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IRS looking at Chesapeake's CEO well program-filing

Chief Executive Officer, Chairman, and Co-founder of Chesapeake Energy Corporation Aubrey McClendon walks through the French Quarter in New Orleans, Louisiana March 26, 2012. REUTERS/Sean Gardner

Chief Executive Officer, Chairman, and Co-founder of Chesapeake Energy Corporation Aubrey McClendon walks through the French Quarter in New Orleans, Louisiana March 26, 2012.

Credit: Reuters/Sean Gardner

Mon Apr 30, 2012 8:29pm EDT

(Reuters) - Chesapeake Energy Corp (CHK.N) said on Monday the Internal Revenue Service was reviewing issues related to the company's perk that grants its chief executive officer a stake in thousands of wells the company drills, according to a regulatory filing.

In a filing with the U.S. Securities and Exchange Commission, Chesapeake disclosed "the IRS is reviewing certain issues" related to its Founders Well Participation Program (FWPP) granting CEO Aubrey McClendon the right to take a 2.5 percent interest in every well the company drills.

Reuters reported on April 18 that McClendon has mortgaged his interest in those wells for at least $1.1 billion, a fact previously undisclosed to shareholders.

Since then, the program has come under the scrutiny of the U.S. Securities and Exchange Commission and the company's board of directors said they would negotiate an early termination of the plan.

Chesapeake, based in Oklahoma City, Oklahoma, said the IRS review relates to its 2008 and 2009 tax returns and the company believes "that resolution of these issues will not have a material impact on the company," the filing said.

A spokesman for the company said Chesapeake's talks with the IRS are ongoing.

(Reporting By Anna Driver; Editing by Bernard Orr and Richard Chang)
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Comments (1)
AlkalineState wrote:
This otta be good.

IRS to McClendon: “So you’re saying the ONLY wells you had a financial interest in were those wells that lost money, and the IRS actually owes you money now?”

McClendon: “Yes, that’s what I’m saying. Thousands of them. And they all lost money.”

EPA to McClendon: “Some of these wells that lost money have tens of millions in clean-up costs pending. Are you saying those are your personal wells?”

McClendon: “What Wells. Excuse me, I gotta hit the John. Hold that thought.”

May 02, 2012 4:07pm EDT  --  Report as abuse
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