Co-founder of Chesapeake resigns from company
Monday, February 13th 2006, 3:10 pm
By: News On 6
OKLAHOMA CITY (AP) _ Tom L. Ward, who co-founded Chesapeake Energy Corp. and helped build it into the second largest independent U.S. producer of natural gas, announced his resignation Monday, saying he wants to pursue other interests, including charitable work.
Ward said he had stepped down as president and chief operating officer of the company effective last Friday, but would serve as a consultant for the next six months.
The Oklahoma City-based company was incorporated in 1989 with an initial $50,000 investment. The company's astronomical growth was based on the philosophy of Ward and co-founder Aubrey K. McClendon that the value of natural gas would skyrocket and that new drilling technology would unlock gas reserves.
``It's about my personal desire to have more time,'' Ward said in a telephone interview with The Associated Press. ``I've been running pretty hard for 23 years and it's time to hand over to my friend Aubrey McClendon the reins of the whole company.''
Ward said he was under no pressure from shareholders or others to step down. ``It's just the opposite,'' Ward said. ``The company has more opportunities today than we've ever had and it was the perfect time for me to elevate my good friend, Steven Dixon, to my position.''
Stephen Smith, an energy industry analyst and president of Stephen Smith Energy Associates, said he also saw no shareholder discontent or other pressures leading to the resignation.
Dixon, 47, was promoted to executive vice president of operations and chief operating officer of Chesapeake. He was senior vice president of production since 1995 and served as vice president of exploration from 1991 to 1995.
``Chesapeake has been my passion for more than 20 years,'' Ward said in a statement. ``I am happy that our investors have shared in our accomplishments, and as a co-founder of the company, I am proud of my leadership role at Chesapeake and know that I am leaving the company in good hands and in a very favorable competitive position.
``I now look forward to devoting more time and energy to my other interests, including advocacy for neglected children, and various business ventures.''
McClendon called Ward ``my good friend and partner for 23 years.''
``Through the various ups and downs associated with starting from a $50,000 investment and building it into a $20 billion company, we grew up together and remained partners through thick and thin,'' McClendon said in a statement.
Chesapeake has been continuing an aggressive growth strategy. Last month it announced plans to spend nearly $1 billion to acquire oil and gas assets in Texas and 13 drilling rigs. In November, it closed its $2.2 billion cash acquisition of Charleston, W. Va.-based, Columbia Natural Resources LLC, a deal that will allow Chesapeake to develop gas reserves throughout Appalachia.
``Mr. Ward's contribution will be missed going forward,'' Raymond Deacon, an analyst with Harris Nesbitt in New York, said in a research note Monday. ``We expect, however, the company to not miss a step (Mr. Dixon now COO) in growing the business, expecially in its new core operating area of the Appalachian Basin ... .''
Declines in the price of oil and natural gas have caused energy stocks to drop in recent days, Smith said. Chesapeake's stock was down 12.9 percent last week. The price of oil and natural gas has dropped because an unusually warm winter blunted demand and some industries and consumers increased conservation measures or switched to alternative forms of energy after previous price hikes.