A lawsuit alleging that Chesapeake Energy Corp. misled investors by not disclosing some liabilities and personal loans of former CEO Aubrey McClendon was dismissed last week in Oklahoma federal court.

The lawsuit was filed almost one year ago by investors Dvora and Steven Weinstein (Dvora Weinstein v. Aubrey McClendon, U.S. District for the Western District of Oklahoma, No. 12-465). Other litigation regarding similar claims had been put on hold pending the decision by U.S. District Judge Vicki Miles-LaGrange.

“This is the lead case against Chesapeake, and the first ruling in which a court has addressed the merits of the claims that have been asserted against the company and members of its management team,” Robert P. Varian, an outside lawyer representing Chesapeake, said. Chesapeake is “pleased with the court’s complete rejection of the claims, which were based on unfounded accusations.” The claims “were given widespread attention in the media,” he added.

Deborah Allan, a spokeswoman for the Ontario Teachers’ Pension Plan Board, which was appointed lead plaintiff, said “we are disappointed by the ruling and are considering what our next step might be.”

The lawsuit sought damages on behalf of investors that purchased Chesapeake stock between April 2009 and May 2012, during which time the shares plunged 60%. The plaintiffs have claimed that the company misled investors about its financial health by concealing $1.4 billion in obligations that weren’t on its balance sheet, as well as more than $1 billion in personal loans that McClendon had borrowed from firms that did business with Chesapeake.

McClendon used the loans to help pay for his share of drilling expenses in Chesapeake wells in which he holds a stake. He was ousted as chairman of the company following the public disclosures, and remained CEO until his retirement April 1. COO Steve Dixon was tapped as acting CEO until a permanent CEO is named.

Plaintiffs argued that the revelation of the liabilities last year caused Chesapeake’s worth to decline. However, Miles-LaGrange ruled that Chesapeake didn’t “intentionally or recklessly” hide the liabilities or McClendon’s loans. The allegations, said the judge, don’t support a “strong inference that McClendon knew that not disclosing his personal loans would somehow mislead investors.”

Still before the court are lawsuits that claim the board breached its fiduciary duty to disclose the liabilities. Thirteen shareholder lawsuits were consolidated last July into a single federal case. The litigation was placed on hold while waiting for Miles-LaGrange to rule on the motion to dismiss the Weinstein case.

Meanwhile, the asset sales continue as Chesapeake works to clean up its balance sheet. It has carved out a 94,000-acre tract in Ohio’s Stark and Portage counties to sell, land that represents roughly one-tenth of its leasehold in the Utica/Point Pleasant Shale.

The acreage being marketed is mostly in Stark County, except for Osnaburg, Paris, Sandy and Washington townships, according to Meagher Energy Advisors. Land also is for sale in seven southern Portage County townships. Two operated wells are included in the sale, as well as another well in which Chesapeake holds a financial stake, the listing indicated. According to the Ohio Department of Natural Resources, Chesapeake as of March 30 had one operated producing well, two drilled wells and two well permits in the acreage up for sale.

Chesapeake has concentrated its Utica exploration and development activities in Ohio’s Carroll, Columbiana and Harrison counties. Last year, under pressure from shareholders, Chesapeake put up for sale 337,481 net acres in the unconventional acreage, which cut its holdings from 1.3 million acres. That acreage was limited to the Cincinnati, Utica, Point Pleasant and Trenton intervals, and about 270,500 net acres were held by production in shallower zones in Queenston and Clinton counties or held by storage.

The new acreage package, said a spokesman, “can be more valuable to someone else than to us regarding where we’re putting our rigs.”

According to state data and NGI calculations, Carroll and Harrison are currently the two most active Ohio Utica/Point Pleasant Shale counties. Carroll has seen a total of 229 horizontal permits — 38.4% of the state’s total Utica/Point Pleasant permits issued; there are 11 rigs in operation. Harrison has 74 total horizontal permits, 12.4% of the total, and seven operating rigs. By contrast, Portage has 14 total horizontal permits, about 2.3% of the total, with one rig, while Stark has 13 total horizontal permits, 2.2% of the total, with one rig in operation.

Chesapeake plans to sell $4-7 billion in assets this year, Dixon said earlier this month. To date this year, Chesapeake has announced $1.5 billion in asset sales. It also continues to search for a permanent CEO.

Chesapeake has drilled more than 240 wells in the Utica, “75% of the wells drilled in the play thus far,” Dixon explained during a conference call. The only problems are related to infrastructure constraints. “We’ve turned to sales only 54 wells, but we have substantial completions planned this year.”

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