Chesapeake Energy Corp. reported a succession plan for outgoing Chief Executive Officer and Pres. Aubrey McClendon, who will leave the Oklahoma City independent effective Apr. 1.
McClendon has been CEO since the company's inception in 1989 and drove Chesapeake to become one of the largest E&P firms in North America. His career has been tarnished though with allegations of inappropriate behavior including running an energy-focused hedge fund from Chesapeake's offices and personally borrowing $1.3 billion from the company's business partners.
“Over the past 24 years, [McClendon] has created one of the most valuable and innovative companies in the energy industry,” said Chesapeake Chairman Archie W. Dunham. “Under Aubrey’s strong leadership,” Dunham said, “Chesapeake has built an unmatched portfolio of natural gas and oil assets in creating one of the world’s leading energy companies.”
Dunham continued, “However, as the company moves towards more fully developing the value of its outstanding assets, Chesapeake is at an important transition in its history and Aubrey and the board of directors have agreed that the time has come for the company to select a new leader. The board will be working collaboratively with Aubrey to make a smooth transition to Chesapeake’s next chief executive officer.”
During this interim period, McClendon will work closely with Steven C. Dixon, chief operating officer, and Domenic J. Dell’Osso, Jr., chief financial officer, to transition certain day-to-day management responsibilities in advance of the completion of the search process for the new chief executive officer. The company and the board are committed to its current drilling program with respect to its existing $6 billion drilling and completion budget for 2013, its ongoing asset sales program and intention to reduce the company’s long-term debt.
Last year, Chesapeake announced multiple agreements to sell most of its Permian properties, substantially all of its midstream assets, and certain noncore leasehold for total net proceeds of $6.9 billion (OGJ Online, Sept. 17, 2012).
McClendon will resign from the board at the time his successor is appointed and will receive his full compensation and other benefits to which he is entitled in accordance with the terms of his employment agreement. McClendon will continue to be an important partner with the company given his stock ownership as well as his interests in certain of the company’s wells in connection with the Founder Well Participation Program, which will terminate on June 30, 2014.