These are the MidFirst holdings.

Everything but the white building at the far east end (HQ) was acquired from Chesapeake.

Ironically, Aubrey McClendon tried for years to buy their headquarters property but after he left CHK, Jeff Records and Co. bought all this from them at pennies on the dollar.

For example, Aubrey and CHK paid $4.5 million for the Deep Fork Property in 2008 and MidFirst bought for only $855,000.

http://www.okctalk.com/images/pete/midfirst070517a.jpg


http://www.okctalk.com/images/pete/midfirst070517b.jpg

Is it possible the McClendon estate is purposely selling stuff off at a big loss so that they don't show a "profit" that would encourage litigation from former partners to recover perceived funds owed?

Is it possible the McClendon estate is purposely selling stuff off at a big loss so that they don't show a "profit" that would encourage litigation from former partners to recover perceived funds owed?

This property was sold by Chesapeake, not McClendon.

Apart from the property at Wilshire and Broadway and near Lake Arcadia, almost all the acquisitions driven by McClendon were paid for by CHK, and thus they retained ownership after he left the company.

BTW, the Western / Grand triangle properties are likely owned directly by Jeff Records rather than the MidFirst corporation.

My understanding is there are long-term plans to develop those properties but they will continue to lease and look for new tenants in the near term.

BTW, like seemingly all Chesapeake properties, the triangle parcels were never put on the open market.

In the end, MidFirst ended up paying a total of $4.745 million when Chesapeake had paid over $21 million between 2006 and 2012.

And to reiterate, CHK had paid for Deep Fork and its 2.3 acres alone pretty much the same amount MidFirst ended up giving for the entire area which consists of more than 10 acres.

BTW, like seemingly all Chesapeake properties, the triangle parcels were never put on the open market.

In the end, MidFirst ended up paying a total of $4.745 million when Chesapeake had paid over $21 million between 2006 and 2012.

And to reiterate, CHK had paid for Deep Fork and its 2.3 acres alone pretty much the same amount MidFirst ended up giving for the entire area which consists of more than 10 acres.

I wonder how CHK shareholders feel about that? You'd at least think it would be in CHK's best interests to put these deals on the open market.

The Chesapeake thing is just all so strange.

And I know, I know, this is just peanuts to them but why not try to get as much as possible? Good grief, millions pay for lots of salaries.

The way this has been handled (including calls of inquiry about properties going unanswered) makes no sense and seems completely inconsistent with their new leadership mantra of being fiscally responsible.

I'd bet that they want it in corporate hands. MidFirst is growing and they can contribute to a very particular vision for what the area can be which will is important for the culture of the company.

And even on the open market, how much more were they going to get for those properties than MidFirst paid for them? It's not that they sold them for pennies, it's that they were bought for fortunes. If MidFirst paid $4.745M for all of that, the property wouldn't be worth much more than $5M-6M. Save $1M or "buy" your neighbors?

Obviously this is one example of a few, and the dollars could potentially add up in the long run to be several million dollars, but I think the control is still useful for a company like CHK.

I'd bet that they want it in corporate hands. MidFirst is growing and they can contribute to a very particular vision for what the area can be which will is important for the culture of the company.

And even on the open market, how much more were they going to get for those properties than MidFirst paid for them? It's not that they sold them for pennies, it's that they were bought for fortunes. If MidFirst paid $4.745M for all of that, the property wouldn't be worth much more than $5M-6M. Save $1M or "buy" your neighbors?

Obviously this is one example of a few, and the dollars could potentially add up in the long run to be several million dollars, but I think the control is still useful for a company like CHK.
This passes the smell test and might be right. It's all pennies and immaterial to CHK, but what does matter is WHO buys it.

^

Except they've done the same thing for all types of properties nowhere near their campus.

It may be that they just want to be rid of things that remind them of Aubrey. All his little land deals may be a sore spot with them. Put it on the market and you risk media attention for how much you paid for it a few years ago. Better to get rid of it quietly and just be done with it.

It may be that they just want to be rid of things that remind them of Aubrey. All his little land deals may be a sore spot with them. Put it on the market and you risk media attention for how much you paid for it a few years ago. Better to get rid of it quietly and just be done with it.

Definitely don't believe this is their motive

I think it's pretty straightforward; CHK sans-AHK knows it has no interest in leading the development efforts in that part of town nor does it have a "grand vision" for the area. They have re-made themselves as a leaner company, and they shuck any assets that aren't relevant to their core mission. So they are selling them off at whatever they can get for them, converting assets to cash at fair market value. If they paid too much originally as part of some long play, oh well. That vision doesn't exist anymore. Time to just take your lumps and move on.

It is how and to who they are disposing assets that is curious, not the fact they are doing so.

It is how and to who they are disposing assets that is curious, not the fact they are doing so.

Exactly right.

Something is very strange about all this... My Spidey sense is tingling.

A magician performs illusion by creating a focal point of interest away from where the activity they don't want you to see is occurring. Just because they are operating in a more traditional and conservative manner is a great focal point.

I think it needs to be said that CHK has a long history of WAY overpaying for properties on all fronts. So even they took a massive hit on the price they bought vs sold, maybe the prices they sold for were the real market value, and it just shows how irresponsible they were to begin with.

I think it needs to be said that CHK has a long history of WAY overpaying for properties on all fronts. So even they took a massive hit on the price they bought vs sold, maybe the prices they sold for were the real market value, and it just shows how irresponsible they were to begin with.

That is part of the story but they are now selling properties exclusively to cronies of the company at far under market value. And not responding to interested parties when they inquire about their holdings.

$855,000 for that Deep Fork Parcel with a big, very nice building on it? Not even close to fair market value or what others would have paid if given the opportunity.

They never really tried to market the properties they had. They carefully avoided other interested parties using delaying tactics with a lawyer and real estate consultant as gatekeepers.

Exactly right.

Something is very strange about all this... My Spidey sense is tingling. Careful, I'm fairly sure this is a Lackmeyer phrase. :)