Chesapeake Energy Corp., the U.S. natural-gas producer criticized for allowing its top executive to invest in the company’s wells, prohibits other senior managers from the same practice.
Executives who oversee finance, operations and acquisitions for Oklahoma City-based Chesapeake have employment contracts that bar them from any investment or involvement in the oil and gas industry outside of their duties for the company, a review of Securities and Exchange Commission filings showed.
Under the incentive plan known as the Founders Well Participation Program, McClendon has been allowed to buy stakes of as much as 2.5 percent in most of the wells the company drilled for more than two decades. To satisfy an obligation to pay leasing and drilling costs proportionate to his stake in each well, McClendon has borrowed the cash, using his well interests as collateral.
As CFO, Dell’Osso, a former Jefferies & Co. banker who helped Chesapeake structure a series of forward gas sales prior to joining the company, is required under his employment agreement to own at least 25,000 Chesapeake shares. Dell’Osso owned 355,471 shares as of March 30, according to data compiled by Bloomberg.