Lessons from Bob Simpson’s $100 million cashout at XTO

CEO Bob Simpson earned about $100 million from the sale of nearly 2.8 million shares of XTO early last week, as he raced to beat the meltdown of the market and his stock.

Here’s what we can learn from his actions:

• Simpson is less of a risk taker, or, certainly, less stubborn, than Chesapeake Energy CEO Aubrey McClendon, who was forced to liquidate his 33-million-share stake in his company because of margin calls at the end of the week.




• The Dallas-Fort Worth region, so far largely immune from the national economic downturn, will now join the slump. XTO, based in Fort Worth, and Chesapeake, based in Oklahoma City, are major players in the Barnett Shale of North Texas. The natural gas boom has cooled, for now.




• The heirs of H.L. Hunt displayed almost perfect timing in selling Hunt Petroleum to XTO for $4.2 billion in cash and stock in June. Old H.L. is smiling.




• Fundamentals rule. Yes, panic in world markets played a role at XTO and Chesapeake. But domestic supplies of natural gas are in close balance to demand, meaning prices won’t long support overly ambitious drilling plans. In some ways, Simpson and McClendon were too successful in figuring out how to coax natural gas from all of these shale formations around the country.

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• Did H.L. Hunt heirs get full value for Hunt Petroleum? - June 23, 2008
• Chesapeake Energy and Aubrey McClendon, masters of the power play - July 9, 2008
• Shades of 1929 for Chesapeake’s Aubrey McClendon - October 11, 2008
• Swift Boat moneymen still trying to shape public policy - July 17, 2008
• Chesapeake Energy accused of giving CEO ‘personal’ bailout - April 29, 2009
• H.L. Hunt heirs battle over trust funds - November 12, 2007
• Aubrey McClendon is top search on Muckety - October 19, 2008
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