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Chesapeake Energy Sold its Soul to Aubrey McClendon

By Taylor Muckerman and Joel South – Feb 28, 2014 at 9:15AM

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By granting Aubrey McClendon the right to participate in well activity, Chesapeake has tied itself to its founder for many years to come.

Aubrey McClendon isn't done with Chesapeake Energy (CHKA.Q), the company he co-founded, just yet. He vacated his role as CEO last year amid controversy over his managerial direction but has returned in the form of a stakeholder in the company's acreage. Using his pull, he is trying to get Chesapeake to drill 12 wells in the dry gas-heavy Haynesville shale in northern Louisiana. This is a bit concerning for investors for many reasons. Aside form McClendon's existing company ties, production companies like EOG Resources (EOG -3.48%) are bearish on natural gas production until 2017 or 2018. For more, tune into the short video below. 

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This segment is from Thursday's edition of "Digging for Value," in which sector analysts Joel South and Taylor Muckerman discuss energy and materials news with host Alison Southwick. The twice-weekly show can be viewed on Tuesdays and Thursdays. It can also be found on Twitter, along with our extended coverage of the energy & materials sectors @TMFEnergy.

Joel South has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool owns shares of EOG Resources. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Chesapeake Energy Stock Quote
Chesapeake Energy
CHKA.Q
EOG Resources Stock Quote
EOG Resources
EOG
$134.14 (-3.48%) $-4.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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