Thursday, May 3, 2012

I'm Officially Entering the Race for Chairman of Chesapeake!

I understand Chesapeake Energy is looking for a new Chairman of the Board.

I sat down with the wife and kids last night and we made a hard decision.  We have decided that as of right now, I officially announce my intention to enter the race for the Chairmanship of Chesapeake Energy.

Now clearly I'm lacking some qualifications.  I'm an accountant, not an oil man.  I write on the internet under a pseudonym, a Chairman needs to be a real person.  I have no personal connections that will be of use for Chesapeake, a Chairman needs to be connected.

But here is what I've got.

1) Shares of Chesapeake that I bought with my own money
2) Enough common sense to know that paying the CEO $12 million for an antique map collection is not ok

Those are two things that the current board is missing.

Here is my article announcing my intention to run for office:

Last fall, after a multiple-year process of watching and researching Chesapeake Energy (CHK), I became a shareholder at a price just over $25 per share.
This past weekend, I spent some time reading the 2011 letter to shareholders from Chairman Aubrey McClendon. I thought that the following paragraph was timely:
Chesapeake's total estimated unrisked unproved resource base of 350 tcfe is by far the largest such resource base in the U.S. Chesapeake's market valuation today very clearly does not give this unrivaled resource upside any value. We presume this is because of investors' overwhelmingly negative view about the near-term future of U.S. natural gas prices. We believe this is a shortsighted approach to determining the value of our company and our unproved resource base. We are determined to unlock this value for our shareholders.
I agree with McClendon in that the value of Chesapeake's assets is far in excess of the current value implied by the stock market. I think over time it could be multiples of the current share price. I disagree, however, with the presumption McClendon makes that an overwhelmingly bearish view on natural gas is the only reason for the disconnect between intrinsic value and the current share price.
Link to entire article:

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