The Tulsa Forum by TulsaNow

Chesapeake Energy Corp. plans to sell $4 billion to $5.5 billion in gas fields and other assets next year to help cover a cash shortfall stemming from plunging natural gas prices.

Oklahoma City-based Chesapeake, which announced plans last week to sell as much as $12 billion in assets this year, needs to raise as much as $17.5 billion by the end of 2013 to avoid outspending its cash flow, the company said Wednesday in a presentation on its website.

Stung by a glut of the heating fuel that drove prices to a 10-year low, Chesapeake last month pledged to cut gas-drilling expenditures to the lowest since 2005. As a result, the company on Wednesday lowered its estimate for 2012 production growth to 9 percent from a target of 15 percent announced in November.

About 1 billion cubic feet of Chesapeake's daily output will remain suspended at least through October, CEO Aubrey McClendon said during a conference call with analysts and investors.

McClendon said the production curtailments the company enacted in the Haynesville and Barnett shale formations were a "sacrifice" that will benefit the rest of the gas industry.

Shares of Chesapeake, the nation's second-largest natural gas producer, fell 59 cents, or 2.4 percent, to close at $24.03 on the New York Stock Exchange. The stock has lost 25 percent of its value in the past year.

For 2013, the company said total production will rise 15 percent, an increase from the November forecast of 10 percent growth.

Chesapeake has been moving drilling rigs from fields that contain mostly gas to formations soaked with more crude oil and so-called gas liquids such as propane, which command higher prices than dry gas. The company estimates its oil and liquids production will reach 203,000 barrels to 214,000 barrels a day next year, and 250,000 barrels a day in 2015.

Exploratory drilling in the Williston Basin in the northern U.S. Great Plains, an area that includes the Bakken shale, so far have been disappointing, McClendon said. The company is shifting rigs to the western edge of its acreage to continue the search, he said.

McClendon said the slump in gas prices is "very unlikely" to persist through 2014 because of the "rapidly changing" relationship of supply and demand. Chesapeake's cash flow will break even with spending by 2014, according to the website presentation.

Exxon Mobil Corp., based in Irving, Texas, is the largest U.S. gas producer, according to the Natural Gas Supply Association, a Washington, D.C.-based industry group whose members produce about one-third of the nation's gas.


Original Print Headline: Asset sales help Chesapeake cover shortfall

By JOE CARROLL Bloomberg News

Copyright 2012 World Publishing Co. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Read more from this Tulsa World article at http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20120223_49_E4_ULNSba268373

Don't look now, but CHK needs to raise $17.5 billion by the end of 2013.  Over-extended while gas prices have been low for the last few years?  Looks like they've been living off the savings account.

They're raising crapital from furinurs!

Saw this coming two years ago....Aubrey's got some issues.....debt issues. Banks ran him off....

Price of Nat Gas has bottomed but don't look for any rapid appreciation.

Thin just ask Cramer who was their biggest cheerleader until last fall......

Side note, I hope OKC has a university that is willing to take over the campus because that is about all it will be good for if and when Chesapeake moves out.

Every year they come out with those best places to work lists and Chesapeake is right up there, I laugh.

Interviewed for a job there early last year and declined a second interview. I was shocked at the average age of workers there. One was actually younger than I was (I was 28). The gentleman 3 or four levels up from what I would have been was about 35. Don't get me wrong, the pay and benefits are out of this world. But they have to be or no one would work there. People go for the money and experience and get out when they can. It is indicative of the whole culture their. They care little about the future. From the corporate office to the field. How many environmental infractions have they had over the last few years. They play fast and loose in every aspect of the company. It was only a matter of time before they started to feel the pain.

This is one side effect of drilling fence row to fence row in this country.  Too much supply leads to lower prices.

Gee, ya think? I seem to remember someone here saying that wouldn't happen.

What is the average age? I am just as sensitive to age discrimination towards youth as I am towards older. Whether the guy is 35 or 65 as long as he is capable to do the job what is the problem with that?

You would expect the average age to increase as you travel up the ladder though. If not you simply have a company without much wisdom. Maybe that is what you're getting at?

I don't know whether its age discrimination but it sure is age ignorance. Did he say exactly why that age had to decrease? Health cost exposure?

Frankly, it seems incomprehensible that a top notch exec would say something like that publicly. Unless it Romney or something.

It's all Obamacare's fault!  ;D

Didn't I hear Devon was following suit as well.

Lot of great class A space in OKc might be available soon. Also, arena naming rights.

That makes me very happy.

How would that be good for Oklahoma?

Unless blind hatred of Oklahoma City has fogged your view.

Who will "takeover" his interest in The Thunder?

*cough* Kaiser *cough*

*cough* Kaiser *cough*

Why not?

I would be absolutely shocked if Kaiser took over McClendon's stake in the Thunder.

Now is a good time to add Chesapeake to my watch list - $12 a share and I am getting in.
And if it goes below, keep on buying.

Just one good cold winter away from scoring big time....

Problem is CHK isn’t DTAG.  There’s a lot of unknowns about CHK right now and I think we are just hearing about a few of the fleas, I suspect there are a bunch more.  Are they seriously circling the drain a la Enron and SEM, or in need of a management overhaul and some help with NG prices?

I agree with TTC- don’t try to catch a falling knife.

Agreed....more likely KF would end up with acreage and wells close to their own educated fields....

But Conan, I'd bet he has to eventually divest his Thunder interest. Maybe not his baseline ducats.

AM needs to join in with Boone's attack on Koch. Time has come for the wagons to circle the Wichita mob. They're self serving basterds who need to be isolated. All this time I thought Boone was a wingnut....

T. Boone Pickens: Biggest Deterrent To U.S. Energy Plan Is Koch Industries

http://finance.yahoo.com/blogs/daily-ticker/t-boone-pickens-biggest-deterrent-u-energy-plan-125553999.html

I hope he's right about $4...I hear $1.20...Heir, be patient....don't try catching a falling knife.

The hedge fund scandal is a much bigger deal than the well participation plan. The potential for conflict of interests is mind numbing.

http://www.reuters.com/article/2012/05/02/us-chesapeake-mcclendon-hedge-idUSBRE8410GG20120502

Here's the article on it. I don't see how a lot of people don't go to jail over this. It's simply amazing what McClendon has been up to,

Can be dicey.... the "flea" in this case seems to be the billion dollars he borrowed from the company to pay for his well interest.  I'm sure his plan is to let the company end up paying it back for him through "appreciation".  (Not too different from what Franklin Electric - Bill Lawson - did to Oil Dynamics, here in town - on a much smaller scale.)

Chesapeake is a hedge fund...people think it's an energy company....that's why I liken this to TK....

And you wonder why energy prices don't seem to follow demand?

If you are in any commodities business today you've been lured by the siren song of hedging.  Lumber?  Coffee?  Steel?  Oil?  Natural gas?  You name it, it can be hedged.

The fact that natural gas is around $2 demonstrates supply and demand still has a lot to do with price rather than just those 'ol sinsiter "speculators" "manipulators."

The fact that natural gas is around $2 demonstrates supply and demand still has a lot to do with price rather than just those 'ol sinsiter "speculators."

UH OH spaghetteos!
http://news.yahoo.com/chesapeake-energy-confirms-u-sec-probe-202738723--finance.html

The SEC sux....they probably knew about this like they knew the coming housing collapse and bankruptcy of Lehman.

Nah, the SEC is a shining example of a perfectly working government bureaucracy er agency.

McClendon makes drunken sailors on payday look thrifty.

What do you have against drunken sailors?  They are typically without cars so driving drunk does not apply.

In other news, I am The only person in the state (I think) whose wild distaste for okc makes me want to thunders ownership to collapse and have them move back to Seattle.  I would help them pack.

In other news, I am The only person in the state (I think) whose wild distaste for okc makes me want to thunders ownership to collapse and have them move back to Seattle.  I would help them pack.

But the Thunder have been really good for Oklahoma. Their games are nationally broadcast and millions of kids now know we exist.

In other news, I am The only person in the state (I think) whose wild distaste for okc makes me want to thunders ownership to collapse and have them move back to Seattle.  I would help them pack.

Okay, drunken boilermakers.  Or drunken liberals with someone else’s paycheck.  They are far more notorious than sailors anyhow.

All the thunder have done for tulsa is get people into bars to watch basketball and make OKC people seem to think that they live in a real city and that Tulsa is a backwatter shithole. (living in stillwater you encounter these people all the time)  Beyond the fact that basketball is painfully boring, I want the smug looks smacked off their faces by realizing that they couldn't afford it.

People seem to keep appealing to the fact that it is good for the state.  Is that fact that Portland has a pro team good for eugene?

I hope the team moves and Chesapeake fails.

That's just bitter and mean spirited.

All the thunder have done for tulsa is get people into bars to watch basketball and make OKC people seem to think that they live in a real city and that Tulsa is a backwatter shithole. (living in stillwater you encounter these people all the time)  Beyond the fact that basketball is painfully boring, I want the smug looks smacked off their faces by realizing that they couldn't afford it.

People seem to keep appealing to the fact that it is good for the state.  Is that fact that Portland has a pro team good for eugene?

I hope the team moves and Chesapeake fails.

You should hear the way that people i know in OKC kids talk about Tulsans.

Ok Guys.  Experiment time!  Go to bricktown and mention Tulsa.  I dare you.  You will be ridiculed.  OKC thinks that this teams makes them a major american city and that Tulsa is their joke of a little sister.  The thunder are OKC's attempt at consolidation of power.

Just take the bait kids.  Cheer for them.  See if they approve the OKpop museum.  (cricket, cricket)

Tell you  what.  If the state legislature approves the bond issue for the pop museum, I'll cheer for the thunder.  If not, F5's throughout  the 'city'.  Death and a pox upon all and in reverse order, too.  

yep.  I was in OKC enough to know how the attitude in Bricktown is for those of us who come from Tulsa.  I stopped after about 2005 going to that shitehole.

NBA team or not, I couldn't care less about OKC.  I lived in Houston for three years.  They had the big three in sports while I was there.  It was no picnic there either.  But Houston's metro is about 6 million.  OKC...not even close to that.

Some of the more level headed ones are starting to get jealous. Bricktown is basically Quail Springs South with a couple of more adult themed joints thrown in for good measure. Midtown OKC is more like Downtown Tulsa. Natural, not forced. Original, unique. Downtown Tulsa has glitz, grit, charm, beauty and creativity all in a square mile. OKC has an office park and a downtown mall. OKC has nothing that we should be envious of, except maybe a statue of a giant falace (Devon Tower).

Ok Guys.  Experiment time!  Go to bricktown and mention Tulsa.  I dare you.  You will be ridiculed.  OKC thinks that this teams makes them a major american city and that Tulsa is their joke of a little sister.  The thunder are OKC's attempt at consolidation of power.

Just take the bait kids.  Cheer for them.  See if they approve the OKpop museum.  (cricket, cricket)

Tell you  what.  If the state legislature approves the bond issue for the pop museum, I'll cheer for the thunder.  If not, F5's throughout  the 'city'.  Death and a pox upon all and in reverse order, too. 

You guys dont' seem to tolerate competition. Truth is that OKC is bigger, more powerful and better situated to grow than we are. I had a big brother who was similarly described. I didn't hate him for it, I used his power, his mistakes, his location within the family to get what I needed. Soon, we were on a level playing field. That time will come for Tulsa.

Kinda' looks like sour grapes, penis envy and whiney jealousy all blended into a psycho shake. It doesn't serve us well. I love the Thunder, I tolerate a lot of OKC and enjoy the rest.

There is a difference in not liking someone or something and spewing hate.  Especially when that hate is based on unfounded or ludicrous perception.

I spent enough time in OKC when I was married to qualify my 'ludicrous perception'.  Trust me, I don't 'spew hate'.  I absolutely hate OKC with about every fiber of my being.  I have my reasons for it and for you to try and analyze it...wow.  Walk a mile in my shoes.

If people don't like to hear me say it, then don't read it or don't listen.

And then there are some of us who don't.  We all have opinions and should be entitled to them without being denigrated by peers.  I sure don't denigrate you for liking OKC.  I just point out that I don't.

I've got friends in OKC I enjoy visiting.  I tend to have a good time there.

I wish Tulsa could get bonds and public funds as easily as OKC seems to.  That's from where my jealousy stems.

Oh, and free highways in and out of the city would be cool.

Their highways are free because they are major interstates.

Jealousy is a bad thing that fades with age...

Hate's a mean people thingy....

You don't have to like them. You don't have to visit them. We are family though and we wouldn't want to leave a perception that we are the snooty, cosmo little brother. Its just a matter of decorum. Praise publicly, criticise privately.

Should have been two states.

Their highways are free because they are major interstates.

Jealousy is a bad thing that fades with age...

Hate's a mean people thingy....

I said that long ago.

You're not a very good example of someone to preach.

Future cities that are small and efficient will be more livable than the megalopolises.

You want Chickasha & Duncan & Waurika?

Multiple people shot downtown after Oklahoma City Thunder game


http://www.tulsaworld.com/news/article.aspx?subjectid=12&articleid=20120522_12_0_Aesihe260188

Open carry's a real deterrent. And OKsh!tty may not deserve the Thunder in the eyes of the World and Nation.

Multiple people shot downtown after Oklahoma City Thunder game


http://www.tulsaworld.com/news/article.aspx?subjectid=12&articleid=20120522_12_0_Aesihe260188

Open carry's a real deterrent. And OKsh!tty may not deserve the Thunder in the eyes of the World and Nation.

Considering the shooting doesn’t appear to be related to the Thunder win, I don’t see how the world and nation would think OKC is undeserving.

Open carry isn’t in effect until Nov. 1 so not sure what point you are trying to make there.  Are you going to go all cowboy on us after Nov. 1?  8)

The Oligarchy's Rule of Law: From Russia to Oklahoma

http://truth-out.org/news/item/9409-the-oligarchys-rule-of-law-from-russian-to-oklahoma

At the end of the 1990s, after the total collapse of the mass-privatization experiment in Boris Yeltin's Russia, some of the more earnest free-market proselytizers tried making sense of it all. The unprecedented collapse of Russia's economy and its capital markets, the wholesale looting, the quiet extermination of millions of Russians from the shock and destitution (Russian male life expectancy plummeted from 68 years to 56 years)—the terrible consequences of imposing radical libertarian free-market ideas on an alien culture—turned out worse than any worst-case-scenario imagined by the free-market true-believers.
Of all the disastrous results of that experiment, what troubled many Western free-market true-believers most wasn't so much the mass poverty and population collapse, but rather, the way things turned out so badly in Russia's newly-privatized companies and industries. That was the one thing that was supposed to go right. According to the operative theory—developed by the founding fathers of libertarianism/neoliberalism, Friedrich von Hayek, Ludwig von Mises, Milton Friedman and the rest—a privately-owned company will always outperform a state-run company because private ownership and the profit-motive incentivize the owners to make their companies stronger, more efficient, more competitive, and so on. The theory promises that everyone benefits except for the bad old state and the lazy.
That was the dominant libertarian theory framing the whole "shock doctrine" privatization experiment in Russia and elsewhere. In reality, as everyone was forced to admit by 1999, Russia's privatized companies were stripped and plundered as fast as their new private owners could loot them, leaving millions of workers without salaries, and most of Russia's industry in far worse shape than the Communists left it.
Most of the free-market proselytizers—ranging from Clinton neoliberal Michael McFaul (currently Obama's ambassador to Moscow) to libertarian Pinochet fanboy Andrei Illarionov (currently with the Cato Institute)– blamed everything but free-market experiments for Russia's collapse.
But some of the more earnest believers whose libertarian faith was shaken by what happened to Corporate Russia needed something more sophisticated than a crude historical whitewash.
Lucky for them, Milton Friedman provided the answer to a Cato Institute interviewer: Russia lacked "rule of law"—another neoliberal/libertarian catchphrase that went mainstream in the late 80s. Without "rule of law," Friedman and the rest of the free-market faithful argued, privatization was bound to fail. Here's Friedman's answer in the Cato Institute's 2002 Economic Freedom of the World Report:
CATO: If we reflect upon the fall of communism and the transition from the centrally planned economy to a market economy, what have we learned in the last decade of the importance of economic freedom and other institutions that may be necessary to support economic freedom?
MILTON FRIEDMAN: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: "What do these ex-communist states have to do in order to become market economies?" And I used to say: "You can describe that in three words: privatize, privatize, privatize." But, I was wrong. That wasn't enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government's centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don't have the rule of law. What does it mean to privatize if you do not have security of property, if you can't use your property as you want to?
Others expanded on Friedman's rationalization, arguing that without this "rule of law" to protect their private property, the new private owners of Russia's industries were incentivized to plunder their companies as quickly as possible for fear that the state would steal their companies back. Of course, all this rationalizing was undermined by fact that Russia's oligarchs stole their companies in the first place, and thieves do tend to steal what they've stolen. But never mind—the libertarian ideology was salvaged, as Russia's privatization experiment was declared "not a real free-market" without Friedrich Hayek's "rule of law" in place.
The reason I'm bringing this up now is because over the past month, one of America's most rapacious oligarchs, Aubrey McClendon, was exposed by Reuters for plundering Chesapeake Energy, the second-largest natural gas producer in the country after Exxon-Mobil. McClendon, co-founder, CEO and until a few weeks ago Chairman of Chesapeake, was discovered running a hedge fund inside of Chesapeake, personally profiting on the side from large trading positions that his public company Chesapeake took in the gas and oil markets.
Reuters also discovered that McClendon took small personal stakes in natural gas wells bought by Chesapeake, then borrowed against the wells' reserves from the same banks that Chesapeake borrowed from—basically, the banks kicked back sweet lending deals to McClendon on the side as McClendon arranged less-than-sweet loans to his publicly-owned company, Chesapeake, kicking profits from Chesapeake's shareholders and employees' pockets into the banks and into Aubrey's accounts.
The loser in all this, as always: Employees, retirees, and shareholders. As Reuters reported, Chespeake is one of a small handful of companies whose employee 401k retirement packages consist mostly of Chesapeake stock, and the company requires employees to hold on to their stock for the maximum amount of time allowed by law:
Thousands of Chesapeake workers have retirement portfolios that are heavily invested in Chesapeake stock, which has declined sharply following revelations about Chief Executive Aubrey K. McClendon's business dealings.
But while retail and institutional investors have sold the stock, employees don't always have that option.
It's not the first time McClendon has been caught plundering Chesapeake at the expense of shareholders, pension fund investors and employees: In 2008, McClendon bet and lost about $2 billion worth of Chesapeake Energy stock he owned—94% of Aubrey's personal stake in Chesapeake– on a margin call when natural gas prices collapsed. Aubrey bet that natural gas prices would continue soaring, you see.
But like his peers in the oligarchy class, Aubrey's loss became everyone but Aubrey's loss: He was awarded a "CEO bailout" by his board of directors, who honored Aubrey with a $75 million "bonus" to bring his total pay in 2008 to $112 million, making Aubrey McClendon the highest-paid CEO in Corporate America that year. Even though Chesapeake's earnings dropped in half, and its stock fell 60%, wiping out up to $33 billion in shareholder wealth.
Now, we're learning, Aubrey was profiting in other ways off of Chesapeake that same year.
There is so much more to hate about Aubrey McClendon than this—the millions McClendon poured into Gary Bauer's gay-bashing outfit "Americans United To Preserve Marriage" and the Swift Boat Veterans for Truth, the role McClendon and his Whirlpool heiress wife played in stealing waterfront land from Benton Harbor, an African-American slum and the poorest city in Michigan, in order to expand an exclusive golf course country club for residents of St. Josephs, where McClendon owns several plots of land. McClendon's wife, Katie, is from St. Joseph's; so is Katie's cousin, Fred Upton, the Republican Congressman from St. Joseph's. Aubrey and his wife are what pass for royalty (sans noblesse oblige) these days: Katie from the Whirpool fortune, Aubrey an heir to the Kerr-McGee fortune. (If you've seen the movie Silkwood, you might remember Kerr-McGee as the company that iced the labor union activist played by Meryl Streep.)
This is just one of many stories about how publicly-traded companies have been and can be transformed into elaborate schemes to loot and steal from the public and enrich a tiny handful of oligarchs. We saw this in the 1980s when Reagan deregulated the Savings & Loans, which were quickly transformed into a means of looting, fraud and plunder; we saw it in the 2000s, after the de-regulation of the financial sector.
The problem goes much deeper than Milton Friedman's "rule of law" fetish. "Rule of law" is just another red herring diversion to provide cover for continued oligarchy plunder, failure and barbarism. The problem is systemic, and more importantly, ideological. We still operate under the same neoliberal/libertarian major premises we inherited from the Hayek-Mises-Friedman era, an ideology that considers notions like "the public good" to be quaint delusions at best—as opposed to today's still-dominant, still-standing foundational ideology, which says that freedom equals the ruthless pursuit of individual self-interest, the unlimited acquisition of private property and wealth, framed within a cold, dystopian "rule of law."
That is where the problem starts. That is why, every week, I could tell another story about another Aubrey McClendon or Dick Parsons, and it will never end until the ideology that enables them is buried.

Chesapeake's fall threatens to spark a real estate fire sale

By JOHN HELYAR and DAVID WETHE Bloomberg News
Published: 7/12/2012  1:03 PM
Last Modified: 7/12/2012  1:03 PM

Chesapeake Energy Corp., whose $805 million investment in Oklahoma City’s land and buildings has helped reduce commercial real estate vacancies, threatens to collapse the market as it faces a cash squeeze and seeks to sell assets.

The second-largest U.S. natural-gas producer has spent $448.7 million to build a 120-acre (50-hectare) headquarters campus in the northwestern part of the city and an additional $356.7 million to develop three nearby retail centers and buy office buildings and more land, according to Peter Brzycki, a former Oklahoma City real estate broker who tracks the company’s properties.

While a sell-off of its commercial property may please the company’s investors, who have seen share prices decline as Chesapeake struggles to fill a cash-flow shortfall, a quick divestiture would also depress Oklahoma City’s office market, local real estate professionals said.

“If something were to happen to Chesapeake, the whole northwestern market would collapse,” said Don Karchmer, a local developer and investor who’s been involved with some of the company’s real estate activities. “The whole community has a fear of what could happen. It would be a huge hurt.”

Chesapeake, the second-largest private employer in Oklahoma City, is seeking to sell as much as $14 billion in assets in 2012 to raise cash.

The company fell 2.6 percent to $18.59 at 11:25 a.m. in New York. The shares have declined 17 percent this year as gas prices fell and after reports that Chief Executive Officer Aubrey McClendon was getting personal loans from companies that were also financing Chesapeake.
No Sale

The Oklahoma City properties aren’t part of Chesapeake’s planned divestiture program, said Michael Kehs, a company spokesman.

“We use our real estate every day, so it’s not for sale,” he said. Kehs said Brzycki’s tally of spending on Chesapeake’s campus was low and the figure for other real-estate development was high. He declined to comment on the total investment number.

Investors, including billionaire Carl Icahn, have called for the company to get rid of assets that aren’t central to its energy production business.

“You’ve got a cash crunch, and you’re not a real estate developer,” said David Dreman, chairman of Dreman Value Management Inc. in Jersey City, New Jersey, which controls about 1 million Chesapeake shares. “If I had a cash crunch and I had really good wells and very promising property, I don’t think I’d be in the restaurant business.”
Leading Recovery

Chesapeake’s real estate holdings include shopping centers and land on which a restaurant co-owned by McClendon operates.

In recent years, Chesapeake has helped to cushion Oklahoma City from the nation’s recession and tepid recovery. The city’s 4.5 percent unemployment rate was the lowest of any metropolitan area with a population over 1 million, according to a May survey by the U.S. Bureau of Labor Statistics. Chesapeake had 5,000 local employees at the end of 2011, the city’s second-largest private employer after Integris Health.

The company has led a recovery of vacancy rates for top- tier office space in the city to “near pre-recession levels,” according to a report by broker Cushman & Wakefield Inc. The market’s 11.2 percent vacancy rate during the first three months of the year represents a 1.6 percentage point decline from a year earlier, it said. Less inventory has increased average Class A office rent to $21 a square foot.
Kerr-McGee Lessons

The $67 million Chesapeake spent to acquire three office buildings in the latter half of last year accounted for 75 percent of Oklahoma City’s total transactions in that real estate segment.

Now the company faces an estimated cash shortfall of $18.6 billion by the end of 2013, according to Alembic Global Advisors. Chesapeake has lost about $7 billion in market value in the past year amid falling energy prices and shareholder unrest about McClendon’s personal stakes -- and related debts -- in company wells. The board last month replaced McClendon as chairman and named four new directors.

Larkin Warner, a retired Oklahoma State University economics professor who lives near Chesapeake’s campus, recalls the departure of Kerr-McGee Corp., the Oklahoma energy company co-founded by McClendon’s great-uncle Robert Kerr that was bought by Houston-based Anadarko Petroleum Corp. in 2006.

“The day you begin to think the last few years are going to go on forever, that’s when you’re in trouble,” said Warner. For Kerr-McGee, “what happened was like the smile on the Cheshire Cat. It just gradually shrunk.”
Assessed Values

The company, which has leased 16 million acres of land nationally for drilling, has also been aggressive in its back yard, accumulating 3 million square feet of office space and paying top dollar for properties.

Chesapeake “routinely paid two to five times the current assessed value for virtually everything they acquired, and then added substantial construction costs on top of that,” said Brzycki, who has tracked 445 Chesapeake real estate purchases since 2005 using county and municipal records and who posts his findings on an okctalk.com forum.

Since 2005, the company has spent $152 million to acquire and upgrade office buildings away from its campus. Those 12 properties’ assessed value is now $106.2 million, according to municipal and county records. Chesapeake also put $152 million into development plans for three retail complexes, which now are 27 percent vacant and have an assessed value of $50.9 million.
Attracting Talent

While Oklahoma City commercial building valuations are based partly on comparable properties’ recent sales, according to the county assessor’s website, their assessed value doesn’t necessarily reflect market value.

Kehs said the main purpose of Chesapeake’s campus and adjacent retail development “is to create a work environment that is able to help us attract the best talent.” He declined to discuss the company’s real estate investment performance and said its office costs are lower than other large employers.

Chesapeake bought three tracts of land just south of its headquarters for $1.2 million in 2004. Within a year, it sold the parcels in two transactions for a total of $865,000, a 28 percent loss. The sale in part was in the form of a swap to add land to its campus.

Chesapeake spent $38.2 million in 2011 to buy an office building called Caliber Center, which had sold for $20.1 million four years earlier. The company’s $7 million purchase of an office building called Possum Creek in 2010 was two-and-a-half times what the property fetched five years earlier.
Nichols Hills

McClendon, who began his career as a land man buying up drilling rights, has been closely involved in Chesapeake’s real estate activities. He’s personally contacted owners of properties of interest to Chesapeake and sketched out plans to redevelop Nichols Hills Plaza on a paper napkin while lunching with then-tenant Robert Pemberton, owner of the Crescent Market.

That grocery store’s departure is one reason this effort hasn’t gone well with some residents and officials of Nichols Hills, an upscale suburb across the street from Chesapeake’s campus where McClendon and his wife and other prominent families reside.

After spending $66.5 million to purchase a variety of properties there, Chesapeake’s plans have been blocked by town officials concerned that a makeover of the retail center will cause shops to close for an extended period. The community of Nichols Hills counts on sales tax receipts from merchants for the majority of municipal revenue.
Whole Foods

The company also has met opposition from Nichols Hills Plaza patrons, some of whom staged a rally last October. The patrons were protesting the demise of two longstanding businesses, including Crescent Market. Pemberton, who said his family-owned business dates back to the Oklahoma land run in 1889, couldn’t compete with the new Whole Foods Market Inc. store in a Chesapeake-owned shopping center.

“Aubrey saw himself creating a new kind of market that Oklahoma City is ready for and there’s some logic to that, but it hasn’t worked out that way,” said Karchmer, the real estate developer who considers himself an admirer of McClendon.

For now, Chesapeake continues to expand its headquarters campus. Four construction tower cranes overlook eight new buildings and earthmoving equipment lays groundwork for more.

A 40-foot (12-meter) pile of dirt towers over the back yard of Charlie Maupin, a 63-year-old landscaper. Chesapeake has bought up scores of homes to expand its campus, and his could be next. The house, built with his hands, once looked out on trees. It now faces a clay-colored retention pond.

The landscaper said he’s gotten occasional calls from Chesapeake’s CEO asking if he’s ready to move.

Maupin expects to be compensated fairly by Chesapeake when he does move, and he thinks McClendon will turnaround the company. “He’s going to pull rabbits out of his hat for the next 10 years.”


Read more from this Tulsa World article at http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20120712_49_0_Chesap666526

The cull has begun. Over the past month, 225 contracted landmen were cut from Chesapeake jobs, said one Ohio-based landman, who, like most in the close-knit industry, would only speak off the record.

"Chesapeake's activity level in the Appalachian region is minimal now. It has devastated the (landman) industry," the source said. "The Chesapeake debacle is one thing, but the rest of the industry shortfall is because a lot of the projects are intertwined with Chesapeake," he added.

Chesapeake Energy posted a $2.01 billion loss in the third quarter. The Oklahoma City natural gas giant is struggling with low natural gas prices, growing debt and “weak cash flow,” the WSJ reports.

Feb. 26--Chesapeake Energy Corp. on Monday took another step toward closing a multibillion dollar funding gap.

Chesapeake announced a $1.02 billion joint venture with Sinopec International Petroleum Exploration and Production Corp. for a stake in its acreage in northern Oklahoma's Mississippi Lime play.

Chesapeake will get the bulk of the money in cash when the deal closes.

Oppenheimer analyst Fadel Gheit said the deal is not structured like a typical joint venture, which usually includes less up-front cash and more money for future drilling costs, because of Chesapeake's budget woes.

"They need the cash today and not tomorrow," Gheit said. "To them, obviously time is critical."

Sinopec will buy an interest in half of Chesapeake's 850,000 net acres in the oil-rich Mississippi Lime, then share future exploration and development costs in the play.

"We are excited to announce the execution of our Mississippi Lime joint venture with Sinopec, which moves us further along in achieving our asset sales goals and secures an excellent partner to share the capital costs required to actively develop this very large, liquids-rich resource play," said Steven C. Dixon, Chesapeake's chief operating officer.

Chesapeake's Mississippi Lime acreage produced an average of 34,000 barrels of oil equivalent a day during the fourth quarter. The acreage has proved reserves of 140 million barrels of oil equivalent.

Chesapeake's stock slipped nearly 7 percent Monday, dipping $1.39 to $19.11, a performance Gheit said may have been indicative of expectations the company would get more money for its Mississippi Lime acreage.

Sinopec is no stranger to the area, having struck a $2.5 billion deal with Devon Energy Corp. in January 2012 that included acreage in the Mississippi Lime and four other resource plays.

Gheit said such deals allow Chinese oil companies to learn techniques needed to develop that country's abundant resources.

"I call it legalized industrial espionage," he said.

Chesapeake previously has agreed to two development deals with CNOOC International Ltd., a subsidiary of one of China's largest independent oil companies.

CNOOC paid nearly $1.8 billion for a stake in Chesapeake's operations in the Eagle Ford Shale in south Texas and the Niobrara Shale in northeast Colorado and southeast Wyoming. The Eagle Ford deal was announced in January 2011, while the Niobrara deal was announced in October 2010.

Chesapeake has been working since last year to sell assets to offset a looming budget shortfall.

The company sold more than $11 billion worth of assets to avert a cash crunch last year.

Several days before Monday's deal was announced, Chesapeake Chief Financial Officer Nick Dell'Osso said the company plans to sell $5 billion to $7 billion in assets this year.

Chesapeake also intends to sell acreage in south Texas' Eagle Ford Shale and areas outside its core holdings.

Feb. 26--Chesapeake Energy Corp. on Monday took another step toward closing a multibillion dollar funding gap.

Chesapeake announced a $1.02 billion joint venture with Sinopec International Petroleum Exploration and Production Corp. for a stake in its acreage in northern Oklahoma's Mississippi Lime play.

Chesapeake will get the bulk of the money in cash when the deal closes.

Oppenheimer analyst Fadel Gheit said the deal is not structured like a typical joint venture, which usually includes less up-front cash and more money for future drilling costs, because of Chesapeake's budget woes.

"They need the cash today and not tomorrow," Gheit said. "To them, obviously time is critical."

Sinopec will buy an interest in half of Chesapeake's 850,000 net acres in the oil-rich Mississippi Lime, then share future exploration and development costs in the play.

"We are excited to announce the execution of our Mississippi Lime joint venture with Sinopec, which moves us further along in achieving our asset sales goals and secures an excellent partner to share the capital costs required to actively develop this very large, liquids-rich resource play," said Steven C. Dixon, Chesapeake's chief operating officer.

Chesapeake's Mississippi Lime acreage produced an average of 34,000 barrels of oil equivalent a day during the fourth quarter. The acreage has proved reserves of 140 million barrels of oil equivalent.

Chesapeake's stock slipped nearly 7 percent Monday, dipping $1.39 to $19.11, a performance Gheit said may have been indicative of expectations the company would get more money for its Mississippi Lime acreage.

Sinopec is no stranger to the area, having struck a $2.5 billion deal with Devon Energy Corp. in January 2012 that included acreage in the Mississippi Lime and four other resource plays.

Gheit said such deals allow Chinese oil companies to learn techniques needed to develop that country's abundant resources.

"I call it legalized industrial espionage," he said.

Chesapeake previously has agreed to two development deals with CNOOC International Ltd., a subsidiary of one of China's largest independent oil companies.

CNOOC paid nearly $1.8 billion for a stake in Chesapeake's operations in the Eagle Ford Shale in south Texas and the Niobrara Shale in northeast Colorado and southeast Wyoming. The Eagle Ford deal was announced in January 2011, while the Niobrara deal was announced in October 2010.

Chesapeake has been working since last year to sell assets to offset a looming budget shortfall.

The company sold more than $11 billion worth of assets to avert a cash crunch last year.

Several days before Monday's deal was announced, Chesapeake Chief Financial Officer Nick Dell'Osso said the company plans to sell $5 billion to $7 billion in assets this year.

Chesapeake also intends to sell acreage in south Texas' Eagle Ford Shale and areas outside its core holdings.

OKLAHOMA CITY - Chesapeake Energy Corp. spent more than $170 million buying up office properties outside of its core campus over the past several years, but its spending spree appears to have run out of gas after company founder and CEO Aubrey McClendon announced his impending departure earlier this year.

Local real estate market observers are keeping a watchful eye on the natural gas company to see what it will do with the vast amount of office space it holds.

A recent report released by the real estate firm Grubb & Ellis/Levy Beffort, estimates Chesapeake controls about 7 percent of the city's office market.

Although Chesapeake's appetite for office space has been insatiable in recent years, the company has slowed the pace of its acquisitions and has even begun to unload some of its real estate assets at a loss.


Read more from this Tulsa World article at http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20130318_49_0_OKLAHO332601

If you work for Chesapeake Energy, it may be time to polish up your LinkedIn profile. We have obtained through the Ogle Mole Network a Chesapeake email that suggests the company could layoff 500 employees or more from its OKC campus within the next 90 days. The email was sent to the personal email accounts of several laid off employees in order to comply with the federal Worker Adjustment and Retraining Notification Act (“WARN”). According to the Department of Labor, WARN “protects employees, their families, and communities by requiring most employers with 100 or more employees to provide 60-day advance notification of plant closings and mass layoffs of employees.”

OKLAHOMA CITY (AP) -- Chesapeake Energy Corp. is laying off 800 workers across the company, including 640 at its home base of Oklahoma City.
The company says the Tuesday layoff announcement is necessary to keep the oil and natural gas specialist competitive.
Chesapeake CEO Doug Lawler told The Oklahoman (http://is.gd/h6HZS9 ) that he's working to keep the company vibrant for "decades to come"
About 1,200 people have left jobs with Chesapeake since the start of 2013.
Lawler says Chesapeake has spent the last several months examining all aspects of its business. He says that process is now over and the company will continue with exploration and production.

Chesapeake Energy Corp. lays off 800 company-wide, 640 in Oklahoma City

http://www.kjrh.com/dpp/money/business_news/chesapeake-energy-corp-lays-off-800-company-wide-640-in-oklahoma-city#ixzz2hANFmeSY (http://www.kjrh.com/dpp/money/business_news/chesapeake-energy-corp-lays-off-800-company-wide-640-in-oklahoma-city#ixzz2hANFmeSY)

Yeah, they have a developer I want.  Fortunately for him and unfortunately for us, they are keeping him. . .at least for the time being.