Will Carl Icahn Go Another Round With Chesapeake?
Chesapeake Energy (NYSE:CHK) CEO Aubrey McClendon would be happy to have Carl Icahn, the noted activist investor, as a shareholder, but does not expect a shakeup in the company as a result.
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McClendon, speaking on a conference call Monday to discuss a $3 billion loan from Goldman Sachs (NYSE:GS), also said Icahn had invested in Chesapeake in 2010 and made over $500 million on that investment. “He made over $500 million and called to thank me when it was over,” McClendon said. “If he comes in (again), I’m pretty confident he’ll make a lot of money.”
Chesapeake has been in trouble lately with media reports highlighting McClendon’s financial dealings regarding oil well stakes obtained from the company, and possible conflict of interest in derivative trades executed through a hedge fund sponsored by McClendon, and dealing in the same products as Chesapeake.
Operationally, the company has suffered a severe downturn in prices of natural gas that has adversely affected the value of its energy-bearing assets. The company has had to resort to expensive moves to shift its production focus from natural gas to crude oil and other liquid energy products. Coming on top of its already heavy load of debt, this could prove risky.
However, CEO McClendon is optimistic that Chesapeake’s moves could result in better times ahead: “What lies ahead is actually far easier to manage, and it will be far easier to invest in as well,” he said.