Energy companies’ share prices were on the rebound Monday, a welcome turn for the sector, after ending last week drastically down and on reports that the CEOs of Chesapeake Energy Corp. and XTO Energy Inc. had been forced to sell millions of shares of their companies’ stock.

Chesapeake’s share price, which had closed Friday at $16.52, finished the day Monday up more than 22% to about $20.20/share in trading more than twice its normal volume. XTO, which closed Friday at $28.05/share, also was up more than 18% to trade around $33.18/share. Share prices across the oil and natural gas industry joined stocks in general on the more than 900-point rally based on international government pledges to support the global banking system. The petroleum sector also benefited from a call for an emergency OPEC meeting and the possibility of oil production cuts to support prices.

A number of U.S. independents, including Anadarko Petroleum, Apache, EOG, Quicksilver, Ultra Petroleum all showed stock price gains above 20%, while Denbury Resources was up more than 30% and Southwestern Energy hit above 36%. Among the majors BP’s stock price was up over 14%, ExxonMobil’s more than 17% and ConocoPhillips’ 16%. Among pipelines Energy Transfer Partners was up more than 31%, El Paso and Questar 24%, TransCanada more than 15% and Kinder Morgan up more than 14%.Williams’ share price was up more than 26%.

The gains in the market Monday came on the heels of last week’s news that XTO CEO Bob R. Simpson sold around 2.8 million shares of his company holdings in a couple of days. Simpson continues to own 6.57 million shares, or 1.2%, of XTO and has options to purchase another four million shares. Simpson, who has served as XTO’s chairman since 1996 and as CEO since 1986, apparently made around $100 million from the share sales, when XTO’s stock price hovered between $28.05/share and $38.18 last week.

Simpson’s stock sale came around the same time that Chesapeake CEO Aubrey McClendon sold “substantially all” of his company stock, or around 94% of his 5.8% stake, following a margin call, according to a filing with the Securities and Exchange Commission (see Daily GPI, Oct. 13). McClendon owned around 33 million shares in Chesapeake, which in early July had been valued at a total of more than $2 billion, when the company was trading at times for more than $63/share. In three days last week McClendon sold most of his shares for an estimated $569 million.

“I got caught up in a wildfire that was bigger than I was,” McClendon told The Wall Street Journal on Saturday. “I’m fortunate that I have other resources and I’ll be fine.” His remaining stock holdings in Chesapeake were worth an estimated $32 million when the New York Stock Exchange closed Friday.

McClendon told the Journal that Chesapeake’s finances would not be caught in the same predicament in which he was caught. None of Chesapeake’s debt is due before 2012, he explained. Chesapeake is expected to end 2008 with at least $2.5 billion in cash, and it is still on track to increase natural gas production by 16% in 2009 without borrowing or selling shares, he said.

“I was very careful to make sure that I had the company protected against a 100-year flood,” McClendon told the Journal. “I had a completely different risk profile than the company did.”

Jefferies & Co. Inc. energy analysts said Monday in a note to clients that Chesapeake will grow close to 10% in 2009 if it makes some spending cuts. However, “nothing is certain in the current environment,” analysts wrote. Selling some assets are “critical” to maintaining Chesapeake’s investments in infrastructure. Chesapeake in September announced that it would slash its capital spending budget by $3 billion through 2010 (see Daily GPI, Sept. 23).

In related news Chesapeake, citing the “economic challenges faced by our country and industry,” has abandoned its plans for Shale.TV, which it had been marketing as an on-line education program about natural gas (see Daily GPI, July 23). More details on the company’s spending plans are expected to be unveiled during an analyst conference scheduled for Wednesday and Thursday in Oklahoma City. The conference is set to be webcast on the Internet from 2:30 to 5:45 p.m. EDT on Wednesday and from 8:30 a.m. to 1 p.m. EDT on Thursday at www.chk.com.

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