Chesapeake Business Practices

[dcsooner]

Archie Dunham is the non-Executive Chairman of Chesapeake Energy and the man that probably had the ultimate say in who became the new CEO. And OKC hasn't diversified nearly as much as they need to, but we're getting better in this regard. And Lawler's history is a legitimate cause for concern for some. That's fine if it worries DC. It doesn't have to worry you.

Yea remember the Company FOUNDED in Oklahoma like Kerr McGee? Phillips 66, that was was bought/merged with Conoco to make ConocoPhillips in HOUSTON?
Although Archie was Oklahoma born, his pedigree now is distinctly, Houston.

He was a Director of the American Petroleum Institute, the U.S.-Russia Business Council and the Greater Houston Partnership. He served on the board of the Memorial Hermann Healthcare System in Houston, the board of visitors of M.D. Anderson Cancer Center Houston the board of Trustees of the Houston Symphony, the George Bush Presidential Library and the Smithsonian Institution. He served as a Trustee of Houston Grand Opera

[warreng88]

Btw, who's Archie? You mean Aubrey? The guy that has already started another business? Oh, and okc has diversified. They've diversified a lot. Your doom and gloom bit is getting old.

Archie Dunham is the Independent Non-Executive Chairman for CHK. He was appointed in June of last year when Aubrey was stripped of his Chairman title.

[HangryHippo]

Really poor understanding of what is going on here.

Kerr-McGee was sold under differing circumstances (it was a shell of its former self by the time Anadarko purchased it) and was the path chosen by their shareholders. The fact that it is the same guy means nothing. Chesapeake couldn't be sold even if it wanted to. Things have stabilized there but nobody is touching that company with a 6 foot pole. There is far more pressure to sell off assets to pay down debt and refocus their drilling program. I would frankly be more worried about any affects from that.

Are you not making the case with your own post that CHK will not be what it once was by the time this is all over? Doesn't that lend credence to the idea that it could be sold? There were most certainly interested parties, but CHK's debt load was keeping them at bay. Once CHK is a shell of its former self (debt gone, smaller asset core) doesn't that make them an even more attractive target? I'm not saying that the new CEO is here to move them to Houston as a part of this conspiracy theory, but to totally dismiss the idea that CHK might leave seems a little brash. Of course, Kerr McGee's shareholders approved and we don't know what CHK's would do, but you get the idea.

[ljbab728]

In case someone doesn't know, it was reported that Chesapeake has donated $1M today to the Red Cross to assist with recovery efforts. Kudos to them.

[HangryHippo]

In case someone doesn't know, it was reported that Chesapeake has donated $1M today to the Red Cross to assist with recovery efforts. Kudos to them.

Indeed.

[OKCTalker]

CHKs stock price is closing in on its 52-week high of $22.97 (currently $22.48). The 12 month graph looks like the Vomit Comet's altitude profile during a training mission, but the company seems to be making some headway.

[ou48A]

More and more of CHK's revenue is now coming from liquids, which helps.
Some investors are finally liking the future prospects of natural gas prices and they have got to like a better managed company that comes without the turmoil at the top.
A well run profitable company is always in our city’s / states best interest.

[Pete]

Looks like things have stabilized at Chesapeake:

Chesapeake touts fiscal discipline as earnings rise | News OK

Lawler said the company will exercise greater fiscal discipline by bringing its capital expenditures in line with its cash flow.

He said ongoing asset sales have raised enough money to fund all of Chesapeake's planned capital expenditures this year, but additional sales still are possible.

[Teo9969]

CHK is up almost 7% today. $24.89...haven't seen $25 since the start of the 2012 descent. Hasn't seen $30 since 2011

[pw405]

I've heard rumors of layoffs swirling about... anybody know if there is truth to those? Sounds like the new CEO has helped boost investor confidence, which is only good for OKC!

[BillyOcean]

The "Bobs" will be done with their evaluation in October. Expect heads to roll then. I am shocked at how long they have held off with major layoffs.

[mugofbeer]

I've heard rumors of layoffs swirling about... anybody know if there is truth to those? Sounds like the new CEO has helped boost investor confidence, which is only good for OKC!

Per relative who works for CHK, there are definitely layoff rumors going around.

[Pete]

I'm curious to know how many employees they have now, as they've sold off lots of assets and their entire midstream entity.

The last reported 3,200 in OKC but I'm sure that number is down considerably.

[ljbab728]

This speaks well to Chesapeake's stability.

http://www.oklahoman.com/article/3869354?embargo=1

[warreng88]

Wow. Just wow...

Four top Chesapeake Energy Corp. executives are leaving the company, as part of an ongoing reorganization effort, CEO Doug Lawler said Monday.

Steve Dixon, chief operating officer and executive vice president of operations and geosciences; Jeff Fisher, executive vice president of production; Steve Miller, senior vice president of drilling and Martha Burger, senior vice president of human and corporate resources “are leaving the company to pursue other opportunities,” Lawler wrote in an email to company employees Monday afternoon.

Four executives leaving Chesapeake Energy Corp. | News OK

[coov23]

Is this the beginning of the end for Chesapeake?

[warreng88]

Is this the beginning of the end for Chesapeake?

I hope not, but it kind of sounds like it. Maybe they are just trying to shed those seven figure salaries and pump some new blood in there. At least that is what I keep telling myself.

[HangryHippo]

Is this the beginning of the end for Chesapeake?

Sure looks that way.

[PWitty]

Sure looks that way.

You can look at it from a lot of different perspectives, but those four are the last remaining VP's and Executives who were at Aubrey's side as he grew the company to what it is today. IMO Doug is just continuing along with what the new board had already been doing which was distance the company as far away from Aubrey as possible to make the shareholders happy. It's not uncommon for a new CEO to bring in his own guys. It's no different than a head basketball/football coach bringing in his own staff. I mean did anyone honestly expect all the VP's from Aubrey's tenure to remain??

[PhiAlpha]

Sure looks that way.

Ok doomsday squad...this is not the end of CHK, but a salary dump as well as a play for Lawler to hire more of his people. Martha Burger was making a 7 figure salary as the VP of HR... which is very atypical of most normal oil and gas companies. I'm sure the others had overly inflated salaries as well. They can replace them with equally qualified employees and pay them much less. I had been hearing rumors that at least Steve Dixon and Martha Burger would be departing since Aubrey announced his resignation.

Stop looking at every single change as if it's the end of CHK, there are going to be a lot of them as they try to slim down and refocus, so fasten your seatbelt. There will likely be layoffs and more executives departing at both CHK and Sandridge. It sucks but that's what happens when new CEOs take over poorly performing, oversized companies.

[Rover]

Out with the old cronies, in with the new ones.

[BillyOcean]

Ok doomsday squad...this is not the end of CHK, but a salary dump as well as a play for Lawler to hire more of his people. Martha Burger was making a 7 figure salary as the VP of HR... which is very atypical of most normal oil and gas companies. I'm sure the others had overly inflated salaries as well. They can replace them with equally qualified employees and pay them much less. I had been hearing rumors that at least Steve Dixon and Martha Burger would be departing since Aubrey announced his resignation.

Stop looking at every single change as if it's the end of CHK, there are going to be a lot of them as they try to slim down and refocus, so fasten your seatbelt. There will likely be layoffs and more executives departing at both CHK and Sandridge. It sucks but that's what happens when new CEOs take over poorly performing, oversized companies.

Absolutely spot on except for SD comment. They have already had the turnover with execs. All new group that was selected by Bennett who was also added to the board today.

[Pete]

Yes, by changing out those four people alone, CHK can save millions a year. When you're paying your HR person over a million a year (!!!) in Oklahoma City, you've pulled into crazy town. What do you suppose she was paid by her previous employer?? And the others were all paid more, I believe.

Plus, I'm sure this is in advance of a major re-org with some layoffs.

The salaries -- at least at and near the top -- are absolutely insane and thus low-hanging fruit for a new CEO who has been mandated to get costs under control.

I'm sure some good people are going to lose their jobs in this process and that always stinks, but this is no doubt the best thing for the company overall and what OKC needs is CHK to stabilize and continue to employ thousands for a very long time. All the steps thus far seem to be in that direction.

[tomokc]

If it continued, Chesapeake's uncontrolled spending would have killed the company. It was weakened to the point that Carl Icahn saw the potential of gaining control and breaking the company into pieces and selling them off. THAT would have been the end. That's when true changes began, and they continue.

The restructuring has a long way to go. CHK has too many employees, they are overpaid when compared with their industry peers, and they have significant high-profile real estate that needs to be divested (NHP, CC and others). It will be scary watching the layoffs, cutbacks and property sales, but they will result in a stronger, leaner, better-managed company that will survive.

This is good news.

[Pete]

The changes and sell-offs seem to be happening at a measured rate, which means there shouldn't be any large jolts to the local economy.

It's pretty common knowledge that they want to sell NH Plaza and a lot of the non-business property but they haven't dumped them all on the market, merely putting the woed out in the real estate community and entertaining offers.

I actually look forward to some of their properties getting into the hands of someone that will have to move things forward.