* Lawler starts as CEO June 17
* Chesapeake shares rise 4 pct
(Adds analyst comment, background, updates shares)
By Anna Driver
May 20 Chesapeake Energy Corp on Monday
named a top executive at rival Anadarko Petroleum Corp
to head the No. 2 U.S. natural gas producer, which has suffered
a governance crisis and liquidity crunch over the last year.
Chesapeake hired Robert Douglas Lawler, senior vice
president of international and deepwater operations at Anadarko,
to fill the post vacated by co-founder Aubrey McClendon in
Shares of Chesapeake were up 4 percent as Lawler's
appointment ends a three-month search for McClendon's
Lawler, who takes over as CEO on June 17, faces a number of
challenges in his new job. Several years of low natural gas
prices and Chesapeake's heavy spending to acquire oil and gas
properties in shale formations have left the company saddled
with about $13 billion in debt.
Chesapeake has forecast a funding shortfall of $3.5 billion
this year and said it will sell up to $7 billion in assets to
help cover the expected gap between operating cash flow and
"He is coming into a company that has serious challenges,"
said Fadel Gheit, an oil company analyst Oppenheimer. It's a
mine field that he has to navigate through, but he's very
experienced and I feel he will live up to the challenge."
Lawler, 46, worked for 25 years at Anadarko and Kerr-McGee,
which Anadarko acquired in 2006. The petroleum engineer has
experience in both onshore and offshore operations and was
mostly recently responsible for big projects including
Anadarko's liquefied natural gas (LNG) project in Mozambique.
Lawler should help "to turn the page on the Aubrey McClendon
saga that has consumed the story for the past year," Wells Fargo
analyst David Tameron said in a research note and others noted
that he would bring needed capital discipline to Chesapeake.
Under the watchful eye of top shareholders O. Mason Hawkins
of Southeastern Asset Management and Carl Icahn, Chesapeake has
cut spending this year and is focusing on drilling its best
properties while producing higher quantities of more valuable
Hawkins and Icahn took control of the board last June after
McClendon was stripped of his title as chairman of the company
he co-founded in 1989.
McClendon's departure came after a tumultuous year during
which a series of Reuters investigations led to civil and
criminal investigations of the company.
Chesapeake also faces probes by the U.S. Securities and
Exchange Commission into a perk that gave McClendon a stake in
company wells, and by the U.S. Department of Justice into
possible antitrust violations over Michigan land deals.
A internal probe by Chesapeake into the land deals and the
well program found no intentional wrongdoing on the part of
McClendon, the company said in February.
Steven Dixon, Chesapeake's chief operating officer has been
acting as interim CEO. At the time of his appointment in late
March, the company created a three-person office of the
chairman, that included Dixon, Chairmen Archie Dunham and Chief
Financial Officer Domenic Dell'Osso. With the appointment of
Lawler, the office of the chairman will be discontinued, the
Oklahoma City, Oklahoma company, said.
Dunham will continue as the company's non-executive
chairman, Dixon will continue as COO and Dell'Osso remains CFO.
Anadarko spokesman John Christiansen said the company would
name a replacement for Lawler soon.
Chesapeake shares rose 82 cents to $21.09 in afternoon
trading on the New York Stock Exchange. The stock has gained 22
percent so far this year.
(Reporting By Thyagaraju Adinarayan and Maria Ajit Thomas in
Bangalore and Ernest Scheyder in New York; Editing by Sriraj
Kalluvila, Jeffrey Benkoe and Tim Dobbyn)