Chesapeake names Dixon interim CEO as McClendon set to leave

Fri Mar 29, 2013 7:37pm EDT
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(Reuters) - Chesapeake Energy Corp (CHK.N: Quote) appointed Chief Operating Officer Steven Dixon as interim chief executive officer on Friday and made him part of a three-person committee to search for a replacement for Aubrey McClendon.

McClendon is expected to step down on Monday.

In a statement Chesapeake, the second-largest producer of natural gas, said its board has established an Office of Chairman to steer the company after McClendon leaves. The three-man team will also include Chesapeake's non-executive Chairman Archie Dunham and Chief Financial Officer Domenic Dell'osso.

McClendon's departure was announced in late January, following a governance crisis and a liquidity crunch caused by heavy spending on oil and gas properties, and a collapse in the price of natural gas.

Chesapeake's board is considering both internal and external candidates for the job they had initially said would be filled by April 1.

Friday's announcement, however, indicates that the search for McClendon's successor is going to take longer than previously anticipated.

"Chesapeake continues to perform well and is successfully executing our strategy to increase liquids production, drive capital efficiencies across the business, and enhance financial flexibility to prudently fund growth," Dunham said in a statement.

Analysts have said several factors may have complicated the search: the oil producer faces financial and regulatory headwinds, it has a knotty financial structure that needs to be simplified, and there is a crowded field of public energy companies on the hunt for a CEO.

Chesapeake, which also drills new oil wells, has to fill a projected $4 billion gap between cash flow and spending this year and sell up to $7 billion in assets to help make up that shortfall in an environment where deal valuations have softened.   Continued...

Chesapeake Energy Corporation's 50 acre campus is seen in Oklahoma City, Oklahoma, on April 17, 2012. REUTERS/Steve Sisney