Chesapeake Energy Corp. shares tumble after CEO loan story

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.

Airline shares tumble on oil price rally on stock market

NEW YORK – Airline shares fell broadly on Tuesday, with US Airways Group’s stock leading the decline, as the price of oil rallied, which directly influences the cost of jet fuel.

US Airways shares plummeted 10.4 percent to $7.97 on the New York Stock Exchange. Shares of United Continental Holdings were down 7.78 percent at $21.55, and Delta Air Lines’ shares fell 6 percent to $10.18, both on the NYSE.

U.S. crude oil futures rose $1.52 to $104.76 after trading beyond $105 for the first time since May 2011. The gains followed news on Monday that Iran halted exports to British and French companies ahead of a European Union embargo.

Jet fuel is one of the highest costs for airlines. US Airways, which does hedge its fuel consumption to offset shocks, is more vulnerable than rivals to price spikes, said Basili Alukos, an airline analyst at Morningstar.

The airline industry has been struggling to maintain stability after a years-long downturn that was exacerbated by volatile fuel prices.