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Chesapeake, NYSE:CHK

Aubrey K. McClendon’s reign as CEO of Chesapeake Energy Corp. came to a sudden end this week because top investors grew tired of what they termed the “Aubrey discount.”

Chesapeake’s largest shareholders, Southeastern Asset Management Inc. and investor Carl Icahn, persuaded its board that Wall Street had lost confidence in Mr. McClendon, who they argued was weighing down the company’s stock price.

Mr. McClendon co-founded Chesapeake 23 ys ago and built it into the nation’s 2nd largest Nat Gas producer, had not foreseen an imminent departure. He noted in an email message Tuesday to his top executives that he had not contemplated exiting the company when he met with the executives last week.

Mr. McClendon began losing his grip on the company after Reuters reported last year that he had borrowed more than $1-B against his well stakes from a firm that also invested in Chesapeake itself.

That and other Reuters reports of potential conflicts of interest, coupled with a cash crunch amid weak Nat Gas prices and bloated spending, sparked an investor revolt and a board shakeup.

Analysts said that while the unusual arrangements were part of his undoing, they will not be easy to unwind.

Mr. Icahn and Southeastern did not return calls seeking comment Wednesday.

A spokesman for Mr. McClendon, 53 anni, said he had no comment. Chesapeake declined to comment.

The investors were rewarded when Chesapeake shares gained following the company’s announcement of Mr. McClendon’s exit after the market closed Tuesday.

Chesapeake’s announcement signaled the company expects his presence will be felt for quite a while.

McClendon “will continue to be an important partner with the company given his stock ownership, as well as his interests in certain of the company’s wells,” it said in a statement.

He will also receive his “full compensation and other benefits” under his employment agreement.

A person familiar with the terms of the separation said it was being treated as “termination without cause,” entitling the CEO to some of the most generous benefits laid out in his employment contract.

McClendon is entitled to total compensation of about $47-M. That includes $11.7-M in total cash compensation, based on McClendon’s salary and bonus, to be paid out over 4 yrs.

It also includes restricted stock awards already given to McClendon that have a value of $33.5-M, the person familiar with the compensation package said.

He will also be entitled to CEO-style perks, including personal use of corporate jets that could be worth up to $1-M over 4 yrs, the person said.

Mr. McClendon appeared to hint Wednesday that his exit was unlikely to mark the end of his career. In his daily inspirational quote-of-the-day message to employees, he cited Albert Einstein: “In the middle of every difficulty comes opportunity.”

The stock rose 6% to 20.11 in NYSE composite trading Wednesday. The stock has a 52-wk high of 26.09.
Shares of the company traded as high as 35 in Y 2011, before falling Nat Gas prices started to weigh on a number of energy companies and concerns about Mr. McClendon’s personal financial dealings led to an investigation by the board.

The stock is trading above it 20, 50 and 200-Day MAs.

Wednesday’s Volume: 68.5-M/shrs is more than the average 90 day volume at 13.5-M/shrs.

EPS:-1.23

P/E: 0.00

RSI:73:0

Divi Yield: 1.85%

Next Earning Date: 21 February 2013

Analysts Recommendation: Hold

1 yr Price Target Estimate:

Performance Metrics

Week Month Quarter Half Year Year
+1.28% +13.12% -5.06% +5.56% -11.73%

LTN Analysis: Overall Short Intermediate Long
Bullish (0.25) Bullish (0.27) Bullish (0.31) Neutral (0.18)

Recent CandleStick Analysis Very Bearish
Date Candle
29 Jan 2013 DOJI
28 Jan 2013 Bearish Harami

Open Gaps
Direction Date Range
up 30 Jan 2013 19.09 to 19.9
up 22 Jan 2013 17.82 to 17.84

Support and Resistance
Type Value Conf.
resist. 21.58 2
resist. 20.57 4
resist. 20.31 2
supp 19.93 5
supp 19.03 7
supp 18.79 2
supp 18.45 3
supp 18.12 2
supp 17.73 10
supp 17.06 7
supp 16.49 6

Technical Indicators
Ind. Short Inter Long
EMA VBu VBu VBu
MACD VBu VBu VBu
RSI N
TDD Bu
Fibs Be Bu Bu
Highs Bu N Be
Lows N Be VBe
Trends N N VBe
Stoch. VBu
VBu=Very Bullish, Bu=Bullish
N=Neutral
Be=Bearish, VBe=Very Bearish