Chesapeake CEO to step down on April 1
WHEELING – Leading the only active driller in Ohio, Brooke or Hancock counties, Chesapeake Energy Chief Executive Officer Aubrey McClendon acquired thousands of Marcellus shale acres for years of production.
In Ohio’s Utica shale, McClendon authorized spending billions of dollars to acquire leases in counties such as Belmont, Jefferson, Harrison, Carroll and Tuscarawas, all in hopes that his company could produce natural gas, oil and natural gas liquids from the region.
However, when he took a 2.5 percent personal stake in these drilling operations – via his private firms such as Jamestown Resources and Larchmont Resources – some investors questioned whether McClendon should continue heading the Oklahoma City-based company that is publicly traded on the New York Stock Exchange.
Some local mineral owners also questioned Chesapeake’s practice of acquiring leases that had been signed several years ago at rates of $5-$10 per acre – at a time when the going rate for new leases was as much as $5,000 per acre – and drilling wells before the $5-$10 leases could expire.
McClendon announced Tuesday he will retire as Chesapeake’s chief executive officer and president on April 1, although he will remain as CEO until the company’s board of directors appoints his replacement. McClendon has led the company since founding it in 1989.
“I am extremely proud of what we have built over the last quarter of a century, and I am confident that Chesapeake is in a great position to continue to grow and achieve great success in the future as it realizes the full value of its outstanding assets,” McClendon said.
“Over the past 24 years, I have had the privilege of developing Chesapeake into one of the world’s premier energy companies,” he continued. “While I have certain philosophical differences with the new board, I look forward to working collaboratively with the company and the board to provide a smooth transition to new leadership for the company.”
Chesapeake’s board of directors continues reviewing McClendon’s practice of taking the 2.5 percent stake in local drilling operations, formally known as the Founder Well Participation Program. McClendon has since agreed to end this practice by June 30, 2014. Noting the board has conducted an “extensive review” of the program, the company said McClendon has not engaged in any improper conduct.
McClendon also will resign his seat on the board once his CEO successor is appointed, but he will receive his full compensation and other benefits to which he is entitled in accordance with the terms of his employment agreement.