Chesapeake Energy Corp. Chief Executive Officer Aubrey McClendon will resign from the company he built into the second-largest U.S. natural gas producer after scrutiny of his personal finances and a corporate cash crunch erased as much as 43 percent of its market value last year.
McClendon will retire from the company April 1 and will serve as CEO until his successor is appointed, Oklahoma City-based Chesapeake said Tuesday in a statement. The board said it has found no evidence to date of improper conduct in the CEO's relationship with the company. Chesapeake rose 9.4 percent to $20.75 at 5:25 p.m., after the close of regular trading in New York.
McClendon, 53, led Chesapeake from its 1989 inception in Oklahoma City, amassing U.S. gas and oil fields that cover an area half the size of New York state. As one of the first explorers to embrace horizontal drilling and hydraulic fracturing, McClendon helped usher in a revival of U.S. gas and oil production with discoveries such as the Haynesville Shale in Louisiana and Utica Shale in Ohio.
The success of the drilling methods led to a glut of North American gas that drove prices to a 10-year low in early 2011, causing Chesapeake to cut jobs, pledge to curtail capital spending and sell more than $10 billion in oilfields and pipelines to help close a gap between cash flow and drilling expenses. The company lost $1.07 billion during the first three quarters of last year and net debt ballooned by 56 percent during that period to $16.1 billion.
The board will release its review of McClendon's financial transactions on Feb. 21, when announcing earnings results.
"While I have certain philosophical differences with the new board, I look forward to working collaboratively with the company and the board to provide a smooth transition to new leadership for the company," McClendon said in the statement.
McClendon lagged U.S. energy producers such as Devon Energy Corp. in shifting rigs from gas fields to higher-profit oil prospects, leaving Chesapeake more vulnerable to slumping gas prices.
"You can be the smartest guys in the room but you may be in the wrong room," McClendon said during a March interview in a restaurant on the company's Oklahoma City campus. "It's not enough to be the smartest guys in the room. Sometimes you have to be hungry, sometimes you have to be lucky, and you have to be open to change."
McClendon's fall from grace began in April after media reports about personal loans he obtained using minority stakes in company-owned wells that he had been allowed to gather for his private portfolio.
Chesapeake stock lost 20 percent of its value that month as scrutiny of McClendon's personal transactions compounded the impact of free-falling prices on a company whose output was more than 80 percent gas.