May 20 (Bloomberg) -- Chesapeake Energy Corp., the second-largest U.S. natural gas producer, said former Anadarko Petroleum Corp. executive Robert Douglas Lawler will become chief executive officer effective June 17.
Lawler, 46, will also join the board, the Oklahoma City-based company said in a statement today. Lawler was senior vice president of international and deep-water operations at Anadarko. Upon his arrival, the company will discontinue the office of the chairman, a three-man unit set up while Chesapeake searched for a new CEO.
Lawler will be expected to spend money carefully and keep costs from escalating, strengths demonstrated by Anadarko, investment bank Tudor Pickering Holt & Co. said in a note this morning to clients.
“We believe there is a substantial wall to climb given the balance sheet leverage and need to materially sell assets” into a weak market, the note said.
Chesapeake is seeking to raise as much as $7 billion this year from asset sales to cover a cash-flow shortfall and reduce debt. The company has outspent cash flow for most of the past two decades as it amassed prospective gas and oil fields faster than it could afford to drill wells.
“This should be viewed as a positive addition,” Scott Hanold, an RBC Capital Markets LLC analyst based in Minneapolis, wrote today in a note to clients. Lawler “performed well” at Anadarko, wrote Hanold, who rates Anadarko the equivalent of a buy and Chesapeake the equivalent of a hold. Anadarko is based in The Woodlands, Texas.
“His hiring is indicative of the depth of our talented team, and we expect to name his replacement soon,” John Christiansen, a spokesman for Anadarko, said today in an e-mail.
Chesapeake rose 2.6 percent to $20.80 at the close in New York.
Chesapeake co-founder Aubrey McClendon, 53, stepped down as CEO last month after a shareholder revolt by Carl Icahn and Southeastern Asset Management Inc. A board inquiry into McClendon’s use of personal stakes in company-owned wells to obtain more than $800 million in private loans cleared him of any intentional wrongdoing.
“The board is confident that Doug’s deep technical upstream and engineering expertise as well as his strategic and financial skills will serve Chesapeake well,” Chairman Archie Dunham said in the statement.
The office of the chairman had consisted of Dunham, interim CEO Steven Dixon and Chief Financial Officer Domenic Dell’Osso. Dixon will resume his role as chief operating officer and the other two will return to their former positions, the company said.
Exxon Mobil Corp., based in Irving, Texas, is the largest U.S. producer of natural gas.
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