Chesapeake Energy CEO and co-founder Aubrey McClendon will retire April 1, the company announced today.
McClendon, who has been with the Oklahoma City-based energy company since its creation in 1989, will continue to serve as CEO until his successor is appointed.
Chesapeake board Chair Archie Dunham praised McClendon's service in a news release late Monday, calling him a "pioneer" and a "leader."
"Over the past 24 years, Aubrey McClendon has created one of the most valuable and innovative companies in the energy industry. Under Aubrey's strong leadership, Chesapeake has built an unmatched portfolio of natural gas and oil assets in creating one of the world's leading energy companies. … However, as the company moves toward more fully developing the value of its outstanding assets, Chesapeake is at an important transition in its history and Aubrey and the Board of Directors have agreed that the time has come for the company to select a new leader."
McClendon expressed pride in building the company but noted "certain philosophical differences" with the board. Four directors were replaced at investors' insistence after the company's annual meeting in June.
"Over the past 24 years, I have had the privilege of developing Chesapeake into one of the world's premier energy companies. It has been an honor to work with my outstanding management team and the company's 12,000 very talented and dedicated employees. I am extremely proud of what we have built over the last quarter of a century and I am confident that Chesapeake is in a great position to continue to grow and achieve great success in the future as it realizes the full value of its outstanding assets," McClendon, 53, said in the release.
McClendon came under fire from shareholders after reports surfaced that he borrowed more than $1 billion using his stake in company wells through the Founder Well Participation Program as collateral. Moreover, according to published reports, some of McClendon's lenders also did business with Chesapeake, potentially creating a conflict of interest.
The board further announced that its "extensive review" of alleged conflicts of interests has found nothing improper, and said the review had no bearing on McClendon's decision to step down. The board will release the results of its investigation in mid-February.
McClendon sent the following email to Chesapeake employees Tuesday afternoon,
"Dear CHK'ers: By now you all should have received the press release announcing that the Board and I have mutually agreed to my resignation as CEO as of April 1, 2013. Although this is due to certain philosophical differences that exist between the Board and me, the separation will be amicable and smooth.
I have the utmost confidence in you and the company's future and I will always treasure the time we have spent together building Chesapeake into the unique and dynamic company that it is today. In many respects, our accomplishments are unique and I will always remain immensely grateful for the time I have spent with you building CHK into the industry leader that it is today.
My best wishes to you all and onward and upward from here!"
Chesapeake Chairman Archie Dunham sent the following email to employees,
"As you may have just read in an email from Aubrey and will see in the press release this evening, the Board of Directors of Chesapeake has mutually agreed and accepted Aubrey McClendon's resignation as CEO effective upon appointment of his successor, and retirement from the company, effective April 1, 2013. The decision was made in full recognition and appreciation for the enormous achievements Aubrey has made in founding and building Chesapeake into the extraordinary enterprise it is today.
Over the past 24 years, Aubrey has created one of the most valuable companies in the energy industry. Under his strong leadership, Chesapeake has built an unmatched portfolio of natural gas and oil assets in creating one of the world's leading energy companies. Aubrey has been a pioneer in the development of unconventional resources, and he has also been a leader in the effort to make the United States energy independent. Aubrey has done all of this with the support and expertise of the world-class senior management team he recruited to Chesapeake and the dedication of our employees.
For the transition, Aubrey remains our CEO. During this interim period, he will work closely with Steve Dixon, Chief Operating Officer, and Nick Dell'Osso, Chief Financial Officer, to transition certain day-to-day management responsibilities and assure that the company maintains the highest degree of operational excellence and strategic execution of our business plan. The Board of Directors and the senior management team are counting on your continued dedication and focus as we execute our strategy of developing our world-class assets and maintain our performance as a low-cost producer of oil and gas while further strengthening the balance sheet.
I would also like to address certain likely points of concern among you. First, the company is not for sale. Second, the board has confirmed the current drilling and completion budget of six billion dollars and is eager to see the exciting recent results of the company's core of the core development strategy continue. Lastly, the board and management believe strongly in the culture of excellence at Chesapeake and are committed to seeing this culture thrive in the future. The Board has no intention of eliminating childcare, shutting down the Fitness Center, or selling the Company cafeterias. I'm sure that other false rumors will appear, so when they surface, ask Steve or Nick if they are true. Our truly top notch 12,000 employees remain the company's best asset, and we will continue to retain and attract the best talent in the industry.
We are at an important transition point for our company, but it is also a point of great opportunity. Thank you for all you do to make Chesapeake a great company."
Oklahoma City Mayor Mick Cornett released the following statement,
"Aubrey McClendon has been good to his employees, good for his shareholders, and good to his hometown. I look forward to seeing what he chooses to do next."