Chesapeake Energy names Anadarko executive as new CEO
OKLAHOMA CITY — Chesapeake Energy has named Anadarko Petroleum executive Robert Douglas Lawler as its new CEO.
The appointment of the 46-year-old Lawler occurs after a tough year during which Chesapeake’s board ousted its founder and the company worked to shore up its finances.
Lawler takes over as Chesapeake continues selling assets to pare down an enormous debt burden. Chesapeake intends to sell $4 billion to $7 billion in assets this year. It has sold about $2 billion so far in deals that have either been signed or finalized.
“This should be viewed as a positive addition,” Scott Hanold, an RBC Capital Markets LLC analyst based in Minneapolis, said in a note to clients. Lawler “performed well” at Anadarko.
Former CEO and Chairman Aubrey McClendon built Chesapeake into the nation’s second-largest producer of natural gas by aggressively acquiring drilling rights on land throughout the country.
When natural gas prices slumped to decade-lows in early 2012, the value of those rights plummeted, as did the revenue generated from the gas produced from the land. That put Chesapeake in a financial bind that it has been trying to free itself from by selling drilling rights to other oil and gas companies.
It also exposed some controversial perks that McClendon had arranged, including the right to invest personally in all of the company’s wells. Investor uproar in the spring of 2012 over the perks and the way McClendon financed his investments led the company to remove its founder from the position of board chairman.
Even though subsequent internal investigations into McClendon’s activities turned up no improper conduct, the company announced early this year that McClendon would leave the company because of “philosophical differences” between McClendon and the board.
Lawler will be expected to spend money carefully and keep costs from escalating, strengths demonstrated by Anadarko, investment bank Tudor Pickering Holt & Co. said in a note to clients.
“We believe there is a substantial wall to climb given the balance sheet leverage and need to materially sell assets” into a weak market, the note said.
Lawler, a petroleum engineer with 25 years of experience in the exploration and production industry, is senior vice president for international and deep-water operations at Anadarko Petroleum. He also will join the Oklahoma City-based Chesapeake’s board. The appointments are effective June 17.