Jeremy Hobson: It's not a great time to be in the natural gas business. There's a lot of supply and not enough demand to make much money. But the nation's second largest natural gas company has had an especially bad year. Chesapeake Energy is facing allegations that its CEO put his own interests ahead of the company's. And today, angry shareholders will have their say in Oklahoma City.
From the Marketplace Sustainability Desk, Scott Tong reports.
Scott Tong: Earlier this spring, news reports suggested CEO Aubrey McClendon mixed personal business with the company’s. Chesapeake Energy stock tanked, and shareholders screamed. The firm stripped McClendon of his board chairmanship. And as for him personally borrowing from company lenders, that ended, too.
Not enough, says Michael Garland. He represents New York City pension funds, a Chesapeake investor.
Michael Garland: They saw that in recent weeks, the incremental steps that they took were not restoring confidence among investors. And I think ultimately they had no choice.
No choice but to give activist shareholders four board seats Monday. A new chairperson will give outsiders a majority five.
But fixing the board doesn’t fix everything, says Philip Weiss at Argus Research. The company balance sheet is red all over.
Philip Weiss: It has a significant amount of balance sheet debt, as well as off-balance sheet debt. And while natural gas prices are up, they’re still not at numbers high enough to make natural gas production economic.
There are rumors that Chesapeake -- or big pieces of it -- are on the sales block.
I’m Scott Tong for Marketplace.