Aubrey K. McClendon, co-founder, CEO and president of Chesapeake Energy “has agreed to retire from the company on April 1, 2013,” according to a press release issued by the company late Tuesday. It said McClendon would continue to serve as CEO until a successor is appointed.

McClendon’s retirement was by agreement between him and the board of directors, according to Board Chairman Archie W. Dunham. “Over the past 24 years, Aubrey McClendon has created one of the most valuable and innovative companies in the energy industry. Under Aubrey’s strong leadership, Chesapeake has built an unmatched portfolio of natural gas and oil assets in creating one of the world’s leading energy companies. He has been a pioneer in the development of unconventional resources, and he has also been a leader in the effort to make the United States energy independent,” Dunham said.

“However, as the company moves towards more fully developing the value of its outstanding assets, Chesapeake is at an important transition in its history and Aubrey and the Board of Directors have agreed that the time has come for the company to select a new leader. The Board will be working collaboratively with Aubrey to make a smooth transition to Chesapeake’s next Chief Executive Officer.”

Since 2008 Chesapeake’s stock has gone from a price above $70 a share to under $20 after McClendon involuntarily had to sell “substantially all” of his 33 million shares in the company to meet margin loan calls. At the time McClendon, who had been the company’s largest shareholder, blamed the worldwide financial crisis for the precipitate action which sunk the company’s share price to $16.52 (see Daily GPI, Oct. 13, 2008). On Tuesday the stock closed at $18.97/share. However, after the retirement news broke around 5 p.m. eastern Tuesday, Chesapeake’s share price climbed in after-hours trading. As of 6 p.m. eastern it was valued at $21.06/share.

In the latest action last May McClendon lost the title of chairman at the same time it was announced that the Internal Revenue Service and the Securities and Exchange Commission was investigating some of his transactions in the Founder Well Participation Program (FWPP) (see Daily GPI, May 2, 2012). It was a program that he set up which gave him the sole contractual right to receive a 2.5% stake in every well the company has drilled since 1993. Dunham, who had retired as chairman of ConocoPhillips, took over as Chesapeake’s chairman in June.

As natural gas prices and Chesapeake’s revenues tumbled over the last couple years, the company has been forced to sell off large blocks of its holdings in unconventional resource plays. Pension and hedge fund investors have complained of McClendon’s leadership and called for his ouster. In June a Moody’s Investors Service analyst said the company would have to sell at least $7 billion in assets in 2012 to avoid a breach of debt covenants and a credit downgrade (see Daily GPI, June 1, 2012).

Tuesday’s announcement said the Board expects to release the results of its previously announced review of the financing arrangements, and other matters, between McClendon, entities in the FWPP, “and any third party that has had or may have a relationship with the company in any capacity, in its earnings announcement scheduled for release before market open on February 21, 2013. The Board’s extensive review to date has not revealed improper conduct by Mr. McClendon. The Board and Mr. McClendon’s decision to commence a search for a new leader is not related to the Board’s pending review of his financing arrangements and other matters.”

McClendon recognized the value in shale gas early, and through a string of acquisitions, financed in part by joint ventures with foreign firms, amassed a giant reserve holding. NGI first reported on an acquisition by McClendon’s Chesapeake in 1998 when he paid $88 million for properties in British Columbia and the Anadarko Basin (see Daily GPI, Jan. 1, 1998).

When natural gas production, driven by an abundance of shale gas, sent prices plummeting, McClendon missed the move made by many in the industry to shale oil, all the while maintaining that gas prices would rebound.

McClendon’s retirement news comes just two weeks after the sudden announcement that Randy Eresman was stepping down as Encana Corp.’s president and CEO (see Daily GPI, Jan. 15). Eresman, who like McClendon avidly pursued natural gas resources, spent his entire 35-year professional career at Encana and predecessor companies. Eresman agreed to stay on as an adviser until Feb. 28.

The Michigan Department of Natural Resources (DNR) launched an investigation last year into allegations that Chesapeake and Encana executives worked to suppress land prices in Michigan’s natural gas and oil leaseholds (see Daily GPI, June 26, 2012).

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