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Chesapeake focusing on oil, not questions about CEO

Chesapeake Energy Corp. seems to be concentrating on its plans to become a top oil producer rather than questions about CEO Aubrey McClendon's other business ventures.
BY JAY F. MARKS Modified: May 2, 2012 at 7:20 pm •  Published: May 2, 2012

McClendon said there were plenty of positives for Chesapeake in the first quarter, even though the company posted a net loss of $71 million. He pointed to a 69 percent increase in liquids production on funding costs of only $7.14 per barrel of oil equivalent.

“Surely that's the lowest among the large cap E&Ps (exploration and production companies), if not the entire industry,” McClendon said.

He said Chesapeake is moving to capitalize on attractive prices for oil and natural gas liquids.

McClendon said he expects Chesapeake to be close to a top 5 oil producer in the United States by 2014 by developing its current assets.

The company has a leading position in a dozen leading resource plays.

“No one else in the industry has assembled anything close to the scale and quality of an asset portfolio,” McClendon said.

Steve Dixon, Chesapeake's chief operating officer, said the company already is seeing tremendous growth in its liquids production.

“Taken alone, that 46,400 barrels per day of growth would place Chesapeake's last 12 months of production growth as the 21st largest producer of liquids in the U.S.,” Dixon said.

Chesapeake is planning up to $14 billion in deals this year to cover its capital expenditure budget and slash its debt. The company expects to be able to cut its long-term debt by 25 percent while boosting production by the same percentage.

“We're all set with our asset base with the exception of the sale of the Permian and a few other minor odds and ends that we have left to sell later in 2012 and in 2013,” McClendon said.

He said Chesapeake is changing from aggressive developer of new resource plays to a “high quality manufacturing company that will focus on achieving exceptional returns on capital on the assets we already own.

“I've never been more excited about the company's position in the industry, the strength of our assets and the coming improvements to our balance sheets,” McClendon said.


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