CHESAPEAKE Energy's growth since its founding in 1989, the 100th anniversary of Oklahoma City, has been breathtaking. The rush to judgment about Chesapeake's current status is breathtaking as well.
We urge readers to take a deep breath and then take stock of what all this company and its management have contributed to this city.
We come here today not to praise Chesapeake or to bury any criticism of the company. Shareholders own the company. A board of directors and executives run it. They will determine the company's future course and leadership.
While we relish in Chesapeake's triumphs and contributions, others seem to relish in the problems that the company and its CEO find themselves in. Business journalists have reported on Chesapeake's problems — its growing debt, its plunging stock prices, its “insider” dealings with CEO Aubrey McClendon. Some of the reporting has degenerated into the trivial but most has been serious and complex.
Involved are McClendon's compensation, loans made to the CEO, his political influence, etc. The names of Enron and WorldCom have been put in a mixing bowl with a dash of Chesapeake/McClendon thrown in for flavoring.
This is unfair. No evidence has been offered that the company and McClendon have done anything illegal, as was true of Enron. Or that accounting practices have been fraudulent, as was true of WorldCom. Shareholders suing Chesapeake will make claims regarding conflicts of interest and mismanagement, but this isn't the same as criminal activity.
McClendon has defused some of the criticism with his announcement Thursday that he will forfeit the right to invest in every Chesapeake well.
A core problem affecting Chesapeake today is one that affects other city-based energy firms. It's the price of natural gas. Energy firms are accustomed to periods of bad tidings, followed by booms. During those booms, the companies have the cash to contribute not only to the private economy but through donations to charitable organizations.
In 2010 alone, Chesapeake gave more than $25 million to benefit the arts, the environment, social services, health and education. Its employees give of their time and money every day — right here in Oklahoma.
Oklahoma City and its energy industry are more than Chesapeake. And Chesapeake is more than Aubrey McClendon. Yet it's impossible to separate Chesapeake from the economic revitalization of the city since 1989. And it's impossible to separate Chesapeake's success from Aubrey McClendon.
We need this company to prosper and to remain based where it was birthed. Chesapeake needs to put its affairs in order, which appears to be already under way. We should all breathe a sigh of relief if structural changes and, more importantly, an improvement in the gas market result in a bigger, better Chesapeake helping to build a bigger, better Oklahoma City.