Chesapeake Business Practices

[dankrutka]

My guess is this sort of practice is not limited to Cheapeake...Likely standard business with all oil and gas company land grabs

Do you know this or are you just assuming everything is okay? I'm honestly asking because I don't have enough business acumen to know whether CHK is being reckless tom itself and thus OKC, but I'd like for people to have this conversation so pressure could be put on them to right the ship (if need be)... What do others think? Shoud we be worried?

[Easy180]

Do you know this or are you just assuming everything is okay? I'm honestly asking because I don't have enough business acumen to know whether CHK is being reckless tom itself and thus OKC, but I'd like for people to have this conversation so pressure could be put on them to right the ship (if need be)... What do others think? Shoud we be worried?

I have just a limited knowledge of the practice but I do know land grabs are extremely competitive and the oil companies aren't exactly looking out for the land owners...Wouldnt surprise me at all that Chesapeake would be one of the worst just fairly certain they are not alone is all

[MikeOKC]

I love it - people are now sending me links to post. I admit, I did miss this, so it's a few days old.

From Foreign Policy (Oil & Gas): When You Are Betting on Shale Gas, Watch the Dealer's Eyes.

This was right after CHK's bailout by TOTAL in Ohio.

When someone invites you to a party but leaves before dessert, it might be time to locate your own coat and hat. Such are the suspicions generated by Chesapeake Energy, which after selling numerous billion-dollar pieces of its vast shale gas holdings to the world's largest energy companies has abruptly announced that it is drawing down.

<->

"...we have found McClendon temperamental and ideologically self-destructive to a degree that risked the entire shale-gas bonanza, but that's just us."


<->

But last week, Chesapeake announced that the risk is too high. The shale-gas rush had resulted in the historical boom-bust bane of the oil patch -- massive over-production, and a price collapse -- and McClendon was moving on; oil, for example, was looking pretty good, the company said. In an amusing piece at the Financial Times, John Dizard, a long-time shale gas skeptic, quotes from Catch-22, and goes on to describe Chesapeake's announcement: "The Wall Street maxim is that they never ring a bell at the top. However, on Jan. 23, Chesapeake Energy did ring a bell at the bottom. The undoubted leader of the shale gas revolution announced that it would reduce drilling expenditures this year by more than 70 per cent, curtail its gas production by 8 per cent, cut land buying by $2 billion, and allow uneconomic gas leases to expire."

<->

One only notes that McClendon was not signaling his new religion as recently as a month ago, when he was helping himself to Total's billions. According to calculations by Bloomberg's Joe Carroll and Jim Polson (who relied on numbers provided by the consultants IHS Inc.), Total paid $15,000 an acre for the Chesapeake property, or "more than four times the average per-acre price from seven Utica shale transactions tracked by IHS from March 2011 to September 2011." This seemed like a bubble. The Jan. 18 Bloomberg piece quotes IHS analyst Sven Del Pozzo: "I don't feel confident that the prices being paid now are justified. I'm wary."

AubreyNews Part Two...

And finally, this from The State Journal, West Virginia's Business Journal. Whether you agree, disagree, have no opinion, whatever, it seems to always come back to not what Aubrey is necessarily doing - but how he's doing it. This guy is just more of an embarrasment with every passing week.

Coal industry wants answers from Chesapeake on anti-coal funding

The link above is worth the read. Such hypocrites at CHK - and they do it so well. Also, on the same subject: http://dailycaller.com/2012/02/04/si...coal-industry/

When will the people of Oklahoma City wake-up and realize that we have corporate Masters of Deception operating over at 63rd & Western? It's so embarrassing. God, how I wish their name wasn't attached to the old Ford Center. People see that emblazoned in lights, and those who follow business must cringe to see that sordid name of Chesapeake Energy Corporation. Yet, people around here? We rarely hear any of this news. I'm hoping the new owners of The Oklahoman will open up and allow a little of the truth about these outlaws to be heard in their hometown.

In the end, it's our city they are sullying and putting at risk.

[blangtang]

Thanks for sharing the links. A little sunshine can't hurt.

I'm too dumb to figure out what CHK is up to, but it seems trendy to follow the Sandridge way and shift toward the oils and away from natty gas. Gotta hand it to Sandridge, they were ahead of the curve on that strategy.

[mugofbeer]

Regarding the parts prior to the coal story - - - I'm not sure what you are trying to insinuate that is particularly wrong. McCLendon has pitched NG all along but right now there is such a glut that the price has plummeted. What half-intelligent business person in his shoes wouldn't cut production faced with that. Second, CHK has too much debt...we all know that. So he sells a stake of a field to Total. I am sure Total has many wise financial folks in their employ who would have said not to do it if they didn't feel it wasn't going to be a profitable deal in the long run. Unless there is more that is not here, I don't see the problem. He is doing everything he can to get government and the people to buy into NG cars until better technology comes along. Seems a good bridge from gasoline to electric or whatver comes down the road

Now, let me just say, I don't think McClendon is by any means the best CEO that has ever walked the face of the earth, but I'm not seeing the problem on this issue.

[Bellaboo]

'And finally, this from The State Journal, West Virginia's Business Journal. Whether you agree, disagree, have no opinion, whatever, it seems to always come back to not what Aubrey is necessarily doing - but how he's doing it. This guy is just more of an embarrasment with every passing week.'

West Virginia has been mad since CHK shut down their regional headquarters in Charleston several years ago for other reasons. You don't have to look to hard to find all kinds of negatory from them. Maybe they should have developed better drilling policies. ?

[BoulderSooner]

you don't like CHK or Aubrey we get it

[MikeOKC]

you don't like CHK or Aubrey we get it

Why would you waste the time to post that?

Do you really think I post the news I do here about CHK because I want everyone to know that I "don't like CHK or Aubrey?" Really?

I've posted time and time again why I post the news that I do in this thread. From another post:

"Warning people in Oklahoma City about Chesapeake has to be done here, and the national financial press, because no local news outlet will dare touch anything negative about this company. It's the same old story: Power. Influence. Money. Make no mistake, I do not want CHK to fail. Period. That would be catastrophic for this city. It is because of my love for our city that I bother posting here about Aubrey Kerr McClendon. All the good he's done (and he's done some) will come unraveled in a heartbeat if CHK - the public corporation - hits rough times with a merger/acquisition...or worse. This is about Aubrey's mismanagement of Chesapeake, his unethical (if not illegal) behavior, hubris and arrogance. CHK needs new leadership and Aubrey can go play with his shopping centers, basketball team, and other (sometimes) personal business. It's about the good of the company - and Oklahoma City."

This isn't about me, BoulderSooner. I'm reporting news and passing along links about CHK that's being reported everywhere else except Oklahoma City media. Why would you have a problem with that? If you read or watch other Oklahoma City media, you already know the positive news - most act as an extension of CHK's PR department. It's about POWER, MONEY, and the ability to silence critics in the hometown of Chesapeake Energy. So, I'm here --- I don't sell advertising and bow at the feet of the great Aubrey KERR McClendon.

[Bellaboo]

Why would you waste the time to post that?

Do you really think I post the news I do here about CHK because I want everyone to know that I "don't like CHK or Aubrey?" Really?

I've posted time and time again why I post the news that I do in this thread. From another post:

"Warning people in Oklahoma City about Chesapeake has to be done here, and the national financial press, because no local news outlet will dare touch anything negative about this company. It's the same old story: Power. Influence. Money. Make no mistake, I do not want CHK to fail. Period. That would be catastrophic for this city. It is because of my love for our city that I bother posting here about Aubrey Kerr McClendon. All the good he's done (and he's done some) will come unraveled in a heartbeat if CHK - the public corporation - hits rough times with a merger/acquisition...or worse. This is about Aubrey's mismanagement of Chesapeake, his unethical (if not illegal) behavior, hubris and arrogance. CHK needs new leadership and Aubrey can go play with his shopping centers, basketball team, and other (sometimes) personal business. It's about the good of the company - and Oklahoma City."

This isn't about me, BoulderSooner. I'm reporting news and passing along links about CHK that's being reported everywhere else except Oklahoma City media. Why would you have a problem with that? If you read or watch other Oklahoma City media, you already know the positive news - most act as an extension of CHK's PR department. It's about POWER, MONEY, and the ability to silence critics in the hometown of Chesapeake Energy. So, I'm here --- I don't sell advertising and bow at the feet of the great Aubrey KERR McClendon.

It's not like I'm going to buy their stock.....I have a lot of friends that work for CHK though...... I hope they make it. Besides, I like Aubrey's effort with the Thunder.....he helped make it happen. This isn't worth having a burr under your saddle is it ?

[onthestrip]

Maybe you chpk apologists don't have to read this but I for one like the fact that mikeokc posts news stories about chpk. Like he says, you won't get anything negative written about them in Oklahoma.

[Bellaboo]

Maybe you chpk apologists don't have to read this but I for one like the fact that mikeokc posts news stories about chpk. Like he says, you won't get anything negative written about them in Oklahoma.

I saw that Forbes issue on the grocery store Aisle before Christmas, here in Oklahoma.....

Not apoligizing, just don't think much of the issues raised. Like, why lose sleep over something you have no control over....?

[MDot]

I saw that Forbes issue on the grocery store Aisle before Christmas, here in Oklahoma.....

Not apoligizing, just don't think much of the issues raised. Like, why lose sleep over something you have no control over....?

Exactly. Haha

[Easy180]

Just something about Chesapeake that reminds me of CFS in Tulsa...Not sure why I'm suspicious of them but something just ain't right with that company

[dankrutka]

I'm worried. I've been worried for a long time.

[BG918]

I know people that work for CHK and even they think it's a House of Cards. Unless natural gas makes a comeback, and fast, they are setting themselves up for a big fall or takeover by a larger company. One friend would leave but can't let go of his high salary and unbelievable (and unsustainable) benefits.

[MikeOKC]

Again...don't kill the messenger. The Oklahoman/NewsOK obviously didn't think this first item important(!)

Standard & Poor's Downgrades Chesapeake

NEW YORK -- Standard & Poor's Rating Services has downgraded its outlook to negative on Chesapeake Energy Corp., citing depressed natural gas prices and the heavy debt the company carries.
http://business-journal.com/standard...e-p20954-1.htm

Interestingly, the AP story which is on CBSNews.com and others is missing from The Oklahoman which usually just rolls out the AP business feed online. You would think the hometown newspaper of a Fortune 500 company might report this news? Or, maybe not.

--------------------------------------------------------------------------

And...talk about developing a reputation. Same song, losing track of the verse. (Emphasis in bold inside the story is mine.)

Chesapeake Energy Pulls A Fast One In North Dakota?

Chesapeake Energy pulling back, won't honor lease agreements


Chesapeake Energy is not only pulling back to analyze results from six confidential oil wells in southwestern North Dakota, it also is sending notices to mineral owners in Hettinger and Stark counties that it won't honor lease agreements signed months ago.

<->

Attorneys for mineral owners in Hettinger and Stark counties said they've recently been contacted by clients who have had lease agreements returned by Chesapeake, saying the company doesn't plan to honor the contract and is releasing the lease, or the clients are holding signed leases that are delinquent past when the company agreed to pay bonuses.

<->

Dickinson attorney Charles Peterson said he has seven or eight clients, primarily with minerals in Hettinger County, who have either had leases returned, or lease bonuses that are delinquent.

Peterson said all the leases are with Chesapeake Energy or its entities. He said the leases are for between $450 and $700 an acre.

He said the situation is unique and covers a fair amount of acreage.

"I've not seen any of the other major companies do this. This is unusual to take the lease and refuse to honor it," he said.

State Mineral Resources Director Lynn Helms said anyone who's offered a lease should have it evaluated by an attorney. He said lease problems "would not be atypical for Chesapeake" which has had similar problems in other states where it does business.


Chesapeake spokeswoman Kelsey Campbell said the company doesn't talk about its leases.

http://bismarcktribune.com/news/stat...9bb2963f4.html

First the downgrade; yes, before someone says it, natural gas prices are in the tank, but the S&P downgrade to 'negative', for CHK and not other natural gas companies, is because of "the heavy debt the company carries." Aubrey just can't control the company credit card. We see this blatantly around town where they pay ridiculous prices for property.

As for the North Dakota problem, a state that is booming right now, it's pretty sad when the ND State Mineral Resources Director flat-out states, "lease troubles would not be atypical for Chesapeake." A government official in Maryland had it right when they said something along the lines of Chesapeake being the titans of sneaky fine-print in the oil and gas fields.

This is all just....sad.

[fromdust]

im no cheerleader for chesapeake, but i will say their environmental practices at their well sites for frac jobs is the best ive seen. most likely in the top of the industry.

[MikeOKC]

im no cheerleader for chesapeake, but i will say their environmental practices at their well sites for frac jobs is the best ive seen. most likely in the top of the industry.

This is strange timing, right after your post.


From Bloomberg/BusinessWeek (also at Fox Business, Reuters, L.A. Times and many others) today:

Chesapeake Energy Fined $565,000 for Pennsylvania Violations

Feb. 9 (Bloomberg) -- Chesapeake Energy Corp., the biggest leaseholder in Pennsylvania’s Marcellus Shale, was fined $565,000 by state officials for environmental violations, including an April incident in which hydraulic fracturing fluids entered a local creek.

<->

Chesapeake, based in Oklahoma City, was fined for three separate violations in 2010 and 2011, the Pennsylvania Department of Environmental Protection said in a statement today. Chesapeake has rights to drill on 1.78 million acres in Pennsylvania’s Marcellus, according to Bloomberg Industries.

<->

Chesapeake was fined $1.09 million last May for environmental violations related to its drilling in Pennsylvania.
http://www.businessweek.com/news/201...iolations.html

And this....more from just today...

Study Focuses on Marcellus Shale Environmental Violations

(February 9, 2012) A report by the PennEnvironment Research and Policy Center shows that, over the past four years, gas operators accumulated 3,355 violations of environmental laws. [PDF] The study was compiled using information from the Pennsylvania Department of Environmental Protection (DEP).

Erika Staaf, clean water advocate with PennEnvironment, claims more than 70 percent of the violations were possibly a direct threat to the environment.

“Over the last four years, Marcellus Shale gas drillers have demonstrated a track record of pollution that has contaminated our water. It has destroyed public lands. It’s threatened public health,” said Staaf. “And absent of strong state safeguards for air, water, and land, this pattern of pollution is set to continue.”

Staaf said the top five companies for total violations were Cabot Oil and Gas Corp with 412, Chesapeake Energy Corp. (393), Chief Oil and Gas, LLC (313), Talisman Energy USA, Inc. (303) and East Resources, Inc. (170)
http://www.essentialpublicradio.org/...olations-10154

Just passing along the news, folks.

[pw405]

Geez, as an avid okctalk lurker, reading this thread really worries me. It would be a huge loss for our city of chk starts to have lay offs. They are actually recruiting me away from my current employer and the starting salary is about 25% more than what I earn now!! What do I do?!

[fromdust]

well, theres the evidence, but again, they are a big client of ours. when i am on a frac job for them, they by far have the most stringent policies that ive seen.

This is strange timing, right after your post.


From Bloomberg/BusinessWeek (also at Fox Business, Reuters, L.A. Times and many others) today:

Chesapeake Energy Fined $565,000 for Pennsylvania Violations

Feb. 9 (Bloomberg) -- Chesapeake Energy Corp., the biggest leaseholder in Pennsylvania’s Marcellus Shale, was fined $565,000 by state officials for environmental violations, including an April incident in which hydraulic fracturing fluids entered a local creek.

<->

Chesapeake, based in Oklahoma City, was fined for three separate violations in 2010 and 2011, the Pennsylvania Department of Environmental Protection said in a statement today. Chesapeake has rights to drill on 1.78 million acres in Pennsylvania’s Marcellus, according to Bloomberg Industries.

<->

Chesapeake was fined $1.09 million last May for environmental violations related to its drilling in Pennsylvania.
http://www.businessweek.com/news/201...iolations.html

And this....more from just today...

Study Focuses on Marcellus Shale Environmental Violations

(February 9, 2012) A report by the PennEnvironment Research and Policy Center shows that, over the past four years, gas operators accumulated 3,355 violations of environmental laws. [PDF] The study was compiled using information from the Pennsylvania Department of Environmental Protection (DEP).

Erika Staaf, clean water advocate with PennEnvironment, claims more than 70 percent of the violations were possibly a direct threat to the environment.

“Over the last four years, Marcellus Shale gas drillers have demonstrated a track record of pollution that has contaminated our water. It has destroyed public lands. It’s threatened public health,” said Staaf. “And absent of strong state safeguards for air, water, and land, this pattern of pollution is set to continue.”

Staaf said the top five companies for total violations were Cabot Oil and Gas Corp with 412, Chesapeake Energy Corp. (393), Chief Oil and Gas, LLC (313), Talisman Energy USA, Inc. (303) and East Resources, Inc. (170)
http://www.essentialpublicradio.org/...olations-10154

Just passing along the news, folks.

[Easy180]

No doubt it would be a huge hit but if you are looking for a long term career this might not be your first choice...If you have a nice resume and won't have any problems landing elsewhere if things go south why not...25% ain't nuthin to sneeze at

You will soon be enjoying valet parking and the Chesapeake indoor waterpark built for employees

[Pete]

Chesapeake isn't going anywhere any time soon and the people that work there love the place. They certainly take great care of their employees.

I wouldn't pass on a good opportunity just because of some of the things posted here.

[dankrutka]

Chesapeake isn't going anywhere any time soon and the people that work there love the place. They certainly take great care of their employees.

I wouldn't pass on a good opportunity just because of some of the things posted here.

Why are you so confident? Just curious.

[Pete]

CHK has taken on several big joint venture partners which has brought in a bunch of cash lately and they've done a good job of switching their emphasis from gas to oil.

They are risk takers compared to Devon and SandRidge but it doesn't mean they are likely to completely implode.

On the other hand, they still have lots of debt which makes them an unlikely takeover target.

[onthestrip]

CHK has taken on several big joint venture partners which has brought in a bunch of cash lately and they've done a good job of switching their emphasis from gas to oil.

They are risk takers compared to Devon and SandRidge but it doesn't mean they are likely to completely implode.

On the other hand, they still have lots of debt which makes them an unlikely takeover target.

I've heard the opposite on switching more to oil. I've heard they haven't switched as much as they allude and that they are still too heavy in gas, which isn't faring too well right now. Let's hope chpk can hang on until some of these gas conversion govt programs come rolling out.