Aubrey McClendon's Plan to Solve Chesapeake Cash Problems Met With Skepticism

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From Bloomberg:

Chesapeake Energy Corp. (CHK) Chief Executive Officer Aubrey McClendon is banking his turnaround of the industry’s biggest debtor on a rebound in natural-gas prices that no Wall Street analysts tracked by Bloomberg expect will happen.
A day after directors said they’ll strip him of the chairman’s role as they investigate potential conflicts of interest in his personal finances, McClendon laid out a plan to shrink a $12.6 billion debt pile, cut costs and remake the second-biggest U.S. gas producer into an oil company. At the core of his plan is a rebound in gas by 2014 to $5 per thousand cubic feet, more than double today’s level.
“There seems to be little acknowledgment by management or the board that the company faces a major financial crisis,” Jon Wolff, an analyst at International Strategy & Investment Group LLC in New York, said in a note to clients. Chesapeake needs a “drastic reduction” in spending and to grow its oil production faster, Wolff wrote.McClendon may not be able to wait two years for the company’s fortunes to improve. Southeastern Asset Management Inc., holder of one of every seven outstanding Chesapeake shares, notified the U.S. Securities and Exchange Commission yesterday that it may initiate talks with management and third parties about taking steps to boost the share price or sell the company outright.

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Click here to read an article from the Wall Street Journal considering why some analysts are saying that buying Chesapeake stock might be a risk worth taking.

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