Long-time president and COO resigns from Chesapeake Energy
Mikaila Adams, Associate Editor, OGFJ
Tom L. Ward, Chesapeake Energy Corp.’s long-time president and COO, resigned as a director, officer, and employee of the company, according to a Feb. 13 press release. He will serve as a consultant to Chesapeake for the next six months.
“Chesapeake has been my passion for more than 20 years,” said Ward. “The company has achieved great success and is now the second largest independent producer of US 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.”
Aubrey K. McClendon, chairman and CEO, noted, “Tom has been my good friend and partner for 23 years. 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. Tom 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.”
Steven C. Dixon has been promoted to the position of executive vice president of operations and COO of Chesapeake. Dixon, 47, had been senior vice president of production since 1995 and served as vice president of exploration from 1991 to 1995.
“During the past 15 years, Steve 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,” added McClendon. “His appointment as COO is well deserved and he will be a successful and capable leader as Chesapeake continues to grow in the years ahead.”
Also on Feb. 13, Chesapeake provided an update on its oil and natural gas hedging positions. During the past month, the company has increased its hedging positions and has now hedged 71%, 36%, and 22% 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.
In addition, Chesapeake has hedged 63%, 22%, and 14% 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.
McClendon commented, “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. 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 has 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 Feb. 23, 2006.”
Chesapeake Energy is the second-largest independent producer of natural gas in the US. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and property acquisitions in the Mid-Continent, Permian basin, South Texas, Texas Gulf Coast, Barnett shale, Ark-La-Tex, and Appalachian basin regions of the United States.OGFJ