Brother, can you spare a million or two?

[HazMatCFO]

http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20081011_49_E6_Aubrey856860

Chesapeake CEO sells his stock to meet margin calls

The Oklahoma City executive cites the global financial crisis.

Chesapeake Energy Corp. CEO Aubrey McClendon involuntarily sold "substantially all" of his stock in the company during the past three days to meet margin loan calls, the Oklahoma City-based natural gas giant said Friday.

"These involuntary and unexpected sales were precipitated by the extraordinary circumstances of the worldwide financial crisis," McClendon said in a statement. "In no way do these sales reflect my view of the company's financial position or my view of Chesapeake's future performance potential."

McClendon owned 33.5 million shares, or 5.8 percent of the company's common stock, according to a Sept. 30 filing with the Securities and Exchange Commission. He was the company's third-largest shareholder.

Chesapeake is this year's worst-performing petroleum producer in the Standard & Poor's 500. Shares fell 6.7 percent Friday on the New York Stock Exchange amid concern that hedging contracts won't protect the company against a plunge in natural gas prices.

Shares of Chesapeake stand at $16.52, down from a 52-week high of $74.

McClendon's divestiture was announced after the close of regular trading.

Company spokesman Jeff Mobley declined to comment beyond the content of the statement.

He said in an interview that the company will soon file forms showing what price McClendon received for his shares.

Investors are concerned that Chesapeake and other oil and gas producers have hedging contracts with financial firms and other parties that won't be able to pay for their output at the agreed-upon prices because of the global credit crisis, said Robert Goodof, a money manager at Loomis Sayles & Co. in Boston.

Oil and gas producers use hedging contracts to lock in prices and ensure adequate returns from their wells and sufficient cash flow to pay off their debt.

Forbes magazine last month listed McClendon among the nation's 400 richest people, with a net worth of $3 billion.

Chesapeake said it had cash and cash equivalents of about $1.5 billion as of Sept. 30. All 36 lenders that participate in Chesapeake's revolving credit facility fully funded their commitment, except for bankrupt Lehman Brothers Holdings Inc., which didn't fund its $11 million share of the advance, the company said.

Chesapeake's financial exposure to Lehman Brothers included unpaid gas sales and derivate contracts. Chesapeake said it received cash payment for all natural gas marketed through a former affiliate of Lehman Brothers. Chesapeake company estimates that a loss on terminated derivate contracts and the net value of hedges with Lehman won't be more than $50 million.

McClendon is the second CEO in two days to reveal company stock sales. XTO Energy Inc. CEO Bob Simpson sold more than $101 million of stock, according to a filing Wednesday with the Securities and Exchange Commission. Simpson sold shares of the Fort Worth-based company at prices ranging from $34.64 a share to more than $39.50 a share, the filing said.

The sales represents about a third of Simpson's stake in XTO. He was the company's 10th-largest shareholder.

[Wrinkle]

Maybe he can use the $30 million in tax credits he received from the State of Oklahoma to help out. Or, the $25 million in deep well drilling tax credits Gov Henry awarded at the end of the year.

Seems the selling of _personal_ shares indicates a _personal_ failure in hedge fund speculation on HIS part and has little, or should, to do with the company itself.

[Wrinkle]

Question: How does a CEO of a major energy company get into such a problem personally with hedge funding?

Seems he'd be directing company investments rather than his own, unless he had other motives.

[inteller]

well just be glad he is sinking himself and not the company like Semgroup