did you note their largest shareowner has filed to change from a passive to an active shareowner? THis means they may push for a takeover. Hold on for the ride!

I noticed that and wondered if that might be where this is headed. You know I got a real kick out of The Oklahoman's take on a possible takeover a few articles back... they talked about loyal investors and then how Oklahoma law requires that only portions of the board can be elected at any one time to guard against it and so the possibility was very low... I actually LOL'd reading it. They need to stop the sugar-coating and just report.

[ljbab728]

Chesapeake is at least trying to sound like it's going to do the right thing.

http://newsok.com/chesapeake-to-move...rticle/3671815

[Spartan]

And their stock price continues to plummet, erasing $1.8 billion.

[BoulderSooner]

And their stock price continues to plummet, erasing $1.8 billion.

except that it is up 2.2% today

[Midtowner]

except that it is up 2.2% today

You buying?

[BoulderSooner]

You buying?

no .. not for a little while any way ... just disputing the "continues to plummet"

[OKCTalker]

except that it is up 2.2% today

Closed down 2.7% for the day at $17.19, down 23% for the year.

[RedDollar]

Closed down 2.7% for the day at $17.19, down 23% for the year.

Uhhhhhh ... not quite , there seems to be real support at 17. No matter the news, they havin trouble driving this lower than 17.

http://finance.yahoo.com/q?s=chk&ql=1

[Maynard]

Uhhhhhh ... not quite , there seems to be real support at 17. No matter the news, they havin trouble driving this lower than 17.

http://finance.yahoo.com/q?s=chk&ql=1

Support was $16.78, which was breached yesterday ($16.74 close). A new 52-week low was put in at 9:30 this morning @ 16.70. Some think yesterday was capitulation. Some don't.

[Maynard]

except that it is up 2.2% today

[OKCTalker]

Dead cat bounce.

[Stinger]

Say he loses the CEO title next....what kind of power does he retain as majority shareholder?

[BoulderSooner]

Say he loses the CEO title next....what kind of power does he retain as majority shareholder?

any idea what % he actually owns??

[Maynard]

any idea what % he actually owns??

3,257,614 shares (a small percentage -- CHK has 662.50 million outstanding shares) as of March 30, 2012 filing.

[Pete]

any idea what % he actually owns??

A very small percentage, particularly after he lost almost all his shares in the now famous margin call.

He is nowhere near a majority shareholder.

[Lafferty Daniel]

I'm not really sure why people think they're going to go under. Worst situation is they hire a new CEO and I'll bet you everything rebounds after that.

[Maynard]

I'm not really sure why people think they're going to go under. Worst situation is they hire a new CEO and I'll bet you everything rebounds after that.

[Spartan]

I'm not really sure why people think they're going to go under. Worst situation is they hire a new CEO and I'll bet you everything rebounds after that.

Yeah, nothing going on here, nothing to see...Aubrey's not like a big deal locally or anything like that.

And that's good if today they're seeing an awkward rebound in the stock.

[Lafferty Daniel]

Yeah, nothing going on here, nothing to see...Aubrey's not like a big deal locally or anything like that.

And that's good if today they're seeing an awkward rebound in the stock.

How does this have anything to do with them going under? So, since Aubrey is a big deal in OKC, the entire company that has shareholders all over the world will go under?

[jn1780]

Its interesting because you have people saying that there is NO chance of Cheaspeake being taken over because of all their debt, but you also have people saying their A-OK because they have tons of assets and can service their debt.

If the latter is true than someone would be very interested in buying Cheaspeake, take the good assets, clean house, and close "McClendon World".

[Spartan]

Hold on, you're getting fast and loose with recollection. My suggestion (idk think it was in this thread, but in case it was and in case you read it and are about to quote it, allow me to address it) that I hope this isn't the beginning of the end was based on combining all of this last month's Aubrey scandals into one factor that is equally weighted with the sagging price of natural gas, CHK's debt, and other major issues. Several people have had this nagging suspicion that CHK is a house of cards for a long time. Consider the Lost Ogle's version (written by an insider who works there) or the Rolling Stone, or the other FEW critical looks that have been taken at CHK. Again, I hope I'm wrong on all of those things not looking good for CHK because we really need them to stay afloat (understatement of the year).

Now, to address my concerns about Aubrey stepping down as it relates to this thread. I was talking about the ambitious campus master plan, with more corporate expansion on the east, and initiating some even more impressive mixed-use expansion to the west. This plan is the brain child of Aubrey, arguably, and nobody else. Aubrey steps down, I wonder what happens to that campus master plan. Furthermore, taking a bigger look at that phenomenon, what does that say for CHK's longevity in OKC, not just CHK's longevity as a company? I don't care about CHK's longevity in other cities.

Suffice it to say, while CHK has no plans to move out of OKC obviously and is doing a good job at entrenching themselves in OKC, I don't like the sound of a takeover effort that may be underway. That is not a process that has ever gone well for us. Usually it's a process that goes well for Houston, and to combine these talks of CHK takeover with assertions from CHK that they're looking more at oil at the moment. That doesn't mean that they're moving to Houston, but it does mean that Houston wouldn't be an illogical move as it would be if CHK was truly looking to remain undiversified, focusing on nat gas.

So that's my total opinion on the recent events. I think that there are some major issues, and I wish we could see some critical reporting from the Oklahoman. It's gotten slightly better at addressing the issues (but in a way to deny their possibility), but still smacks of cronyism in the coverage. I hope I'm wrong about all of these concerns, and if you can alleviate those concerns, be my guest.

[BoulderSooner]

there is no evidence that CHK is built on a house of cards