McClendon Loses Chesapeake Chair Role In Overhaul

"[The] stock price suffers because of the enormous risk associated with an ever changing business strategy, enormous capital funding gap, poor governance, and unchecked risk taking," Icahn wrote in late May letter to Chesapeake's board, adding, "[What] is important is that this pernicious funding gap, which we believe this board has created, must be filled."

At Chesapeake's shareholder meeting, Reuters reported that CEO McClendon said the company would dedicate its oil and gas focus to just 10 basins, after previously embarking on a "land grab" of shale drilling assets across the U.S. "It will be a completely different company to invest in," McClendon said.

In Thursday trading, Chesapeake shares rose slightly to $19.09. The stock has gained over 20% from levels that UBS analysts calculate Icahn bought Chesapeake Energy shares for in May. Year-to-date shares are off over 14% and over 30% in the past 12 months, amid concerns about its finances and CEO McClendon's 2.5% personal investment in almost all of the wells that the company has drilled over the years.

Underlying a board shakeup and the initiation of asset sales, it's important for investors to remember that a shoring up of the balance sheet will remain a key focus for the oil and gas company in 2012.

Moody's calculates the company needs to sell $7 billion in assets to avoid a ratings downgrade and breach of its debt covenants.

"Even $7 billion in asset sales could place Chesapeake's covenant compliance for its revolving credit facility in some doubt, and the company would still face a significant funding gap in 2013," wrote Moody's analyst Peter Speer on May 31.

For more on Carl Icahn, see his investment portfolio. For more on energy stocks, see the energy stocks bought and sold by hedge funds in the latest quarter.

See 5 ways Chesapeake Energy can be saved from itself for more on how it can initiate a share turnaround.

-- Written by Antoine Gara in New York

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