SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 1
Chesapeake Energy Corporation
________________________________________________________
(Name of Issuer)
Common Stock
_______________________________________________________
(Title of Class and Securities)
165167107
_______________________________________________________
(CUSIP Number of Class of Securities)
O. Mason Hawkins
Chairman of the Board and C.E.O.
and
Andrew R. McCarroll
Vice President & General Counsel
Southeastern Asset Management, Inc.
6410 Poplar Avenue, Suite 900
Memphis, TN 38119
(901) 761-2474
___________________________________________________________
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 7, 2012
___________________________________________
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Sections 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check
the following box: [X]
CUSIP No. 165167107 13D
_____________________________________________________________________________
(1) NAMES OF REPORTING PERSONS
Southeastern Asset Management, Inc. I.D. No. 62-0951781
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b) X
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
00: Funds of investment advisory clients
_____________________________________________________________________________
(5) CHECK BOX IF DISCOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Tennessee
_____________________________________________________________________________
:(7) SOLE VOTING POWER
: (Discretionary Accounts)
NUMBER OF SHARES BENEFICIALLY : 50,853,370 shares
OWNED BY EACH REPORTING PERSON __________________________________________
WITH :(8) SHARED OR NO VOTING POWER
: 30,045,826 shares (Shared)
: 8,955,672 shares (No Vote)
__________________________________________
:(9) SOLE DISPOSITIVE POWER
(Discretionary Accounts)
: 59,809,042 shares
__________________________________________
:(10) SHARED DISPOSITIVE POWER
: 30,045,826 shares (Shared)
: 0 shares (None)
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
89,854,868 shares
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
13.6 %
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IA
_____________________________________________________________________________
CUSIP No. 165167107 13D
_____________________________________________________________________________
(1) NAMES OF REPORTING PERSONS
O. Mason Hawkins I.D. No. XXX-XX-XXXX
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a)
(b) X
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) SOURCE OF FUNDS
00: None
_____________________________________________________________________________
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
_____________________________________________________________________________
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Citizen of United States
_____________________________________________________________________________
:(7) SOLE VOTING POWER
: (Discretionary Accounts)
NUMBER OF SHARES BENEFICIALLY : None
OWNED BY EACH REPORTING PERSON __________________________________________
WITH :(8) SHARED VOTING POWER
: None
__________________________________________
:(9) SOLE DISPOSITIVE POWER
: None
__________________________________________
:(10) SHARED DISPOSITIVE POWER
: None
_____________________________________________________________________________
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None (See Item 3)
_____________________________________________________________________________
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
_____________________________________________________________________________
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0.0 %
_____________________________________________________________________________
(14) TYPE OF REPORTING PERSON
IN
_____________________________________________________________________________
Item 4. Purpose of Transaction
The following is added to Item 4:
On May 7, 2012, Southeastern sent the letter included as Attachment I below to
Aubrey K. McClendon and the Chesapeake Energy Corporation Board of Directors.
The remainder of Southeastern's Schedule 13D filed May 2, 2012, remains
accurate and is incorporated herein by reference.
Material to be Filed as an Exhibit
Attachment I. Letter from Southeastern to Aubrey K. McClendon and Chesapeake
Energy Corporation Board of Directors dated May 7, 2012.
Signatures
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: May 7, 2012
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President and General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________
Joint Filing Agreement
In accordance with Rule 13d-1(k) under the Securities Exchange Act
of 1934, the persons or entities named below agree to the joint
filing on behalf of each of them of this Initial Schedule 13D with
respect to the Securities of the Issuer and further agree that this
joint filing agreement be included as an exhibit to this Initial to
Schedule 13D. In evidence thereof, the undersigned hereby execute
this Agreement as of May 7, 2012.
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________________________
Andrew R. McCarroll
Vice President and General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________________________
Attachment I
May 7, 2012
VIA EMAIL: Jennifer.Grigsby@chk.com
Aubrey K. McClendon
Chairman of the Board and Chief Executive Officer
Chesapeake Energy Corporation Board of Directors
c/o Jennifer M. Grigsby, Corporate Secretary
6100 North Western Avenue
Oklahoma City, Oklahoma 73118
Dear Aubrey and Board of Directors,
We urge the company to take action in three areas: debt targets, management
focus, and strategic options.
1. We do not think that managing to an arbitrary target like the "25/25 Plan"
makes sense. On the production "25," we would prefer that management
simply focus on maximizing operational cash flow after capex, instead of
going for a volume growth target and spending significantly above
maintenance capex currently to grow production to targeted levels. On the
debt "25," while we are in favor of the company reducing debt, we don't think
that management needs to be managing to a specific target there either. This
target has been twisted by some constituencies such that it is sometimes
confused with debt maturities actually coming due rather than a worthy goal.
We applaud current management efforts to do an Eagle Ford VPP, sell the
Permian assets and do a Mississippi Lime JV at a time of good oil prices. We
would also urge the company to accelerate monetizing any assets that are not
core to the E&P business (such as midstream & oil services assets) and/or any
more E&P assets which are not overly reliant on depressed spot natural gas
prices and where the company does not have a leading position. We also
believe that the company should make every effort to limit devoting
additional capital to these non-core assets. We applaud recent statements by
management that the era of large spending on new plays is over. While there
are theoretically attractive IRRs from some of the spend on midstream and oil
field services assets and we understand the appeal of vertical integration,
there are creative ways to monetize the company's already substantial
investments in these areas and share in some of this future upside without
having to use the company's balance sheet and capital spending to keep
growing the amounts devoted to these areas.
2. Our second set of concerns relates to management's focus, and the time spent
on unproductive communications. We urge management to simply put their
heads down and get the items in #1 done. Sell-side conferences, media
interviews with no hope of a fair hearing, and meetings all over the U.S. with
groups who may have only a casual interest but don't mind hearing the "story"
use valuable amounts of top management's time with no apparent benefit and
plenty of misinterpretation detriment. Trading volumes highlight that CHK
stock has far too many renters and not enough owners, so we would suggest
the current system of shareholder communications is not working.
3. The last point may be taken out of context, but is important: we urge the
board to be open to any offers to acquire the whole company. We
acknowledge that today's low market price is far below the company's net
asset value per share and would not encourage any action that would
generate a lowball bid vs. this NAV. We recognize the dangers of opening
such conversations which can sometime put a company "in play" at an
inopportune time. We therefore want to make clear that we would not
support a bid which might be a large premium to today's stock price but is
meaningfully below NAV per share. However, we also don't want to use
this large price-to-value gap as an excuse to refuse discussions with any
potential acquirers who would be willing to pay a price today that
recognizes the longer term value of the company.
/s/ O. Mason Hawkins
O. Mason Hawkins
Chairman & Chief Executive Officer
/s/ G. Staley Cates
G. Staley Cates
President & Chief Investment Officer
/s/ Ross Glotzbach
Ross Glotzbach
Senior Analyst & Principal
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SCHEDULE 13D - Chesapeake Energy Corporation ("Issuer")
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