Chesapeake Energy Corp. shares rose the most in two years after board member Archie Dunham, former chief executive of ConocoPhillips’ predecessor company, bought more than $4 million in additional stock.
Dunham purchased 2.1 million shares Dec. 21, according to a filing with the U.S. Securities and Exchange Commission, nearly doubling his position this month to more than 1 percent of the company.
“Since I’m in for long term, when I get the opportunity to buy when the whole market drops like it did over the last 10 days I decided I would be foolish not to take advantage of it,” Dunham said in a phone interview.
The company’s shares have fallen 25 percent since the end of November, cutting its market capitalization to $2 billion. Despite a recent surge in natural gas prices, the whole sector has felt the weight of falling crude prices and the broader equities rout. Chesapeake is in the midst of a strategy change, focusing more on oil production to become less reliant on gas. It agreed to buy WildHorse Resource Development Corp., a crude driller in Texas and Louisiana, in October for $2.27 billion.
Dunham is the former chief executive officer of Conoco Inc., the predecessor to ConocoPhillips. He was appointed non-executive chairman of Chesapeake in 2012 over concerns about the company’s debt and spending under then-CEO and co-founder Aubrey McClendon. Together, Dunham and Chesapeake Chairman R. Brad Martin have bought shares several times in December.
“I can’t predict the bottom. I can’t predict the top,” Dunham said. “None of us are that smart but, you know, I think I made a good purchase and I’m not going to look back,”
The driller rose 27 percent to close at $2.19 a share in New York, the biggest gain since April 2016.
Dunham isn’t worried about the majority of Chesapeake’s output being gas.
“If you are really playing the long term, I think you’re going to see a lot more natural gas liquefied and exported over the next 20 years as we build more terminals on the East Coast and the Gulf Coast,” Dunham said.