Chesapeake Energy Corp. said the U.S. Securities and Exchange Commission’s informal inquiry into outgoing Chief Executive Officer Aubrey McClendon’s private investments in company-owned wells escalated into an investigation.
Chesapeake was notified by the SEC that the probe had graduated to the next level on Dec. 21, the Oklahoma City-based natural gas producer said in a public filing Friday. Chesapeake also disclosed that it continues to supply documents and other information to a federal grand jury in Michigan investigating the company’s conduct in auctions of gas-drilling leases.
Chesapeake, once the pre-eminent U.S. gas producer and a prominent investor in eastern Ohio’s Utica shale formation, lost as much as 39 percent of its market value since the beginning of last year as a supply glut that collapsed profits was compounded by evaporating investor confidence in management. The board announced five weeks ago that McClendon will step down by April 1 as the company seeks buyers for billions of dollars in oilfields and other assets to plug a cash-flow deficit that Chesapeake estimated may reach $3.5 billion to $4 billion this year.
