?Aubrey K. McClendon, chief executive of Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) involuntarily sold substantially all of his shares of Chesapeake common stock from Oct. 7-10 to meet margin loan calls.


McClendon says, “I am very disappointed to have been required to sell substantially all of my shares of Chesapeake. These involuntary and unexpected sales were precipitated by the extraordinary circumstances of the worldwide financial crisis. In no way do these sales reflect my view of the company’s financial position or my view of Chesapeake’s future performance potential. I have been the company’s largest individual shareholder for the past three years and frequently purchased additional shares of stock on margin as an expression of my complete confidence in the value of the company’s strategy and assets.”


He adds that his confidence in Chesapeake remains undiminished, and he plans to rebuild ownership in it.


Separately, Chesapeake has invested its cash proceeds in U.S. Treasury and other highly liquid securities to make sure its revolving credit facility could be fully utilized during current market issues. As of Sept. 30, Chesapeake had $1.5 billion in cash and cash equivalents on hand.


All 36 lenders that participate in the credit facility fully funded their commitment, with the exception of Lehman Brothers, which is in bankruptcy protection. The facility matures in November 2012 and its first maturity of senior unsecured notes is in July 2013.


The company also reports that it is continuing its divestment plans and currently plans to generate $2.5- to $3 billion in the fourth quarter from the sale of a 25% interest in the Marcellus shale, leasehold and production in three other areas and closing of a fourth volumetric-production-payment deal.


Tudor, Pickering, Holt & Co. Securities Inc. analysts David Heikkinen and Brad Pattarozzi report that late-afternoon statements on Oct. 10 by McClendon and the company “should alleviate some investor concerns that Chesapeake has some lurking boogeyman in the closet.”


The Pickering analysts report, “The only real way for Chesapeake to calm liquidity fears is to just grind it out day by day, get through a fourth-quarter cash crunch via asset sales and/or more capex cuts, and prove that the company is sound.”


Chesapeake’s reserves are still up 11% over year-end 2007.


“Total resource potential jumped from 45 trillion cu. ft. equivalent to 60 trillion cu. ft. equivalent, but no one is paying for potential today,” the analysts report.


They add that if Chesapeake only develops 50% of its Haynesville acreage with well results that match their curve—initial production rates of 7.5 million cu. ft. equivalent—the asset is worth about $20 per share, or roughly 20% above the current stock price.


“Without question, investors will require a review of Chesapeake’s balance sheet and funding capability…as well as a discussion of funding priorities in order to understand how the company will spend money in various commodity-price scenarios,” they report. “Hedging counterparties will also be a focus.?Remember the good old days when it was about things like acreage position and well results?”


They add that they believe McClendon is a fighter “and we doubt that he would voluntarily leave Chesapeake at this juncture or stock price.

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