* CEO says deeply sorry for distractions of the past two weeks
* CEO says there has been a lot of misinformation
* Shares suffer biggest 1-day fall in more than three years (Adds analyst and investor comments, updates stock price)
By Matt Daily and Anna Driver
May 2 (Reuters) - Shares of Chesapeake Energy Corp posted their largest decline in more than three years as Chairman and Chief Executive Aubrey McClendon said he was "deeply sorry" for the turmoil caused by his personal financial dealings.
McClendon is under fire over investigations by Reuters into his personal financial dealings. He characterized many of the reports as "misinformation," without elaborating.
"There's been enormous and unprecedented scrutiny of our company, and of me personally. And a great deal of misinformation has been published, and uncertainty created," McClendon told analysts on an earnings conference call on Wednesday.
Chesapeake shares were down nearly 14 percent on the New York Stock Exchange in early afternoon, the stock's largest decline in more than three years.
McClendon did not offer specifics, and analysts did not press him on the Reuters reports that showed he had taken out as much as $1.1 billion in personal loans on ownership stakes in wells the company had given to him. Analysts and academics have said those stakes posed potentially serious conflicts of interest.
On Wednesday, a new Reuters investigation found that McClendon also ran a $200 million hedge fund that was registered at Chesapeake's Oklahoma City office from 2004 to 2008 and traded in the same commodities Chesapeake produces.
"Obviously there is a lot of noise going on personally with management," said Neal Dingmann, an analyst with Suntrust Robinson Humphrey, referring to the stock decline.
Investors were also likely disappointed that the company produced more low-cost natural gas than expected in the first quarter, among other factors, the analyst said.
Chesapeake said on Tuesday it would replace McClendon as chairman and bring to an early end its controversial "Founders Well Participation Program" that gave him stakes in each of the company's wells. The program will run through June 2014, ending 18 months earlier than originally planned.
Chesapeake's largest shareholder, Memphis-based Southeastern Asset Management, will be involved in the search for a nonexecutive chairman.
"We will participate in the process of finding a new nonexecutive chairman," G. Stanley Cates, Southeastern's president, said Tuesday at his fund's shareholder meeting.
"The bottom line is, there are positives and negatives of partnering with McClendon, as with anybody, and in our opinion the positives strongly outweigh the negatives, and the negatives have been very actively addressed," Cates said.
The well program has come under the scrutiny of the U.S. Securities and Exchange Commission and the Internal Revenue Service in the wake of the Reuters reports.
McClendon, who co-founded the company, also offered a rare apology for the recent controversy.
"I am deeply sorry for all the distractions of the past two weeks. Through all of this I've learned that there was a desire for more information regarding the FWP program," he said.
Chesapeake, like other natural gas producers, has suffered as prices for the fuel have tumbled to their lowest levels in a decade as output from shale fields surged, swelling inventories even as a warm winter trimmed seasonal demand.
The company said it had curtailed natural gas production during the first quarter, and it was quickly moving to increase its output of oil and other liquids.
After the market close on Tuesday, Chesapeake reported a first-quarter net loss as it took a noncash charge based on a lower market value for its hedges. Excluding items, the company earned 18 cents a share, well short of the 29 cents expected on average by analysts.
Shares of Chesapeake were down 13.5 percent at $16.96 on Wednesday afternoon on the New York Stock Exchange. (Reporting By Matt Daily in New York and Anna Driver in Houston; Additional reporting by John Branston in Memphis; Editing by Gerald E. McCormick and Matthew Lewis)
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