Things are so bad. How bad are they? So bad that Chesapeake Energy CEO Aubrey McClendon is selling his wine collection to raise some cash — unloading 9,000 bottles at a time when the market for high-end wines is collapsing. According to the Wall Street Journal Wealth Report blog, “Sotheby’s says it expects the sale to fetch at least $5 million–not much for a former billionaire, but these days every little million helps.”

If you don’t own any Chesapeake Energy, rest assured — neither does their CEO. The company said today that Aubrey McClendon, involuntarily sold “substantially all” of his common shares of the company’s stock over the past three days to meet margin loan calls. That’s 33.5 million shares, or 5.8 percent of the company’s common stock, according to a Sept. 30 filing with the U.S. Securities and Exchange Commission.
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When Don Young talks about the environmental impact of urban gas drilling, Mayor Mike Moncrief goes to that special place inside his head where he thinks happy thoughts and everything is OK. He tunes out. He doesn’t listen.

But who does the Mayor listen to? Depending on who’s telling it, either the little devil on his shoulder or the little angel on the other.
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One of the more underreported stories in the Barnett Shale is the ongoing antipathy between Chesapeake and XTO — I think the Eighth Avenue situation owes as much to this dynamic as it does to Bill Davis. For an amusing take on the war of words between Chesapeake CEO Aubrey McClendon and XTO CEO Bob Simpson, check out the A&D Intelligence Blog.

Apparently neighborhood activists aren’t the only ones concerned with the strategy of Chesapeake Energy. Add analysts, investors and the Securities and Exchange Commission to the list.

According to Reuters report, Chesapeake Energy has loaded up with debt, made big share issues and executed complex, less-than-transparent deals. This at the same time that CEO Aubrey McClendon builds the case that is company’s stock, valued at $49.16 yesterday (and falling) should be priced more like $150 a share.

Analysts are fixated on other things. James Halloran, energy analyst with National City Private Client Group, which owns Chesapeake shares said the company’s profit and loss statement is in constant flux, so investors never really understand what Chesapeake’s costs and revenue are.

Apparently, neither does the U.S. Securities and Exchange Commission. In a July 7 filing with the SEC, Chesapeake said the regulatory agency’s staff had made inquiries on a number of issues including its reserve replacement ratios, the company’s cash situation and a recent volumetric production payment, under which the company sold future natural gas production.
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Memo to Julie Wilson: Have someone translate “Let’s Get Behind the Barnett” into Chinese immediately.

The South China Morning Post is reporting that China National Petroleum Corp (CNPC), the state-owned energy company of the People’s Republic of China, is considering bidding for minority stakes in shale gas assets owned by Chesapeake Energy.

It is worth noting that CNPC has extensive and problematic operations in Sudan and highlights on its website the new deal it has with the government of Myanmar and also does business with Hugo Chavez in Venezuela. Would superpatriot Chesapeake CEO Aubrey McClendon really consider a business arrangement with the CNPC? It would kind of undermine the whole national security argument about the benefits of gas drilling if he doesn’t tell them to go pound sand immediately.

Back in February when Mayor Mike Moncrief kicked off the charade that is the Gas Drilling Task Force, he said it was all about quality of life.

Yep, quality of life was so important that only two members of the City Council even bothered to show up — Joel Burns and Carter Burdette. But unlike Carter, at least Joel bothered to stay until the end, even after the A/C was turned off.
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