The gas company that has been front and center in the Marcellus shale gas play recently had the dubious honor of being named one of the 50 least trustworthy companies in America by financial blog 24/7 Wall Street.
The list, based on a report by research firm Audit Integrity, reflects the companies with the least transparent practices in disclosing financial information.
“Least Trustworthy” refers to companies that have accounting and governance practices that pose risks to the company – and as a result, to shareholders. These practices include whether financial results may be misrepresented in public disclosures. According to Audit Integrity, “Accounting and governance practices have been shown to be highly predictive of negative events such as SEC enforcement actions, class action shareholder litigation and severe stock loss.”
In other Chesapeake news, CEO Aubrey McClendon announced at the company's annual shareholder meeting that he wants to get into the business of horizontal drilling for oil. With natural gas prices in a slump, he says, oil is looking better every day:
“We’re paid to make money for shareholders, and right now ... we’re going to be paid three to four times more for finding the oil” than for finding natural gas, he said. “I don’t foresee the company becoming an oil company, but I do believe that our oil production can increase to a level to where our revenues are balanced. That’s our goal.”
Chesapeake’s stock closed Friday at $24.64, up 23 cents.
McClendon said Chesapeake decided within the last two years that the horizontal drilling technology it has used to extract natural gas from shale formations could also be used to extract oil from areas previously thought to be unfavorable to drilling. That helped change McClendon’s long-held belief that the era of new North American onshore oil finds had ended.
