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Chesapeake Energy still facing uncertain future, financing needs

Chesapeake Energy Corp. is moving on without co-founder Aubrey McClendon, but it still has to clear some financial and operational hurdles.
BY JAY F. MARKS jmarks@opubco.com Published: February 4, 2013

“This is a company that needs greater fiscal responsibility and control. It needs to cut down leverage. It needs to cut down spending. It needs to become more focused,” he said. “While they've talked about doing those things in the past, they haven't been so successful at delivering on those promises.

“I think if you bring in the right person, it increases your ability to do that.”

Weiss said Chesapeake should probably hire a CEO from outside the company.

“My preference would be somebody with a good financial background with a solid No. 2 guy who understands from the science side,” he said.

Chesapeake's next CEO will take the reins of a company being investigated by at least three federal agencies based on questions about McClendon's business dealings and accusations of collusion with another natural gas company leading up to a 2010 lease sale in Michigan.

It also could be forced to sell more assets to pay for its ongoing shift to oil from low-price natural gas.

Fred Morgan, CEO of the State Chamber of Oklahoma, said Chesapeake remains an important part of the community.

“The company has reshaped America's energy prospects and has helped drive the conversation nationally regarding energy independence,” Morgan said. “Chesapeake has been, and I am confident will remain, a significant and prominent player in the energy sector, our state and our community for years to come.”

No matter what happens at Chesapeake, Oppenheimer analyst Fadel Gheit is convinced Oklahoma City will continue to thrive.

“In a $90 oil environment, life is good,” he said.

CONTRIBUTING: Adam Wilmoth, Energy Editor