In an announcement this morning, Chesapeake Energy it has consulted with concerned shareholders and will replace four members of its board of directors.
Concerned shareholders had expressed concern about the oversight functions of the Chesapeake board in recent weeks. Performance of Chesapeake stock and recent scrutiny of financial practices of CEO Aubrey McClendon had dominated media reports on the company.
Carl Ichan, who recently acquired a 7.6 percent share of the company, requested that due to financial concerns and underperforming stocks he be allowed to appoint two board members, with two other board members to be replaced by another major shareholder.
|Chesapeake will shake up their board of directors|
"We appreciate the Board's willingness to listen to shareholders and to respond appropriately," Icahn said in a statement. "Under Aubrey's leadership, Chesapeake has assembled great assets and I am confident I can help the Company create significant shareholder value from these assets. We enjoyed a very good relationship when I acquired almost 6% of the Company's stock in late 2010 and I look forward to a similarly constructive relationship now."
Icahn will become one of the new independent directors, or he may appoint one.
Icahn heavily criticized the board in a public letter last month.
"To engender any meaningful credibility among shareholders, corporate governance reforms cannot, in our view, be led by directors whose irresponsible actions have brought this company to the edge of the proverbial cliff," Icahn wrote.
Read the rest of the article here.
Another article focusing on Chesapeake comes from The Daily Times in Weirton:
WHEELING - Chesapeake Energy believes every acre of its oil and liquids-rich Utica Shale play is worth $13,000 to $17,000, amounts that are significantly greater than most drillers are paying mineral owners to lease local land.
Focusing on developing this acreage and attracting new investors, Oklahoma City-based Chesapeake is trying to move beyond the financial troubles caused by Chairman and Chief Executive Officer Aubrey McClendon's personal dealings in the company's operations throughout Northern West Virginia.
Chesapeake's stock price closed at $16.90 Thursday on the New York Stock Exchange, up from $14.65 about two weeks ago.
The company plans to sell more than 500,000 acres of leases in Colorado and Wyoming, while reducing director compensation to help eliminate debt, and pay back the $4 billion loan the company received from Goldman Sachs.
Even by taking these steps, leaders of the company, which leads the Upper Ohio Valley's Marcellus and Utica shale boom, believe they will still have about $9.5 billion worth of debt on the books by the end of this year.
Read the rest of that article here.
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