Dynegy Inc. is expected to name another executive from ChevronTexaco Inc. to its board of directors, as well as another chairman, after interim Chairman Glenn F. Tilton, 54, resigned Monday. Tilton accepted the chairman’s position at another troubled company, United Airlines (UAL), after spending almost all of his professional life in the oil and gas industry.

Tilton, who was named chairman and CEO at Texaco Inc. last year before its merger with Chevron, was named to the Dynegy board of directors in January, and then became interim CEO in May (see Daily GPI, May 29). Otis Winters, the lead director of Dynegy’s board, said Tilton had provided leadership “at a critical time for Dynegy and has been instrumental in helping the board guide Dynegy through a particularly tough period.” Winters added that Tilton was one of three Dynegy board members representing ChevronTexaco, and the election of a new CVX board member and new board chairman would be under consideration very soon.

Tilton, whose resignation took effect immediately, may be jumping from the frying pan into the fire, some analysts believe. Like the energy sector, the airlines industry also has been under pressure. UAL has posted about $3 billion in losses in the past year and a half, and has said it may have to file for Chapter 11 bankruptcy protection later this year if costs cannot be dramatically reduced and a government loan guarantee does not materialize. Following Tilton’s resignation, Dynegy’s stock was falling about 5% in early morning trading Tuesday. It had closed at $2.08 last Friday.

A Dynegy spokesman said that while another ChevronTexaco executive would be named to the board, there was no decision on whether that person or another board member would be named as interim chairman. ChevronTexaco owns a 26.5% stake in Dynegy, which markets all of the major’s North American natural gas. Former Dynegy Chairman and CEO Chuck Watson’s resignation put two people in charge of operations, Tilton and Dan Dienstbier, who is CEO.

“I’ve been privileged these past months to see firsthand the extraordinary efforts of the men and women of Dynegy to pull together and rebuild this company, all in the face of difficult and complex challenges,” said Tilton in a written statement. “Their focus on overcoming these challenges, and on the fundamental work of this company, day in and day out, is what is enabling Dynegy to restore the trust of investors, lenders and business partners.”

He said that Dynegy had already “made substantial progress to enhance liquidity, stabilize the business and address the key issues of concern to the marketplace. In addition to having a solid base of assets and strong business fundamentals, the company is now well prepared to take the additional actions necessary to tap its full potential and demonstrate its ability to move forward again.” Tilton said that Dynegy’s board, COO Steve Bergstrom and the “entire Dynegy team are deservedly proud for their tremendous, collaborative effort.”

Dienstbier said Tilton has provided “valuable counsel” over the past few months to the energy merchant. “Glenn is more than capable of guiding any company through challenging times, and I have no doubt that he will be successful at UAL. He leaves us at a good time: We have achieved notable milestones in our capital and liquidity plans and are fully focused on the future.”

Tilton joined Texaco in 1970 after serving in various marketing, corporate planning and European downstream assignments of increasing responsibility. In 1989, while serving as president of U.S. Refining and Marketing, he was appointed vice president of Texaco. He became chairman of Texaco Ltd. in 1991 and president of Texaco Europe in 1992. In January 1995, he was appointed president of Texaco USA and, later that year, a senior vice president of Texaco. In January 1997, he became president of Texaco’s Global Business Unit.

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