Chesapeake CEO Uses Wells To Borrow Money

Scott Detrow

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Scott Detrow is a congressional correspondent for NPR. He also co-hosts the NPR Politics Podcast.

Detrow joined NPR in 2015 to cover the presidential election. He focused on the Republican side of the 2016 race, spending time on the campaign trail with Donald Trump, and also reported on the election's technology and data angles.

Detrow worked as a statehouse reporter for member stations WITF in Harrisburg, Pennsylvania, and KQED in San Francisco, California. He has also covered energy policy for NPR's StateImpact project, where his reports on Pennsylvania's hydraulic fracturing boom won a DuPont-Columbia and national Edward R. Murrow Award in 2013.

April 18, 2012 | 3:54 PM

Scott Detrow / StateImpact Pennsylvania

Chesapeake CEO Aubrey McClendon addresses a September natural gas drilling conference

Reuters reports Chesapeake CEO Aubrey McClendon is using his stake in the company’s natural gas wells to borrow money:

Aubrey McClendon, the CEO of Chesapeake Energy Corp, has borrowed as much as $1.1 billion over the last three years against his stake in thousands of company wells – a move that analysts, academics and attorneys who reviewed loan documents say raises the potential for conflicts of interest.
The loans, which haven’t been previously detailed to shareholders, are used to fund McClendon’s operating costs for an unusual corporate perk that offers him a chance to invest in a 2.5 percent interest in every well the company drills. McClendon in turn is using the 2.5 percent stakes as collateral on those same loans, documents filed in five states show.
The size and nature of the loans raise questions about whether McClendon’s personal financial deals could compromise his fiduciary duty to Chesapeake investors, experts who reviewed the documents told Reuters.

Chesapeake operates 191 producing Marcellus Shale wells in Pennsylvania, but is shifting its attention to Ohio’s Utica Shale.
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