Chesapeake Energy‘s (NYSE:CHK) controversial founder and head, Aubrey McClendon, announced on Tuesday that he will resign on April 1, but will remain with the company until a new CEO is located.
Investors were thrilled with the news, sending Chesapeake shares up more than 10% in Wednesday morning trading.
McClendon had been heavily criticized for purchasing an interest in drilling wells opened by Chesapeake, using money borrowed from the company to finance his acquisitions. Chesapeake lent its CEO almost $1 billion to finance these deal, the Associated Press noted. The revelations prompted Chesapeake’s largest shareholder replace the old board of directors last year. McClendon clashed with the new board members over the company’s direction.
According to the company, an internal review of the transactions did not reveal any illicit actions by McClendon while he was CEO. The report is to be released on February 21.
During the last decade, McClendon steered Chesapeake toward an ambitious program of snapping up oil and gas drilling rights. The buying spree built up an impressive portfolio of drill-able lands and mounting debt.
When natural gas prices began to drop sharply, servicing that debt became unsustainable and Chesapeake began to sell assets to raise cash.