Energy Companies

Aubrey McClendon, CEO of Chesapeake Energy, had a tough day last Friday at the annual shareholder’s meeting at Chesapeake’s headquarters in Oklahoma City . Shareholders passed a number of votes against the sitting board and against McClendon. McClendon had previously announced that Chesapeake’s two largest shareholders, Southeastern Asset Management and Carl Ichan will be allowed to nominate four new board members and a new chairperson, replacing more than half of the board. The new members are slated to begin later this month. Still, shareholders withheld approval of two sitting board members up for re-election. They both promptly offered their resignations.

A number of large shareholders addressed McClendon and the current board. Some were rather blunt about McClendon’s doubtful future with the company he founded in 1989:

Read More “The Day Chesapeake CEO McClendon Would Rather Forget”

Chesapeake Energy announced today that they have sold their midstream assets, including their Chesapeake Midstream subsidiary, to Global Infrastructure Partners for a total deal worth $4 billion. Chesapeake’s midstream assets include pipelines and processing plants. The announcement comes just prior to their annual meeting being held today in Oklahoma City and no doubt is an effort by Aubrey McClendon to tamp down criticism of the mountain of debt the company has piled up under his watch.

The company has also put other assets, including 337,000 acres of Utica Shale acreage, on the auction block in a bid to reduce the debt load.

Read More “Fire Sale Begins: Chesapeake Sells Midstream Assets for $4B”

Chesapeake Energy, in a bid to keep the company from being sold, has caved to demands from its two largest shareholders to replace half of its board of directors. Investment firm Southeastern Asset Management, which holds 13.6% of Chesapeake stock, and corporate raider Carl Ichan, who didn’t own any Chesapeake stock a month ago but now owns 7.6%, have been very vocally challenging the company and calling for changes at the board level. Raider Carl will be one of those new board members—either him or someone he designates. The other three new board members will be appointed by Southeastern.

Read More “Chesapeake Caves to Pressure, Will Replace Half its Board”

The venerable U.S. credit rating service Moody’s Investor Service said yesterday that Chesapeake will need to sell a minimum of $7 billion in assets this year in order to avoid a credit rating downgrade by their service—and even $7 billion may not be enough.

Moody’s current credit rating for Chesapeake is Ba2, which is considered “speculative grade” (not investment grade) and “judged to have speculative elements and a significant credit risk.” The lower a company’s credit rating goes, the harder (and more expensive) it is to borrow money.

Read More “Moody’s Warns Chesapeake Must Sell $7B in Assets This Year”