Chesapeake Energy Corp. is more focused on becoming a top 5 oil producer than on questions about its CEO's financial dealings, based on Wednesday morning's earnings call.
CEO Aubrey McClendon apologized at the beginning of Chesapeake's first-quarter earnings call for the “distractions” caused by lingering questions about personal loans he secured to buy a stake in the company's wells, but he did not mention a Reuters report Wednesday indicating he had run a $200 million hedge fund from inside the company.
Heritage Management Co. LLC, which was established by McClendon and Chesapeake co-founder Tom Ward, traded in the same commodities as Chesapeake for at least four years while operating inside the Oklahoma City-based natural gas producer, according to the report.
The report said there was no evidence McClendon or Ward used inside knowledge from Chesapeake in their hedge fund trading. Chesapeake and McClendon declined to comment, but Ward told Reuters he saw no conflict of interest in the arrangement.
Analysts did not ask any questions about potential conflicts during the 90-minute call with McClendon.
McClendon on Wednesday said it has been a “challenging” couple of weeks for Chesapeake and its shareholders since Reuters first reported on his personal dealings with private equity firms that have invested in the company.
“There's been enormous and unprecedented scrutiny of our company and of me personally. And a great deal of misinformation has been published and uncertainty created,” McClendon said. “Your mother told you not to believe everything you read or hear for good reason, and that's certainly been the case for the past two weeks.
“I am deeply sorry for all the distractions of the past two weeks.”
McClendon did not elaborate before turning his focus to the company's business.
“My primary job as CEO has been and always will be to build long-term value along with attractive short-term returns for the company and all of its stakeholders,” he said. “That is the task at hand and that is and has been my primary focus for the past 20 years.
“Those that know me know that I will work tirelessly to achieve that goal, and know I will not allow myself or your management team to be distracted from that mission.”
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