Chesapeake Business Practices

[MikeOKC]

CHK to Invest $1 Billion In Clean Energy

OKLAHOMA CITY, Jul 11, 2011 (BUSINESS WIRE)....

CleanER does not mean it's clean. Another Audrey McClendon-led disinformation campaign. The CHK-written press release which ends up on Business Wire (PR outlet) and runs verbatim by mainstream media shows how effective those things can be. The fact is that the this latest round of CHK disinformation is nothing more than the beginning of another huge multimillion dollar marketing campaign to make people believe natural gas is "clean." It's too bad Aubrey & Co. can't make their billions with intellectual honesty.

[MikeOKC]

As I expected, the move by CHK does nothing for the stock price and is seen as little more than a PR move.

Some snippets from story from The Street.

Chesapeake's Largesse Does Little for Stock

"For Chesapeake, though, there's really only one major potential benefit from supporting the natural gas vehicle market: Impacting the supply/demand balance in the natural gas market to such a degree that natural gas prices finally break out of the doldrums. That's not going to happen as a result of Chesapeake's $1 billion investment, according to several analysts in the energy markets, and that leaves the Chesapeake move as a yawner for investors."

"It doesn't mean the natural gas vehicle investment isn't a great PR move though, and it came at a good time. The New York Times stopped just short of describing Chesapeake as a Ponzi scheme in a recent article, prompting CEO Aubrey McClendon to write an letter to employees defending the company."


"Energy analysts pointed to the first sentence of the Chesapeake announcement as the first sign that the $1 billion investment was more PR than IRR [internal rate of return] for Chesapeake shareholders, and from a CEO, Aubrey McClendon, who has never been shy about marketing: "In an effort to help break OPEC's 38-year stranglehold on the U.S. economy and to lower energy costs to American consumers, enhance national security, stimulate economic growth, create hundreds of thousands of high-paying jobs and improve the environment..." Chesapeake began its press release."

"It's PR more than anything else," said Phil Weiss, analyst at Argus Research and a constant critic of Chesapeake management. "The T. Boone Pickens supported NatGas Act has lost steam and so the ball was tossed to Aubrey and he wrote a big check," Weiss said."

"Several other energy analysts didn't want to be quoted on Chesapeake's motivation but echoed Weiss's sentiment. "It's Aubrey's ego at work here," said one analyst. "It doesn't impact Chesapeake shares or the way any investor thinks about the company."

The stock was up 1.5% to $30.22 in recent trades.

http://www.thestreet.com/story/11184...for-stock.html

[MikeOKC]

Here's a fascinating piece about the practice of PR/News morphing. Using, guess who (?), as an example --- yep - Chesapeake Energy. She's 100% right. This is an excellent article. It all goes back to what I wrote a post or two back about intellectual honesty. She looks at the recent back and forth between the NYT and CHK and those that support fracking. Also, she is spot-on about CHK's use of PR as "news" and how, repeated often enough, it becomes "news."
News Coverage Vs. PR: Is Fracking a Panacea or a Ponzi Scheme?

I have to include the end of the article, as it so clearly shows how incredibly clueless and cocky AM can be:

But in the end, it all boils down to values, as McClendon makes clear his own lack of interest in the free press, in journalism, and in environmental accountability. In his open letter, he asks "What value has the NYT or environmental activists created during these same past seven years? You either create value in this world or you consume/destroy it -- we are value creators, please never forget that."

Wow.

[MikeOKC]

For continuity and to show the pattern of contempt shown to stockholders, please see my post concerning CHK's latest outrage (Chesapeake Arena):
http://www.okctalk.com/showthread.ph...328#post451328

[MikeOKC]

And the hits just keep on comin'!


5 Outrageous CEO Spending Abuses & Perks
http://www.sfgate.com/cgi-bin/articl...pedia56111.DTL

AND (same day)

"Chesapeake Energy (NYSE: CHK ) occasionally enters the spotlight for the egregious pay CEO Aubrey McClendon rakes in. My Foolish colleague Matt Koppenheffer recently asked whether Chesapeake Energy is run for McClendon's benefit, rather than shareholder value. So it's no surprise to find Chesapeake on the list of jet-set offenders as well. Its corporate aircraft payout adds up to $500,000, with its TCL compensation score denoting "very high concern," although its AI risk rating is just "average."
http://www.fool.com/investing/genera...ur-stocks.aspx

[MikeOKC]

OUCH! The truth hurts...This should wake-up some prospective CHK buyers. Aubrey, probably time for another Cramer puff piece.

Chesapeake: The Lost Decade

http://seekingalpha.com/article/2878...he-lost-decade

and.....

this exclusive Reuters report on Aubrey's sweetheart FWPP deal which allows him to - personally - cash-in on every well...
http://www.reuters.com/article/2011/...77E4BT20110815

"Paul Hodgson, senior research associate and an expert in executive compensation at GMI Ratings, a corporate governance research and ratings firm, expressed skepticism about the FWPP. Chesapeake's behavior and governance raise concerns that over the long term "significant shareholder loss" may occur, he said."

So much smoke, all the time, when and where is the fire? Poor Jim Cramer, Aubrey's big buddy, must think all his work for CHK is destined to be for nothing.

[Maynard]

OUCH! The truth hurts...This should wake-up some prospective CHK buyers. Aubrey, probably time for another Cramer puff piece.

Chesapeake: The Lost Decade

http://seekingalpha.com/article/2878...he-lost-decade

and.....

this exclusive Reuters report on Aubrey's sweetheart FWPP deal which allows him to - personally - cash-in on every well...
http://www.reuters.com/article/2011/...77E4BT20110815

"Paul Hodgson, senior research associate and an expert in executive compensation at GMI Ratings, a corporate governance research and ratings firm, expressed skepticism about the FWPP. Chesapeake's behavior and governance raise concerns that over the long term "significant shareholder loss" may occur, he said."

So much smoke, all the time, when and where is the fire? Poor Jim Cramer, Aubrey's big buddy, must think all his work for CHK is destined to be for nothing.