Chesapeake Energy Corp. disclosed late Friday that CEO Aubrey K. McClendon involuntarily had to sell “substantially all” of his shares in the company in the previous three days to meet margin loan calls. McClendon had held an estimated 33 million shares in the company.

The Oklahoma City-based independent is considered one of the top gas producers in the United States with holdings in the Barnett, Haynesville and Fayetteville shales, as well as the Anadarko, Arkoma, Appalachian, Permian and Delaware basins. It also explores and develops areas in South Texas, along the Texas Gulf Coast.

“I am very disappointed to have been required to sell substantially all of my shares of Chesapeake,” McClendon stated. “These involuntary and unexpected sales were precipitated by the extraordinary circumstances of the worldwide financial crisis. In no way do these sales reflect my view of the company’s financial position or my view of Chesapeake’s future performance potential.”

The CEO noted that he had been Chesapeake’s “largest individual shareholder for the past three years and frequently purchased additional shares of stock on margin as an expression of my complete confidence in the value of the company’s strategy and assets.”

In heavy trading Friday, Chesapeake’s shares closed down 3.15%, or 52 cents, to $16.52/share. The company has sold for as high as $74/share in the past year. Usual trading volume is around 23.2 million; on Friday, 117.1 million shares traded hands.

McClendon said his confidence in the Oklahoma City-based independent “remains undiminished, and I look forward to rebuilding my ownership position in the company in the months and years ahead.”

Chesapeake’s stock is the worst-performing for an oil and gas producer to date this year on the S&P 500, and investors appear concerned about the company’s hedging contracts, which are supposed to protect the company from a drop in gas prices.

Chesapeake and other producers have hedging contracts with financial institutions and other counterparties, which may not be able to pay the agreed-upon prices because of the global financial crisis. Chesapeake also holds knockout swap contracts on more than one-third of its 2009 production. Under the swap contracts, buyers are not obligated to take the gas if prices drop to $6.28/Mcf of the heating and power plant fuel, said JPMorgan Chase & Co. analyst Joseph Allman.

“With natural gas close to $6.60, we think the concern about Chesapeake’s knockout swaps is legitimate,” Allman said in a note to clients. Morgan Stanley is Chesapeake’s biggest counterparty, according to Allman. On Friday Morgan Stanley’s share price fell nearly 40%, and the investment banker’s credit rating was in danger of being cut.

If gas fell to $6/Mcf, Chesapeake would have to sell $3.5 billion of its assets, Allman said. “In our view, getting through 2009 is tough, but Chesapeake has a lot of nonproducing assets it could sell and discretionary spending it could cut.”

Chesapeake spokesman Jeff Mobley said Friday that the company has contracts with more than 20 financial institution counterparties. The company’s hedges would be “knocked out” only if gas prices fell below the specified price on the last trading day of the month. If the hedges were knocked out, it would reduce Chesapeake’s cash flow, but the company still could manage by reducing its spending, he said.

Mobley said Chesapeake was “not obligated to purchase assets next year,” and he said the company could curtail its drilling.

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