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Chesapeake Energy Corp. CEO says he began borrowing in 1993

Chesapeake Energy Corp. CEO Aubrey McClendon has been borrowing money to cover his share of the company's drilling costs since the well participation program began in 1993, he revealed Thursday.
BY JAY F. MARKS Published: April 27, 2012

He estimates his share of production from Chesapeake wells was worth $852 million as of Dec. 31 based on commodity prices and proved reserves, according to Thursday's disclosure.

The total proved reserves associated with the program are about 810 billion cubic feet of natural gas equivalent. About 87 percent of that is natural gas.

McClendon's holdings were producing an estimated 147 million cubic feet of gas equivalent daily at the end of 2011.

Chesapeake co-founder Tom Ward had been eligible to participate in the program until he left the company. Now he is CEO of SandRidge Energy Inc.

SandRidge had a similar program, which allowed Ward to take a 3 percent stake in its wells, until October 2008.

“The program was ended in order to retain a greater working interest in future wells, thus increasing proved undeveloped reserves,” Ward said Thursday.

SandRidge paid Ward about $67.3 million in cash for his stake in the company's wells when the program was eliminated.



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