Chesapeake Energy CEO McClendon Bets Large On Utica Shale For Growth

Chesapeake Energy CEO McClendon Bets Large On Utica Shale For Growth

Aubrey Mc Clendon, co-founder and chief executive officer of Chesapeake Energy Corporation (NYSE:CHK), revealed its next big bet in an interview with CNBC’s Jim Cramer on Mad Money. The controversial CEO told Cramer that the growth of his company and the future of the United States lies with natural gas, particularly in Utica Shale.

During the interview, Mc Clendon said, “The discovery of the Utica is a liberating experience, not only for this part in Ohio, but for all of America’s manufacturing base.

Chesapeake Energy CEO McClendon Bets Large On Utica Shale For Growth

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Energy experts estimate that the Utica Shale has 38 trillion cubic feet of recoverable natural gas. The Utica shale is a rock formation, deep underground, that stretches across the areas of New York, West Virginia, Ohio, and Pennsylvania.

McClendon believes that natural gas will become the preferred energy source for the United States, and drilling natural gas in Utica Shale would be able to help bring down the price of gas for consumers. He also believes that the abundance of natural gas would help the United States cut its dependence from imported oil.

He pointed out that the oil consumption in the country right now is the lowest in five years, and it will continue to decrease over time. According to him, the United States is in transition away from burning diesel and gasoline to natural gas, and the existing engines are becoming more efficient. He said, “We have an opportunity, if we make good decisions to lower the price of energy for all Americans.”

Mc Clendon further said, “This is the best treasure of American energy.” He projected that a wide range of machinery, which are currently powered by oil, would transform in using natural gas. As a result, oil trading will decline to $24 -$36 per barrel, and the price of gas at the pump would go down to $2 per gallon.

He also expects natural gas to lower the cost of manufacturing in the country. It will also become more efficient, which would encourage companies from different countries worldwide to move to the U.S., to accomplish their manufacturing needs.

He also emphasized that Chesapeake Energy Corporation (NYSE:CHK)’s drilling operating in Ohio is creating new and high paying jobs, which is helping the local economy and generating sales in different industries, such as airlines, hotels, and restaurants, among others.

McClendon said, “Most positions pay between $75,000 to $150,000. During the Industrial Revolution, Ohio had more millionaires than any other state – we can, once again, generate that kind of wealth creation.”

In terms of the current financial situation of Chesapeake Energy Corporation (NYSE:CHK), McClendon expressed his confidence with the new management of the company.  He said, “We have a new board and a separate Chairman – it’s been all around positive changes.”

According to him, Chesapeake Energy Corporation (NYSE:CHK) is focused in  selling assets to raise $18 billion to pay its debts, and he expects the company to achieve 20 percent growth.

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