NEW YORK, Wed Apr 18, 2012 – Shares in Chesapeake Energy Corp. fell nearly 10 percent on Wednesday after a Reuters report that CEO Aubrey McClendon had borrowed as much as $1.1 billion over the last three years against his stake in thousands of company wells.
The stock dropped 9.6 percent to $17.28 in early afternoon. Shares last traded at that level in July 2009.
The volume of Chesapeake shares changing hands was more than double the 10-day moving average, and the stock was the most actively traded on the New York Stock Exchange.
“It’s certainly not a positive article,” said Capital One Southcoast analyst Marshall Carver. “I think that has something to do with” the stock drop.
At a previously planned presentation to analysts and investors Wednesday morning, McClendon did not mention the Reuters report.
The CEO, who appeared subdued compared with his usual upbeat demeanor, was not asked about the report as he discussed the company’s drilling program and asset sales.
The news threatens to “put a cloud” over the company’s planned initial public offering of its oilfield services unit, Brean Murray analyst Ray Deacon said.
Chesapeake wants to raise up to $862.5 million from the IPO, first announced on Monday.