Chesapeake stock dips on news of CEO's loans

“It could appear as something not politically correct, but it is not illegal or unethical,” said Gheit, an analyst with Oppenheimer in New York. “As a shareholder, I might frown on it. I might not like it, but it has no negative impact on my view of his management skills.”

Analyst Mike Breard agreed that the loan is McClendon's personal business, but he said it still should have been more thoroughly disclosed.

“If he borrowed $2 million to build a house, that's not anyone's business. But when it's $1 billion and it involves oil and gas with Chesapeake, that's to some extent the stockholders' business,” said Breard, a research analyst with Hodges Capital Management in Dallas. “It's just a scale kind of thing. I guess a billion dollars isn't as much to Aubrey as it would be to me.”

At least five law firms throughout the country — including one led by the former attorney general of Louisiana — on Wednesday launched investigations into whether Chesapeake and its directors violated state or federal regulations by not fully disclosing the details of the well participation program.

Chesapeake's directors reaffirmed their support for the well program Wednesday.

“The board of directors is fully aware of the existence of Mr. McClendon's financing transactions and the fact that these occur is disclosed in the proxy,” the directors said in a statement Wednesday. “Additionally, the total amount of his cost obligations and revenue attributable to the FWPP for each year are detailed in the proxy. The Founders Well Participation program fully aligns the interests of Mr. McClendon with the company, and the board of directors supports this program as does the majority of its shareholders.”

While the disclosure does not specifically state that McClendon may use his stake in the wells as collateral for loans, Chesapeake director and former Oklahoma Gov. Frank Keating said that was the clear intention of the program, considering the company participated in more than 2,000 wells in 2011 alone.

“Obviously it's assumed that Aubrey, as the participant, would on occasion borrow money to pay for these developmental costs,” Keating said. “From an ethical and a business standpoint, it's certainly constructed properly and it was approved by the shareholders. I have full faith in Aubrey McClendon.”