Worried about the collapsing price of natural gas, Boone Pickens recently sold his entire stake in Chesapeake Energy, he told CNBC during an exclusive interview at the SALT alternative-asset conference in Las Vegas.
Pickens, who manages a $140 million energy-focused equity fund as part of his investment firm BP Capital, held about $13 million worth of Chesapeake shares, which made up 9 percent of BP’s equity portfolio as of late December, according to a recent filing. But Pickens told CNBC he sold that position in the last few months as the price of gas spiraled below $2.
The surprise disclosure comes at an uncomfortable time for Chesapeake, whose shares have plummeted amid revelations that CEO Aubrey McClendon accepted loans from a private-equity firm that was also lending to Chesapeake in order to finance his investments in some of the company’s wells.
In addition, reports have surfaced that for at least four years McClendon ran a hedge fund that traded natural-gas derivatives while also acting as CEO of Chesapeake. In the wake of those revelations, McClendon was stripped of his role as chairman and forced to terminate his well-participation agreement early.
Pickens, a longtime friend of McClendon, said in the Las Vegas interview with CNBC that “I don’t like the position he’s in.”On top of the recent headlines, McClendon “is spending more than his cash flow, he’s done that for ten years,” Pickens said.
But Pickens “wouldn’t count Aubrey out,” he added, saying that he thought Chesapeake’s planned asset sales were wise moves and that the company could be headed for better times. McClendon, he said, “is a good friend” and “has done some innovative things.”
A Chesapeake spokesman declined to comment on the stock sale.
-By CNBC's Kate Kelly
Follow Kate Kelly on Twitter: @katekellycnbc