On May 10, 2012 10:04 am
From The Pittsburgh Post-Gazette.
Chesapeake Energy may be focusing on drilling in the Marcellus and Utica shales after company executives told investors this morning they plan to focus on oil- and liquids-rich holdings and slow their rapid-fire land acquisitions.
In the latest conference call hoping to calm skittish investors and share prices, Chesapeake chief executive officer Aubrey McClendon said his firm will temper land grabs and focus on shale acreage like that in Appalachia that comes loaded with lucrative natural-gas liquids and oil.
Mr. McClendon is under pressure from investors who say his company is borrowing and leveraging assets at an unsustainable rate.
The nation’s second-largest natural-gas producer, Chesapeake has a reputation for aggressively acquiring land in nearly every North American shale play. The company became the dominant driller of the Marcellus Shale through a series of land swaps and flips.
In recent weeks, the company has come under fire after it was reported that Mr. McClendon and his firm had taken out billions of dollars in loans to help finance operations. Chesapeake disclosed Friday that it had received a $3 billion loan from Goldman Sachs and the Jefferies Group.
“Believe me, Chesapeake’s management team is very, very focused on getting these funding gap issues behind us once and for all and as early as possible,” McClendon said.
Meanwhile, the Wall Street Journal reported that activist investor Carl Icahn has bought Chesapeake shares in an effort to force change at the company. Such purchases are not yet reflected in public Securities and Exchange Commission filings.
Mr. Icahn has been known to purchase shares when they’re low and demand a management or strategy change at the company.
Shares of the company plunged late Friday when executives stalled in releasing a quarterly earnings report but recovered somewhat this morning to hover below $16.