Chesapeake Energy Corp. on Wednesday absolved itself and outgoing CEO Aubrey McClendon of any wrongdoing in dealings that raised allegations of shoddy governance at the Oklahoma City-based oil and natural gas company.
The announcement likely will not mark the end of the scrutiny facing Chesapeake, which is being investigated by at least four federal and state agencies. Its board also faces more than a dozen breach of fiduciary duty lawsuits filed by shareholders.
Michigan Attorney General Bill Schuette will continue his inquiry into collusion allegations against Chesapeake and Canadian rival Encana Corp., even though both companies have cleared themselves in internal investigations.
“The importance of independent — rather than internal — investigations cannot be emphasized enough in a case involving antitrust bid-rigging allegations,” spokeswoman Joy Yearout said Wednesday. “Our thorough, independent investigation into these serious allegations will continue.”
Chesapeake also has acknowledged ongoing investigations by the U.S. Securities and Exchange Commission, IRS and Justice Department.
On Wednesday, the company said a board review of McClendon's finances found no evidence of intentional misconduct or conflicts of interest.
The board also concluded Chesapeake did not violate antitrust laws in a 2010 Michigan land sale, although it is still cooperating with Justice Department investigators.
Oppenheimer analyst Fadel Gheit said Wednesday's announcement removes some of the uncertainty facing Chesapeake.
“Whatever uncertainty was associated with the investigation, it eliminates it or reduces it,” Gheit said. “It is definitely a step in the right direction.”
Chesapeake's stock was down 12 cents Wednesday to $20.24 a share.
“All in all, I think shareholders are better off today than yesterday. Most investors do not like uncertainty,” Gheit said. “We already have operating challenges, market challenges, environmental challenges and pricing challenges.”
“We don't need another layer of uncertainty. That's the last thing people want.”
Chesapeake remade its board last year under pressure from its two largest shareholders. Last month that board won a power struggle with co-founder McClendon.