Natural Gas Prices Tumble, Chesapeake Shares Tank

Aubrey McClendonAubrey McClendon

Photo: OKCPS

Natural gas futures fell -4.34% on concerns of a cooler summer.July contracts for natgas declined to $2.36. It was the greatest decline in the past two months, Bloomberg said.

Meanwhile, Chesapeake Energy shares declined a massive 14.2 per cent on another bombshell report from Reuters about CEO Aubrey McClendon’s personal natural gas transactions. The wire reported that from 2004 to 2008, McClendon was an active trader in a commodities hedge fund that placed bets on natural gas prices.

On Chesapeake’s earnings call this morning, McClendon said he was “deeply sorry” about the controversies of the past two weeks and that he hoped the company’s “enhanced disclosures” of his transactions would quiet critics.

Late in the day, Southeastern Asset Management, which holds a 13% stake in the company, filed a form 13D with the SEC to assert a more active role in the company.

“…Southeastern may elect to convert a filing on Schedule 13G to a filing on Schedule 13D in order to be more active in corporate governance and management matters, and to have the ability to enter into discussions with third parties concerning proposed corporate transactions of a significant nature.¬†

“To obtain the flexibility to discuss all options, including but not limited to any of the actions or transactions enumerated in clauses a through j of Item 4 of Schedule 13D, with the Issuer’s management, Board of Directors and/or with third parties, Southeastern is hereby converting its ownership filing on Schedule 13G to a filing on Schedule 13D. Southeastern intends to discuss with management, the Board, as well as various third parties opportunities to maximise the value of the company for all shareholders.”

Reached by Business Insider, Southeastern  declined to comment on the filing.

Other natgas players that saw substantial declines included Quicksilver Resources (-8.4 per cent) and Cimarex (-3.7 per cent).

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