Chesapeake empire marches on

[Pete]

Especially because the the NewCo plans to completely vacate the "brick campus" (outlined in red below), it would probably make sense for that portion to be converted to housing and maybe a small hotel or two.

However, there is little parking within that boundary (just a bit of surface plus below the playfield), so at least one of the big parking garages would have to be part of that project.

The brick campus has a large fitness center, restaurants (though mostly shuttered), an adjacent childcare center, a playfield, and beautiful grounds.


Everything east of Classen could be leased out and the vacant land sold to a developer - CHK owns everything to the RR tracks.

[jn1780]

It would seem that their decision to move everyone into one building across the road from the original campus would signal an impending change in mindset/strategy here.

Maybe the name change will help them overcome sunk cost fallacy?

[BoulderSooner]

i wonder how many parking spots are under the field ..

looks like there are a little over 200 surface parking spots (not county handicaped)

[Rover]

Maybe the name change will help them overcome sunk cost fallacy?

? Please explain.

[jn1780]

? Please explain.

A name change is symbolically ending the chapter on the Audrey Mclendon era. Those expenses and former dreams are in the past. They are never going to recoup all of their loses. Don't know what will happen with those buildings, but they won't sell for what they want for them.

[Pete]

^

Most that CHK property was never on the open market and almost exclusively sold to Chesapeake chronies.

The whole thing -- even after Aubrey was shown the door -- has been incredibly strange.

[Rover]

^

Most that CHK property was never on the open market and almost exclusively sold to Chesapeake chronies.

The whole thing -- even after Aubrey was shown the door -- has been incredibly strange.

It seemed as if most of the old deals were all funneled through one broker and one lawyer. They seemed to be the drawbridge keepers.

[Bill Robertson]

The way the campus is currently set up, makes sense to convert the offices into apartments/condos. That is the current trend right now across the nation, converting glut of old office space that has been sitting vacant into housing.

I wouldn't be surprised if that is the outcome.

If the property could be bought for a remotely decent price the layout would be very good. A gym, a daycare, restaurants already there. Part way to the type of mixed-use development that so many people always want.

[Pete]

The main campus is really beautiful and it's a fantastic location.

The real issue is finding a price two sides could agree upon. CHK will never come within 25% of recouping their costs.

[Bill Robertson]

The main campus is really beautiful and it's a fantastic location.

The real issue is finding a price two sides could agree upon. CHK will never come within 25% of recouping their costs.

No, they won't come close to recouping that. So if that's the bar that's set the campus will be empty for a long time. Which would be a huge shame. It's a beautiful campus.

[Pete]

No, they won't come close to recouping that. So if that's the bar that's set the campus will be empty for a long time. Which would be a huge shame. It's a beautiful campus.

They've taken pennies on the dollar for dozens of other properties they've spun off.

I suspect with the new ownership, name, and a clear plan forward, they will eventually sell off that central campus. And that would be a good thing for OKC.

[PhiAlpha]

Except they already had a bunch of vacant buildings on the market before this announcement.

Sure but have they ever previously consolidated to a single building or one part of the campus leaving a huge contiguous part of it completely empty? It sounds like they’ve been spread out across multiple buildings in the original campus as well as the Rand Elliot buildings across the street. Unless it’s been done before (I don’t think it has), the fact that they’re consolidating into a single building seems to indicate a shift in how aggressive they’re going to be about selling or leasing the rest of the campus….otherwise why else do it?

[gopokes88]

A name change is symbolically ending the chapter on the Audrey Mclendon era. Those expenses and former dreams are in the past. They are never going to recoup all of their loses. Don't know what will happen with those buildings, but they won't sell for what they want for them.

Those losses were wiped out in bankruptcy

[PhiAlpha]

Those losses were wiped out in bankruptcy

That's what I was going to ask. Since the bankruptcy, I'm not sure how much recouping that they're actually concerned about. My guess is that leasing or selling the main campus just hasn't been a big enough priority for them to get aggressive with it and to date, they haven't received any offers (other than from Diamondback and I think that building was completely empty at the time) that made it worth it to them to shuffle people around and give up control of the space.

Consolidating into one building in conjunction with a merger creating one of the largest natural gas producing companies in the world and a name change/rebrand seems to signal that they are going to start actively trying to do something with it.

[Pete]

Sure but have they ever previously consolidated to a single building or one part of the campus leaving a huge contiguous part of it completely empty?

Yes.

Everything east of Classen -- which is more space than the brick campus -- has been vacant for years and openly marketed.

[Teo9969]

You'd think they'd sell ASAP to minimize the tax bill. The brick campus buildings were early aughts, so they're about halfway through the depreciation cycle. Good time to sell for $0.40 on the dollar and be able to take a slight loss rather than depreciate further and start facing gains tax on a principal loss

[BG918]

Oh the stories I could tell about CHK in the early 10’s. Especially after gas prices tanked. Scores of employees that literally had no work to do but still showed up to campus, worked out at the on-site gym, ate at the on-site restaurants and were paid $200k+ annually. It was a house of cards.

[mugofbeer]

Sounds like Penn Square bank.

[bombermwc]

It's the nature of oil and gas folks. It's a boom and bust industry. One day prices are soaring and you build a 50+ floor skyscraper out of your own pocket and even plan on building a second building. The next day COVID happens and prices tank to where they haven't been in 30 years and never quite fully recover. That's an extreme example, but the ups and downs of this industry are why so many companies (and service companies) come and go so often, as well as the staff for orgs like CHK. If you're looking to bank a sweet dollar, it can be a great place to work. But you have to go in knowing that you're going to be in a risky position that may not have staying power. And even if you do stay, it may only be until the next round.

Is that much different from other industries? One could argue that it is not. But i think it's more pronounced and more cyclical in energy.

[Rover]

Sounds like Penn Square bank.

Only because both were in OKC. But, very different stories.

[Urbanized]

The mechanics of it all definitely differs, but both stories involved oil and gas, boom/bust, irrational exuberance, and people who were living high on other people’s money.

[Pete]

The mechanics of it all definitely differs, but both stories involved oil and gas, boom/bust, irrational exuberance, and people who were living high on other people’s money.

And local press completely ignored open secrets, largely due to a conflict of interest in taking tons of advertising.

CHK used to take full-page ads in the Oklahoman and never was heard a discouring word even as that company spiraled out of control. It took Reuters, Fortune and Business Week to finally lay things out and once they did, AKM was run out and at least the company's shell was salvaged.

[jn1780]

It's the nature of oil and gas folks. It's a boom and bust industry. One day prices are soaring and you build a 50+ floor skyscraper out of your own pocket and even plan on building a second building. The next day COVID happens and prices tank to where they haven't been in 30 years and never quite fully recover. That's an extreme example, but the ups and downs of this industry are why so many companies (and service companies) come and go so often, as well as the staff for orgs like CHK. If you're looking to bank a sweet dollar, it can be a great place to work. But you have to go in knowing that you're going to be in a risky position that may not have staying power. And even if you do stay, it may only be until the next round.

Is that much different from other industries? One could argue that it is not. But i think it's more pronounced and more cyclical in energy.

Oil and Gas seem to be able to use less human resources now so there's that. They can't get around the amount of time it takes and money to invest in rigs though and you never know what is going to happen overseas.

[OUGrad05]

And local press completely ignored open secrets, largely due to a conflict of interest in taking tons of advertising.

CHK used to take full-page ads in the Oklahoman and never was heard a discouring word even as that company spiraled out of control. It took Reuters, Fortune and Business Week to finally lay things out and once they did, AKM was run out and at least the company's shell was salvaged.

Very true and very disappointing.

[warreng88]

General question because I am too stupid to understand: Aubrey openly stated he wanted to build out the campus to employ 10,000 people. Back in 2014, GAR was $23 billion. Now, with the merger, they will employ 800 people. Was Aubrey over employing or has technology changed enough in ten years to where you don't need as many employees as much?

Again, not trolling, not knocking Aubrey, genuinely asking...