http://www.okctalk.com/images/pete/chk020718.jpg

I can't help but look at that and wonder to myself why a corporate campus needs a soccer field and track. A corporate gym, sure, but a full track and field environment?

Feels like a metaphor for this entire development.

^

There is a parking garage underneath that field/track so pretty expensive piece of development right there.

I can't help but look at that and wonder to myself why a corporate campus needs a soccer field and track. A corporate gym, sure, but a full track and field environment?

I can see it for a big enough campus. I like to run, but I absolutely hate the treadmill. I run in my neighborhood, but it could really be nice to run somewhere without having to worry about traffic and being able to just listen to my headphones. Being able to run before or after work and taking a shower at the gym there would be a very nice perks, and even with running around the neighborhood it's nice to have a measured track for doing speed work.

A soccer field is also a nice option for intramural sports, letting coworkers blow off steam, letting employees coach a kids team there, sponsoring a local team, etc.

Reminder they also own the property on the west side of Western which has an even longer track and bigger playfield.

I can't help but look at that and wonder to myself why a corporate campus needs a soccer field and track. A corporate gym, sure, but a full track and field environment?

Feels like a metaphor for this entire development.

Or why, at one time, CHK had not one but two full-time beekeepers on the payroll.

I can't help but look at that and wonder to myself why a corporate campus needs a soccer field and track. A corporate gym, sure, but a full track and field environment?

Feels like a metaphor for this entire development.

Shoot, I used to do business with a company in Columbus that had their own golf course plus gym, workout facilities, etc. They gave employees 4 hours a week of paid time there. They had VERY loyal employees. Just like Aubrey believed you provided these sorts of amenities to be able to recruit and keep good employees. I would rather companies did soccer and track facilities than just focus on giving executives country club memberships.

http://www.okctalk.com/images/pete/chesapeake061220a.jpg


http://www.okctalk.com/images/pete/chesapeake061220b.jpg

Such a nice Campus. CHK should relocate whatever entity remains to downtown office space. Then market the campus with the help of the OK Chamber of Commerce as an attractive HQ relocation with incentives.

^Great idea.

Such a nice Campus. CHK should relocate whatever entity remains to downtown office space. Then market the campus with the help of the OK Chamber of Commerce as an attractive HQ relocation with incentives.

Doubt the debtors in control would allow them to pay rent somewhere while they own vacant space.

People need to realize, this is no longer a local company and there will be no looking out for OKC by them. This is strictly business...their business, and local interests have no bearing.

Doubt the debtors in control would allow them to pay rent somewhere while they own vacant space.

People need to realize, this is no longer a local company and there will be no looking out for OKC by them. This is strictly business...their business, and local interests have no bearing.

+1. They have no control over anything right now. Bondholders and the bankruptcy court has complete operational control until they emerge.

"let's move offices" is priority #9,457,393.

I don't think it was a short term suggestion.

Doubt the debtors in control would allow them to pay rent somewhere while they own vacant space.

People need to realize, this is no longer a local company and there will be no looking out for OKC by them. This is strictly business...their business, and local interests have no bearing.

Rent for 400 people may be cheaper than property taxes on that big ol' thang.

Such a nice Campus. CHK should relocate whatever entity remains to downtown office space. Then market the campus with the help of the OK Chamber of Commerce as an attractive HQ relocation with incentives.
As AP said, this is a really great idea.

They have been trying to rent out Building 13 for over a year and to no avail.

And that building has it's own parking garage and is along 63rd, not in the middle of the campus. So, easy for a company to have its own signage and identity.

There does not seem to be demand for office space in this area and really for most of OKC. And I predict that is going to get worse before it gets better.

Rent for 400 people may be cheaper than property taxes on that big ol' thang.

Are they down to 400 on campus? I thought it was still around 1,250.

"adding that the company is committed to keeping its 1,900 employees, including 1,300 in Oklahoma, informed" (Only the kingfisher and Weatherford field offices remain.)

https://oklahoman.com/article/5665605/lawler-to-employees-chesapeakes-bankruptcy-best-path-forward

They're still a $10 billion company, assets sales were NOT part of the Chap 11 agreement with bondholders. It's a debt for equity swap.

There is no space downtown for 1,300 employees in one building now that SD sold.

How much free space is in the BOK Tower across from Devon?

How much free space is in the BOK Tower across from Devon?

About 16 floors

How much free space is in the BOK Tower across from Devon?

Not 1300 worth. BOK has 2-3 floors, Enable has 6-8?

And keep in mind they are still a Fortune 500 company. They aren't going to be a tenant for someone else.

It's not going to happen.

They're more likely to buy other companies grow the current campus, move to Houston, or get bought than moving downtown.

I always thought this area looked more to be a college campus as opposed to being a corporate headquarters.

I always thought this area looked more to be a college campus as opposed to being a corporate headquarters.

+1


Not 1300 worth. BOK has 2-3 floors, Enable has 6-8?

And keep in mind they are still a Fortune 500 company. They aren't going to be a tenant for someone else.

It's not going to happen.

They're more likely to buy other companies grow the current campus, move to Houston, or get bought than moving downtown.

That would be our worst nightmare; worst than losing Kerr McGee in 2006.

I remember when we were putting in the windows and screens that one day this would end up being a Apartment Complex. Made a lot of money on that campus for sure.

l hope Devon or Continental might think the remaining balance sheet is attractive - or a Green?

Not 1300 worth. BOK has 2-3 floors, Enable has 6-8?

And keep in mind they are still a Fortune 500 company. They aren't going to be a tenant for someone else.

It's not going to happen.

They're more likely to buy other companies grow the current campus, move to Houston, or get bought than moving downtown.

In your opinion since you seem well informed on the industry, is ENBL a pretty solid co?

http://www.okctalk.com/images/pete/chesapeake061220a.jpg


http://www.okctalk.com/images/pete/chesapeake061220b.jpg

You know... it's funny, looking back. The billion + spent on these facilities, (was he trying to build a small city? I once heard rumors of employee housing...) and it was all fundamentally a flawed business model... or at least a business model that was no longer solvent once oil and gas prices fell. I say it's funny because I picture Aubrey out there, making hot-shot deals with the all the big bankers, flying around in jets, drinking $10,000 wine... He was sort of like the Robin Hood of OKC - but on a giant corporate financial-engineering level. He brought SO much money to OKC in the form of debt, spent like a mad man - and the lenders bought his sales pitch, time and time again. Did nobody run the numbers? You just have to be a silver-haired "visionary" and banks keep lending you money? I suppose so. At least, in that late 2000's era, when Wall St. was starved for growth, they were apparently willing to pay for growth at all costs. I'm glad OKC got some nice facilities out of it.

It will be interesting to see what happens with the campus, long term. CHK will never need all that space again, and I've heard from friends that work there that they don't particularly love the campus model. They don't HATE it, it is pretty, but a bit impractical - especially if you're on the east side of Classen. They've said walking in the dead heat of summer, or during rain, snow, in dress clothes isn't a particularly pleasant endeavor right before an hour+ meeting in another building. Especially if you get caught in a surprise downpour and must attend meeting with wet clothes and socks.

Parking for the main campus will be a challenge. Sure, there's the giant garage under the athletic field, but there aren't enough spots if every building is full. The main campus will require that the garages east of Classen are used, which can create complications trying to break it up to multiple tenants I imagine.

In your opinion since you seem well informed on the industry, is ENBL a pretty solid co?

They’re probably fine because of the OG&E backdrop but longer term the MLP model isn’t sustainable. OneOk or Williams are better midstream operators.

Looks like a great college campus, would OU, OSU or OCU want/need it?

In the long-term, this would be a great place for start-up companies, thinking something like a smaller scale version of the Denver Tech Center.

Aubrey was a swindler from the beginning and had everyone convinced of his lies. I've said this for years so im not just jumping on some wagon here. He was crooked and it finally caught up with him.

Any responsible company doesn't do the crap he did. The campus was stupid ridiculous and now they're going to have to deal with the consequences of it because no one is going to want to rent it out. Had they built a regular structure, the would have been able to do something with it (as in keep adding on more connected sections that you could then seal off from one another later). But no, it's all purpose built and no one wants it. And in a post-covid office world, they're going to have to cut the rent by half to get anyone to even think about it.

My bet is that CHK gets liquidated to pay the debt. No one wants to buy it because it's not worth it. They'll continue to shrink until there's nothing left and the place shudders the doors. It may not happen right now, but my bet is that in 5 years, CHK will be a thing of the past. Yet another death from $25 a barrel oil.

That would be our worst nightmare; worst than losing Kerr McGee in 2006.Much worse. I worked for K-M until 2001. I left because they were becoming a smaller and smaller company then. What finally sold in 2006 was a pretty small company.

Aubrey was a swindler from the beginning and had everyone convinced of his lies. I've said this for years so im not just jumping on some wagon here. He was crooked and it finally caught up with him.

Any responsible company doesn't do the crap he did. The campus was stupid ridiculous and now they're going to have to deal with the consequences of it because no one is going to want to rent it out. Had they built a regular structure, the would have been able to do something with it (as in keep adding on more connected sections that you could then seal off from one another later). But no, it's all purpose built and no one wants it. And in a post-covid office world, they're going to have to cut the rent by half to get anyone to even think about it.

My bet is that CHK gets liquidated to pay the debt. No one wants to buy it because it's not worth it. They'll continue to shrink until there's nothing left and the place shudders the doors. It may not happen right now, but my bet is that in 5 years, CHK will be a thing of the past. Yet another death from $25 a barrel oil.

Right . . .

Aubrey was a swindler from the beginning and had everyone convinced of his lies. I've said this for years so im not just jumping on some wagon here. He was crooked and it finally caught up with him.

Any responsible company doesn't do the crap he did. The campus was stupid ridiculous and now they're going to have to deal with the consequences of it because no one is going to want to rent it out. Had they built a regular structure, the would have been able to do something with it (as in keep adding on more connected sections that you could then seal off from one another later). But no, it's all purpose built and no one wants it. And in a post-covid office world, they're going to have to cut the rent by half to get anyone to even think about it.

My bet is that CHK gets liquidated to pay the debt. No one wants to buy it because it's not worth it. They'll continue to shrink until there's nothing left and the place shudders the doors. It may not happen right now, but my bet is that in 5 years, CHK will be a thing of the past. Yet another death from $25 a barrel oil.

Nope. Chesapeake will still be around for a long time. Why so negative?

SandRidge is still around too but is essentially only a very small shadow of its former self.

CHK has already shed nearly 4,000 (!) jobs just in OKC. The question isn't if they'll be around, it's how many people they can continue to employ.

They’re probably fine because of the OG&E backdrop but longer term the MLP model isn’t sustainable. OneOk or Williams are better midstream operators.

And Centerpoint

SandRidge is still around too but is essentially on a very small shadow of its former self.

CHK has already shed nearly 4,000 (!) jobs just in OKC. The question isn't if they'll be around, it's how many people they can continue to employ.

To that point, if CHK is still around in 5 years with < 200 employees, does that even count any more? The losers here are the employees. I'm not wishing for this to happen, im just being (at least what i think is) realistic. Aubrey did such bad crap for so long, and everyone there is paying the price for it with their jobs and their livelihood. Thousands of people are having to deal with this now. Had he not made the choices he had, CHK may have been able to weather the downturn in a more manageable way.

Sandridge was dealt a bad hand from day 1. I'm surprised it lasted as long as it did (knowing things from the inside). But again, they didn't make wise choices and overspent on lavish bull and when the market turned, they had no reserves and no where to go but down. Count the number of CEOs in a 5 year period there...its nuts. Carl Icahn didn't help either....he does nothing but causes problems wherever he goes, but that's another conversation.

A lot of this mess looks a lot like the autoworkers contracts. Get a bunch of money and benefits now, but it's going to cause you to lose your job later. Oh and your retirement is going to go bust for the same reason so when you're 85 and your benefits tank, you're stuck with nowhere to go. Great choices there. The point being, spend more conservatively folks. The lavish spend rarely turns out well in the long-term. I have no loveless for Paycom, but right now they are adding amenities as well, but they're not going nuts. No wine cellars and grocery stores. No buying up swaths of prime real estate for dumb crap.

The title of this thread makes me think of the dreams of Winston Churchill. The British Empire Marches On.

To that point, if CHK is still around in 5 years with < 200 employees, does that even count any more? The losers here are the employees. I'm not wishing for this to happen, im just being (at least what i think is) realistic. Aubrey did such bad crap for so long, and everyone there is paying the price for it with their jobs and their livelihood. Thousands of people are having to deal with this now. Had he not made the choices he had, CHK may have been able to weather the downturn in a more manageable way.

Sandridge was dealt a bad hand from day 1. I'm surprised it lasted as long as it did (knowing things from the inside). But again, they didn't make wise choices and overspent on lavish bull and when the market turned, they had no reserves and no where to go but down. Count the number of CEOs in a 5 year period there...its nuts. Carl Icahn didn't help either....he does nothing but causes problems wherever he goes, but that's another conversation.

A lot of this mess looks a lot like the autoworkers contracts. Get a bunch of money and benefits now, but it's going to cause you to lose your job later. Oh and your retirement is going to go bust for the same reason so when you're 85 and your benefits tank, you're stuck with nowhere to go. Great choices there. The point being, spend more conservatively folks. The lavish spend rarely turns out well in the long-term. I have no loveless for Paycom, but right now they are adding amenities as well, but they're not going nuts. No wine cellars and grocery stores. No buying up swaths of prime real estate for dumb crap.

With respect

You have absolutely no idea what you’re talking about.

To that point, if CHK is still around in 5 years with < 200 employees, does that even count any more? The losers here are the employees. I'm not wishing for this to happen, im just being (at least what i think is) realistic. Aubrey did such bad crap for so long, and everyone there is paying the price for it with their jobs and their livelihood. Thousands of people are having to deal with this now. Had he not made the choices he had, CHK may have been able to weather the downturn in a more manageable way.

Sandridge was dealt a bad hand from day 1. I'm surprised it lasted as long as it did (knowing things from the inside). But again, they didn't make wise choices and overspent on lavish bull and when the market turned, they had no reserves and no where to go but down. Count the number of CEOs in a 5 year period there...its nuts. Carl Icahn didn't help either....he does nothing but causes problems wherever he goes, but that's another conversation.

A lot of this mess looks a lot like the autoworkers contracts. Get a bunch of money and benefits now, but it's going to cause you to lose your job later. Oh and your retirement is going to go bust for the same reason so when you're 85 and your benefits tank, you're stuck with nowhere to go. Great choices there. The point being, spend more conservatively folks. The lavish spend rarely turns out well in the long-term. I have no loveless for Paycom, but right now they are adding amenities as well, but they're not going nuts. No wine cellars and grocery stores. No buying up swaths of prime real estate for dumb crap.

I certainly don't agree with all that Aubrey did at Chesapeake but had prices stayed up it could have been the next Exxon. Ironically, he was a victim of his company's success. The new drilling technology became so astoundingly successful, prices were capped off (along with world events) and CHK just got buried under their own debt. As far as the excesses he oversaw, it just shows he was one of the last of the old-fashioned, live-on-the-edge, deal makin' wildcatters of the 70s who also met and abrupt end to their wealth.

^

By far his biggest mistake was betting so big on natural gas and those prices have been very low for decades now.

Wasn't just a bit of bad luck, he missed so incredibly badly that he doomed the entire company long after he's was gone.

My point, but my take is he was a victim of his own success. New technology his firm pioneered was so successful it's led to excess gas and those low prices.

^

Lots of companies that did fracking did not bet so heavily on gas.

gopokes, you're welcome to your opinion. But a lot of facts back me up. Happy to debate that elsewhere with you.

I've heard from a solid source the the state Commissioners of Land Office (same group in the process of buying SandRidge Tower) is also interested in Building 13 on the Chesapeake campus.

This building and parking garage are on NW 63rd, just east of Classen and has been for lease for over a year.

CLO would be buying the property on behalf of the state, then lease back to state agencies. I suspect they are interested in more than just the one building.

CHK is down to about 1,300 OKC employees, from a high of over 5,000. They are spread out among most the buildings on their camps but could easily consolidate and completely vacate several of them.

This is Building 13 and the directly attached garage.

The garage serves much more than that one building, so CLO could easily acquire others and have room to park employees.

http://www.okctalk.com/images/pete/chk13a.jpg


http://www.okctalk.com/images/pete/chk13b.jpg


http://www.okctalk.com/images/pete/chk13c.jpg


http://www.okctalk.com/images/pete/chk13d.jpg

Really makes me wonder what state agencies would be moved up there, particularly with the SandRidge Tower consolidation already happening.

Really makes me wonder what state agencies would be moved up there, particularly with the SandRidge Tower consolidation already happening.

They may move DEQ so they can have space for their lab.

If they go to SandRidge, the lab would have to be elsewhere.

Nothing says Oklahoma like putting DEQ right next to CHK. 😂

nothing says oklahoma like putting deq right next to chk. ��

ha!!!!

gopokes, you're welcome to your opinion. But a lot of facts back me up. Happy to debate that elsewhere with you.

Maybe you guys can head over to Kat's and settle this over some Oklahoma Craft Beers at a socially acceptable distance?

To that point, if CHK is still around in 5 years with < 200 employees, does that even count any more? The losers here are the employees. I'm not wishing for this to happen, im just being (at least what i think is) realistic. Aubrey did such bad crap for so long, and everyone there is paying the price for it with their jobs and their livelihood. Thousands of people are having to deal with this now. Had he not made the choices he had, CHK may have been able to weather the downturn in a more manageable way.

Sandridge was dealt a bad hand from day 1. I'm surprised it lasted as long as it did (knowing things from the inside). But again, they didn't make wise choices and overspent on lavish bull and when the market turned, they had no reserves and no where to go but down. Count the number of CEOs in a 5 year period there...its nuts. Carl Icahn didn't help either....he does nothing but causes problems wherever he goes, but that's another conversation.

A lot of this mess looks a lot like the autoworkers contracts. Get a bunch of money and benefits now, but it's going to cause you to lose your job later. Oh and your retirement is going to go bust for the same reason so when you're 85 and your benefits tank, you're stuck with nowhere to go. Great choices there. The point being, spend more conservatively folks. The lavish spend rarely turns out well in the long-term. I have no loveless for Paycom, but right now they are adding amenities as well, but they're not going nuts. No wine cellars and grocery stores. No buying up swaths of prime real estate for dumb crap.

I'll be the first to agree that Aubrey did some shady things... especially when EVERYBODY was telling him to slow down, he just kept going and going and going. Dumb, for sure.... but he's been fired for over 7 years now.

The retirement concern is largely invalid - while the 401k match offered was originally in CHK shares, it has been a cash only match for ~6 years. The new CEO was not in support of this idea, and fixed it quickly. Anybody with CHK in their 401K could have traded it into another fund at any point after the 401K match (15%!) was changed to "cash" (20% vest/year).

I'm hearing from my friend there that there actually isn't much concern at all right now for layoffs.. I mean, sure, they could happen, but the company just did one in the last 60 days. Before that, it was January 2018. Layoffs and the energy industry go hand in hand. High risk business, and that's why it pays more than average.

Aubrey was a swindler from the beginning and had everyone convinced of his lies. I've said this for years so im not just jumping on some wagon here. He was crooked and it finally caught up with him.

Any responsible company doesn't do the crap he did. The campus was stupid ridiculous and now they're going to have to deal with the consequences of it because no one is going to want to rent it out. Had they built a regular structure, the would have been able to do something with it (as in keep adding on more connected sections that you could then seal off from one another later). But no, it's all purpose built and no one wants it. And in a post-covid office world, they're going to have to cut the rent by half to get anyone to even think about it.

My bet is that CHK gets liquidated to pay the debt. No one wants to buy it because it's not worth it. They'll continue to shrink until there's nothing left and the place shudders the doors. It may not happen right now, but my bet is that in 5 years, CHK will be a thing of the past. Yet another death from $25 a barrel oil.

They've already reached an agreement with holders of debt, have a business plan to work through bankruptcy, and aim to emerge in about a year. "Liquidation" is not part of this plan.

They've already reached an agreement with holders of debt, have a business plan to work through bankruptcy, and aim to emerge in about a year. "Liquidation" is not part of this plan.

- This particular statement is made by every single company ever entering Chapter 11...

- This particular statement is made by every single company ever entering Chapter 11...

because that is exactly what Chapter 11 is - you are thinking of Chapter 7.

Good short write-up:
https://www.economist.com/business/2020/07/04/how-chesapeake-energy-changed-the-world?fsrc=newsletter&utm_campaign=the-economist-today&utm_medium=newsletter&utm_source=salesforce-marketing-cloud&utm_term=2020-07-02&utm_content=article-link-3

Today, Lackmeyer wrote this in an article in today's paper about Chesapeake:


Chesapeake spent more than $448 million constructing the core campus, a company spokesman indicated in a June 2012 interview with Bloomberg.

That number came directly from me after years of work and keeping track, and I was credited in that Bloomberg article as having provided it. In fact, I had so much information on this subject that Bloomberg flew me to OKC to meet with their reporters at a time when I still lived in California. I shared dozens of spreadsheets where I had painstakingly compiled information for years and spent several days working with them.

BTW, I still have all that data and have also been keeping tabs on the prices they've received for what they've sold, almost always a fraction of what was paid and put into those properties.

Here is that entire article, which was pretty prophetic; written by John Helyar (author of Barbarians at the Gate) and David Wethe, who is one of the top energy reporters in the country:

*******************

Chesapeake Fall Threatens Oklahoma Real Estate Fire Sale: Energy (https://www.bloomberg.com/news/articles/2012-07-12/chesapeake-fall-threatens-oklahoma-real-estate-fire-sale)
John Helyar and David Wethe
July 12, 2012

Chesapeake Energy Corp., whose $805 million investment in Oklahoma City’s land and buildings has helped reduce commercial real estate vacancies, threatens to collapse the market as it faces a cash squeeze and seeks to sell assets.

The second-largest U.S. natural-gas producer has spent $448.7 million to build a 120-acre (50-hectare) headquarters campus in the northwestern part of the city and an additional $356.7 million to develop three nearby retail centers and buy office buildings and more land, according to Peter Brzycki, a former Oklahoma City real estate broker who tracks the company’s properties.

While a sell-off of its commercial property may please the company’s investors, who have seen share prices decline as Chesapeake struggles to fill a cash-flow shortfall, a quick divestiture would also depress Oklahoma City’s office market, local real estate professionals said.

“If something were to happen to Chesapeake, the whole northwestern market would collapse,” said Don Karchmer, a local developer and investor who’s been involved with some of the company’s real estate activities. “The whole community has a fear of what could happen. It would be a huge hurt.”

Chesapeake, the second-largest private employer in Oklahoma City, is seeking to sell as much as $14 billion in assets in 2012 to raise cash.

The company fell 2.6 percent to $18.59 at 11:25 a.m. in New York. The shares have declined 17 percent this year as gas prices fell and after reports that Chief Executive Officer Aubrey McClendon was getting personal loans from companies that were also financing Chesapeake.

No Sale
The Oklahoma City properties aren’t part of Chesapeake’s planned divestiture program, said Michael Kehs, a company spokesman.

“We use our real estate every day, so it’s not for sale,” he said. Kehs said Brzycki’s tally of spending on Chesapeake’s campus was low and the figure for other real-estate development was high. He declined to comment on the total investment number.

Investors, including billionaire Carl Icahn, have called for the company to get rid of assets that aren’t central to its energy production business.

“You’ve got a cash crunch, and you’re not a real estate developer,” said David Dreman, chairman of Dreman Value Management Inc. in Jersey City, New Jersey, which controls about 1 million Chesapeake shares. “If I had a cash crunch and I had really good wells and very promising property, I don’t think I’d be in the restaurant business.”

Leading Recovery
Chesapeake’s real estate holdings include shopping centers and land on which a restaurant co-owned by McClendon operates.

In recent years, Chesapeake has helped to cushion Oklahoma City from the nation’s recession and tepid recovery. The city’s

4.5 percent unemployment rate was the lowest of any metropolitan area with a population over 1 million, according to a May survey by the U.S. Bureau of Labor Statistics. Chesapeake had 5,000 local employees at the end of 2011, the city’s second-largest private employer after Integris Health.

The company has led a recovery of vacancy rates for top-tier office space in the city to “near pre-recession levels,” according to a report by broker Cushman & Wakefield Inc. The market’s 11.2 percent vacancy rate during the first three months of the year represents a 1.6 percentage point decline from a year earlier, it said. Less inventory has increased average Class A office rent to $21 a square foot.

Kerr-McGee Lessons
The $67 million Chesapeake spent to acquire three office buildings in the latter half of last year accounted for 75 percent of Oklahoma City’s total transactions in that real estate segment.

Now the company faces an estimated cash shortfall of $18.6 billion by the end of 2013, according to Alembic Global Advisors. Chesapeake has lost about $7 billion in market value in the past year amid falling energy prices and shareholder unrest about McClendon’s personal stakes -- and related debts -- in company wells. The board last month replaced McClendon as chairman and named four new directors.

Larkin Warner, a retired Oklahoma State University economics professor who lives near Chesapeake’s campus, recalls the departure of Kerr-McGee Corp., the Oklahoma energy company co-founded by McClendon’s great-uncle Robert Kerr that was bought by Houston-based Anadarko Petroleum Corp. in 2006.

“The day you begin to think the last few years are going to go on forever, that’s when you’re in trouble,” said Warner. For Kerr-McGee, “what happened was like the smile on the Cheshire Cat. It just gradually shrunk.”

Assessed Values
The company, which has leased 16 million acres of land nationally for drilling, has also been aggressive in its back yard, accumulating 3 million square feet of office space and paying top dollar for properties.

Chesapeake “routinely paid two to five times the current assessed value for virtually everything they acquired, and then added substantial construction costs on top of that,” said Brzycki, who has tracked 445 Chesapeake real estate purchases since 2005 using county and municipal records and who posts his findings on an okctalk.com forum.

Since 2005, the company has spent $152 million to acquire and upgrade office buildings away from its campus. Those 12 properties’ assessed value is now $106.2 million, according to municipal and county records. Chesapeake also put $152 million into development plans for three retail complexes, which now are 27 percent vacant and have an assessed value of $50.9 million.

Attracting Talent
While Oklahoma City commercial building valuations are based partly on comparable properties’ recent sales, according to the county assessor’s website, their assessed value doesn’t necessarily reflect market value.

Kehs said the main purpose of Chesapeake’s campus and adjacent retail development “is to create a work environment that is able to help us attract the best talent.” He declined to discuss the company’s real estate investment performance and said its office costs are lower than other large employers.

Chesapeake bought three tracts of land just south of its headquarters for $1.2 million in 2004. Within a year, it sold the parcels in two transactions for a total of $865,000, a 28 percent loss. The sale in part was in the form of a swap to add land to its campus.

Chesapeake spent $38.2 million in 2011 to buy an office building called Caliber Center, which had sold for $20.1 million four years earlier. The company’s $7 million purchase of an office building called Possum Creek in 2010 was two-and-a-half times what the property fetched five years earlier.

Nichols Hills
McClendon, who began his career as a land man buying up drilling rights, has been closely involved in Chesapeake’s real estate activities. He’s personally contacted owners of properties of interest to Chesapeake and sketched out plans to redevelop Nichols Hills Plaza on a paper napkin while lunching with then-tenant Robert Pemberton, owner of the Crescent Market.

That grocery store’s departure is one reason this effort hasn’t gone well with some residents and officials of Nichols Hills, an upscale suburb across the street from Chesapeake’s campus where McClendon and his wife and other prominent families reside.

After spending $66.5 million to purchase a variety of properties there, Chesapeake’s plans have been blocked by town officials concerned that a makeover of the retail center will cause shops to close for an extended period. The community of Nichols Hills counts on sales tax receipts from merchants for the majority of municipal revenue.

Whole Foods
The company also has met opposition from Nichols Hills Plaza patrons, some of whom staged a rally last October. The patrons were protesting the demise of two longstanding businesses, including Crescent Market. Pemberton, who said his family-owned business dates back to the Oklahoma land run in 1889, couldn’t compete with the new Whole Foods Market Inc. store in a Chesapeake-owned shopping center.

“Aubrey saw himself creating a new kind of market that Oklahoma City is ready for and there’s some logic to that, but it hasn’t worked out that way,” said Karchmer, the real estate developer who considers himself an admirer of McClendon.

For now, Chesapeake continues to expand its headquarters campus. Four construction tower cranes overlook eight new buildings and earthmoving equipment lays groundwork for more.

A 40-foot (12-meter) pile of dirt towers over the back yard of Charlie Maupin, a 63-year-old landscaper. Chesapeake has bought up scores of homes to expand its campus, and his could be next. The house, built with his hands, once looked out on trees. It now faces a clay-colored retention pond.

The landscaper said he’s gotten occasional calls from Chesapeake’s CEO asking if he’s ready to move.

Maupin expects to be compensated fairly by Chesapeake when he does move, and he thinks McClendon will turnaround the company. “He’s going to pull rabbits out of his hat for the next 10 years.”

I've mentioned this several times: Chesapeake has never put its properties on the open market.

Almost all the sales -- most at a tremendous loss -- were to locals who seemed to have sort of connection to the company.

I know of several instances where interested parties contacted them about surplus real estate and didn't even get return calls.

Today, Lackmeyer wrote this in an article in today's paper about Chesapeake:

That number came directly from me after years of work and keeping track, and I was credited in that Bloomberg article as having provided it. In fact, I had so much information on this subject that Bloomberg flew me to OKC to meet with their reporters at a time when I still lived in California. I shared dozens of spreadsheets where I had painstakingly compiled information for years and spent several days working with them.

BTW, I still have all that data and have also been keeping tabs on the prices they've received for what they've sold, almost always a fraction of what was paid and put into those properties.

Here is that entire article, which was pretty prophetic; written by John Helyar (author of Barbarians at the Gate) and David Wethe, who is one of the top energy reporters in the country:



“We use our real estate every day, so it’s not for sale,” he said. Kehs said Brzycki’s tally of spending on Chesapeake’s campus was low and the figure for other real-estate development was high. He declined to comment on the total investment number.



Shortened your quote so as to not take up the entire page

Not only did you provide the number as the article clearly indicates, but the company spokesman denied confirming the number exactly. Does Lackmeyer and Co. have any ethics at all?

What a loser.

because that is exactly what Chapter 11 is - you are thinking of Chapter 7.

It's all a matter of what the current step is vs the eventuality. There's no solvency here. Unless oil spiked and went up to 60-70 a barrel, then there' really no chance. Even with a restructure, there isn't going to be anything left. And if there is something left, dont be surprised if someone buys it up solely for the drilling properties and drops the office completely. It's not as though they are large enough to not be absorbed by anyone big enough to buy them at this point. All signs point to no future here.

It's all a matter of what the current step is vs the eventuality. There's no solvency here. Unless oil spiked and went up to 60-70 a barrel, then there' really no chance. Even with a restructure, there isn't going to be anything left. And if there is something left, dont be surprised if someone buys it up solely for the drilling properties and drops the office completely. It's not as though they are large enough to not be absorbed by anyone big enough to buy them at this point. All signs point to no future here.

Anything is a possibility now but keep in mind, there are many smaller O &G companies operating independently. Nothing says someone is destined to sweep up the post bankruptcy Chesapeake.