With Exxon Mobil's acquisition of XTO Energy this week, speculation abounds that other shale gas drillers will get gobbled up by the majors. One of the names at the top of the list is Chesapeake Energy. Chesapeake's shares have climbed 8 percent this week.
Chesapeake maybe one of the country's biggest natural gas drillers, but don't expect its co-founder and chief executive, Aubrey McClendon, to be eager to sell. As the Peridot Capitalist blog points out, Chesapeake's current stock price, which is nearing $25 a share, is far below its $74 peak of July 2008. McClendon had been aggressively buying those shares on the way up, and at the peak, his stake of more than 5 percent was worth about $2.5 billion.
Then gas prices swooned, dragging Chesapeake's shares with them. Things got worse when the market learned McClendon had been amassing his huge stake on margin, and the declining price forced him to sell.
When news of his carelessness hit the market, it accelerated Chesapeake's decline. The company's shares fell 85 percent in five months. McClendon still owns about 2.4 million shares (compared to the 34 million he once did), which is worth about $60 million.
McClendon, in other words, wants to rebuild, both his company and his reputation. To a guy who once was worth $2.5 billion, $60 million isn't much of a consolation prize....MORE
Here's a 3-month comparison of CHK with Devon, Southwestern and Range, via Yahoo Finance:
Southwestern is leading the pack on the 5-day too.