Chesapeake moving jobs to Oklahoma City

Published: Friday, February 27, 2009 7:00 am By: Randy Ellis

The Oklahoman

Oklahoma City-based Chesapeake Energy Corp. Thursday announced it plans to downsize its Charleston, W.Va., regional corporate headquarters to a field office and move many of the top jobs to Oklahoma City.

"Approximately 215 of the current 255 Charleston-based positions will be either moved to Oklahoma City or eliminated, with approximately 40 positions remaining in Charleston as part of the regional field office," the company said in a news release.

Positions that will be relocated to Oklahoma City include management of Chesapeake's eastern division land, legal, accounting, information technology, geoscience and engineering departments, the company said.

"We believe that the collaboration afforded by having our teams of landmen, geoscientists, engineers and senior management working in close proximity on our Oklahoma City campus will promote quicker and improved decision-making and improve execution and responsiveness as we move forward with the nation's highest-potential drilling program," said Steven C. Dixon, Chesapeake's executive vice president -- operations and chief operating officer.

Tom Price Jr., Chesapeake's senior vice president of corporate development, said the exact number of jobs that will be moved to Oklahoma City is in flux because numerous employees are considering relocation offers.

"I think the number is going to be substantial," Price said, adding the reorganization should be completed by June 30.

Company officials cited both anticipated efficiencies and disappointment over the West Virginia Supreme Court's refusal to hear an appeal of an adverse $404 million jury verdict as factoring in the decision to move.

Chesapeake inherited a role as a defendant in a class-action lawsuit when it purchased Columbia Natural Resources in 2005 for $2.2 billion. The jury found gas companies had cheated landowners and ordered the companies to pay $134 million in unpaid gas royalties to landowners plus $270 in punitive damages.

"The reduction in our employee base in West Virginia became inevitable when we decided last year not to build our $40 million regional headquarters office complex in Charleston following the West Virginia Supreme Court's refusal to consider our appeal," said Aubrey McClendon, Chesapeake's chief executive officer. "At the time, we realized that until West Virginia's judicial system provides fair and unbiased access to its courts for everyone, a prudent company must be very cautious in committing further resources in the state.

"Even though the state Supreme Court's decision was not the primary reason for the reorganization, it did play a significant role in our decision."

Martha A. Burger, senior vice president -- human and corporate resources at Chesapeake, said the company will continue to have a strong presence in West Virginia, but "tightening credit markets and declining energy prices have dictated a reduction in capital spending and elimination of cost redundancies."

Chesapeake's Oklahoma City campus has been undergoing rapid expansion for several years and construction is continuing.

"We might be cramped for a while, but we're continuing to build and ought to be in good shape," Price said about Chesapeake's Oklahoma City headquarters' ability to absorb employees from West Virginia.

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