Chesapeake Energy Corp. co-founder Aubrey K. McClendon is stepping down as CEO on April 1, the company announced Tuesday.
McClendon, 53, has agreed to retire, but the company said he will remain with the company until his successor is appointed.
McClendon relinquished his position as Chesapeake's chairman in May amid media reports questioning his mingling of personal and company business. He was replaced by former Conoco executive Archie W. Dunham as the company replaced half its board at the behest of its two largest shareholders.
An ongoing review by Chesapeake's board has not revealed any improper conduct by McClendon, the company said Tuesday. The review is expected to be completed by Feb. 21.
Chesapeake said the decision to find a new CEO for the company is not related to the board's pending review of McClendon's finances.
His departure is being treated as a termination without cause, according to a person familiar with the matter.
McClendon stands to receive more than $50 million in severance pay, accelerated equity compensation and other benefits, according to the company's 2012 proxy statement. The source said that figure will be lower because of recent moves to curtail his salary.
McClendon admitted “philosophical differences” with Chesapeake's reconstituted board in Tuesday's announcement, but he said he is looking forward to working with the company and the board to ensure a smooth transition to new leadership.
McClendon, who also will exit from Chesapeake's board, will be barred from competing with the company for at least six months.
Chesapeake's stock surged about 10 percent to $20.69 in aftermarket trading Tuesday with news of McClendon's retirement. It had closed at $18.97.
Argus Research analyst Phil Weiss said moving on without McClendon is the right move for Chesapeake and its shareholders.
“I don't necessarily mean that as an indictment against McClendon, but more the fact that companies have life cycles,” Weiss said. “The same person that leads it through one stage of its life cycle is not necessarily the one that should lead it through the next. The company's knowledge is going from asset gathering to asset harvesting.”
Dunham assured Chesapeake employees Tuesday that the company was not for sale, nor does it plan to eliminate perks like the company's on campus child care, fitness center or restaurants.
Dunham also lauded McClendon for his contributions while at the helm of Chesapeake.
“Over the past 24 years, Aubrey McClendon has created one of the most valuable and innovative companies in the energy industry,” Dunham said. “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.”
McClendon co-founded Chesapeake in 1989 with Tom Ward, who is now CEO of Oklahoma City-based SandRidge Energy Inc.
Ward praised his former partner Tuesday.
“Aubrey is a great friend, a great leader who built a great company,” he said.
McClendon said he is proud of his accomplishments at Chesapeake.
“Over the past 24 years, I have had the privilege of developing Chesapeake into one of the world's premier energy companies. It has been an honor to work with my outstanding management team and the company's 12,000 very talented and dedicated employees,” McClendon said. “I am extremely proud of what we have built over the last quarter of a century, and I am confident that Chesapeake is in a great position to continue to grow and achieve great success in the future as it realizes the full value of its outstanding assets.”
Chesapeake, the nation's second-largest natural gas producer, has been turning its attention to oil and other liquids. The company has built up substantial holdings in many of the nation's leading resource plays.
Chesapeake said Tuesday it is committed to its existing $6 billion drilling and completion budget for this year. It also will proceed with planned asset sales and other programs meant to slash the company's long-term debt.
“Going forward, the company will strive to continue as a low cost producer of oil and gas while further enhancing and strengthening its balance sheet,” Dunham said. “Capital allocation and operating decisions will be made with the goal of prudently growing the company's intrinsic value per share for the long-term benefit of its shareholders.
“By forging ahead with a new chief executive officer, the company's strong management team and talented employees will continue to develop the industry's best assets to create substantial value for shareholders and themselves in the years ahead.”
Energy Editor Adam Wilmoth