Chesapeake Energy CEO Aubrey McClendon said Monday he’d welcome activist investor Carl Icahn as a shareholder.
Icahn, who is reportedly buying a substantial stake in the beleaguered natural gas producer, has a reputation for investing in companies and aggressively calling for change. But McClendon hinted that no shakeup was afoot in a conference call Monday to discuss a $3 billion loan from Goldman Sachs.
Chesapeake investors, who’ve seen the value of their shares decline about 38 percent since late March, cheered the possibility of having Icahn on their side. Shares rose more than 4 percent.
McClendon noted that Icahn briefly invested in the company in 2010 with good results.
“He made over $500 million and called to thank me when it was over,” McClendon said. “If he comes in (again), I’m pretty confident he’ll make a lot of money.”
Icahn didn’t return a call for comment.
Icahn’s investment, which was reported in The Wall Street Journal, follows two roller-coaster weeks for the country’s No. 2 natural gas producer. McClendon has lost board chairmanship, and some analysts and investors are calling for his dismissal as CEO.
The Oklahoma City-based company’s troubles are moored to a recent plunge in natural gas prices that sharply reduced the value of its assets. Like other natural gas producers, Chesapeake has shut down some natural gas operations and shifted more profitable crude oil and other liquid hydrocarbons.
Such a move is costly, and risky for a company with a high debt load. Chesapeake plans to increase spending by $1 billion this year to $12.6 billion in 2012.
On Friday, Chesapeake announced a $3 billion loan from Goldman Sachs and the Jefferies Group. But borrowing costs are going up, and asset sales undermine its goal to produce more oil.
Meanwhile, news reports have revealed a string of corporate governance issues at Chesapeake. Besides running up company debt, McClendon ran his own hedge fund while CEO that bet on oil and natural gas prices – commodities that Chesapeake produces. McClendon also took out a personal loan from a company that was planning to buy Chesapeake assets.