View Full Version : Chesapeake co-founder stepping out

02-14-2006, 07:47 AM
I wonder what Tom's next project will be, and if he'll start another OKC based company.

Chesapeake President and Chief Operating Officer resigns
Posted: Monday, February 13, 2006

Chesapeake Energy Corporation announced Feb. 13 that its president and chief operating officer, Tom L. Ward, has resigned as a director, officer and employee of the company effective Feb. 10. The Oklahoma City-based company simultaneously announced that Steven C. Dixon has been promoted to executive vice president of operations and chief operating officer.

“You can't replace a co-founder,” company spokesman Thomas Price said of Ward. “Steve will be taking over the mantel as chief operating officer.”

Ward, who has been one of many Chesapeake advocates of community involvement and philanthropy, will devote more time and efforts to his church and Whitefield, a school and living environment in north Oklahoma City, Price said. Additionally, Ward will serve as a consultant to Chesapeake for the next six months.

"Chesapeake has been my passion for more than 20 years," Ward said. "The company has achieved great success and is now the second largest independent producer of U.S. natural gas. I am happy that our investors have shared in our accomplishments, and as a co-founder of the company, I am proud of my leadership role at Chesapeake and know that I am leaving the company in good hands and in a very favorable competitive position. I now look forward to devoting more time and energy to my other interests, including advocacy for neglected children, and various business ventures."

Chesapeake Energy Corporation is the second-largest independent producer of natural gas in the United States.

"[Ward] has been my good friend and partner for 23 years,” said Aubrey K. McClendon, chairman and chief executive. “Through the various ups and downs associated with starting from a $50,000 investment and building it into a $20 billion company, we grew up together and remained partners through thick and thin. [Ward] is an exceptionally talented entrepreneur and that has enabled him to build very talented exploration, development and operations teams at Chesapeake. He will continue to be a great friend and we will miss him. We wish him well in his future endeavors."

Dixon, 47, has been senior vice president of production since 1995 and served as vice president of exploration from 1991 to 1995.

"During the past 15 years, [Dixon] has been an integral part of our operations team and has worked closely with all members of senior management. He has a thorough knowledge of Chesapeake and our industry," McClendon said. "His appointment as chief operating officer is well deserved and he will be a successful and capable leader as Chesapeake continues to grow in the years ahead.”

Chesapeake also provided an update Feb. 13 on its oil and natural gas hedging positions. During the past month, the company has increased its hedging positions and has now hedged 71 percent, 36 percent and 22 percent of its anticipated 2006, 2007 and 2008 natural gas production through swaps at NYMEX prices of $9.43 per mmbtu, $9.85 per mmbtu and $9.10 per mmbtu, respectively. In total, the company has hedged approximately 721 bcf of natural gas during the next three years through swaps at an average NYMEX price of $9.49 per mmbtu.

“Today's gas price is $7.45 so the hedged rates are above today's market,” Price said.

In addition, Chesapeake has hedged 63 percent, 22 percent and 14 percent of its anticipated 2006, 2007 and 2008 oil production through swaps at NYMEX prices of $61.02 per bbl, $62.42 per bbl and $65.48 per bbl, respectively. In total, the company has hedged approximately 7.665 million bbls of oil during the next three years through swaps at an average NYMEX price of $61.97 per bbl.

Depending on changes in oil and natural gas futures markets and management's view of underlying oil and natural gas supply and demand trends, Chesapeake may either increase or decrease its hedging positions at any time in the future without notice.

"Today's update of Chesapeake's attractive hedging positions is further evidence that the company continues to take advantage of oil and natural gas price volatility to lock in very attractive returns on the capital it invests in both acquisitions and drilling,” McClendon said. “The hedging positions that Chesapeake has entered into for 2006, 2007 and 2008 have a current positive mark-to-market value of approximately $725 million. In addition, the mark-to-market liability of the hedges assumed in the CNR acquisition have declined by almost $100 million since the date of acquisition on Nov. 14, 2005. We look forward to reporting our fourth quarter and full-year 2005 results on February 23, 2006."