Oklahoma City energy companies endure trying year

It has been a difficult year for Oklahoma City's largest oil and natural gas companies.
by Jay F. Marks Modified: December 27, 2013 at 7:00 pm •  Published: December 26, 2013

There was no shortage of tumult this year at Oklahoma City's largest energy companies.

Chesapeake Energy Corp. lost its iconic co-founder, while its leaders looked for ways to cut costs.

SandRidge Energy Inc. did the same after a proxy fight with one of its largest shareholders.

Devon Energy Corp. bought into one of the nation's richest oil plays as it struggled to convince Wall Street of its true value.

Continental Resources Inc. continued to produce oil at record levels, forcing it to find new ways to move its product to market.

All four are heading into the New Year focused on their core business, producing oil and natural gas.

Chesapeake's renewed focus

Chesapeake bid farewell to co-founder Aubrey McClendon in April. McClendon, who lost his position as Chesapeake's chairman in last year's shareholder uprising, was terminated without cause by the company's new board.

Former Anadarko Petroleum Corp. executive Doug Lawler took the reins in June, embarking on a strategic review of the company's operations.

Chesapeake slashed its capital expenditure budget by 57 percent while continuing to boost production of oil and other liquids.

The company also shed about 1,200 employees during the year. The largest chunk went in October when Chesapeake laid off 800 people.

Lawler was brimming with optimism on Nov. 21 when he spoke at the Bank of America Merrill Lynch Global Energy Conference in Miami.

“It could not be a more exciting time at Chesapeake,” he said. “This is a time that's marked by transformation, by strategy and by discipline.

“In the past five months, we've had significant change in the organization, and we're driving the right things and what I believe will be continued strong growth story and a compelling investment opportunity.”

Lawler said Chesapeake has increased its liquids mix to 27 percent of its total production, with a strong asset base to build on that figure.

“The elements are in place for success along with the high-quality rock that we have and the high talent that we have in the organization,” he said last month.

SandRidge cuts costs

SandRidge entered 2013 engaged in a proxy fight with activist shareholder TPG-Axon Capital, which wanted the company to reduce its spending.

The sides reached a settlement two days before shareholders' votes were supposed to be counted in March, with TPG-Axon gaining a foothold on SandRidge's expanded board.

The deal also set the stage for CEO Tom Ward's departure.

The larger board was unable to unearth evidence of wrongdoing by Ward, as had been alleged by TPG-Axon, but it still opted to move forward without him in June.

James Bennett, who had been elevated to president in March, was chosen as Ward's replacement.

Bennett immediately refuted speculation that SandRidge was for sale, while pledging to get the most out of the company's holdings in the oil-rich Mississippian formation.

He has narrowed SandRidge's focus to the core areas of its 2 million acres in Oklahoma and Kansas, even as other producers are moving out of the Kansas portion of the play.

by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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