Chesapeake Energy Corp. Chairman Archie Dunham’s biggest challenge may be keeping Chief Executive Officer Aubrey McClendon focused on selling $7.4 billion of assets this year to plug a widening cash-flow shortfall.

Dunham, who replaced McClendon on Thursday as chairman of the second-largest U.S. natural-gas explorer, will need to curb the CEO’s penchant for costly expansions into uncharted oil and gas fields while overseeing corporate belt-tightening under a mandate from Chesapeake’s biggest investors.

The Oklahoma native brings expertise in shedding oilfields and pipelines from his days at ConocoPhillips to a company facing a cash-flow shortfall almost twice the size of its $12.5 billion market value. A chairman with more than three decades of experience at a global oil company will strengthen a board that failed to restrain almost 20 years of overspending by McClendon, said Ed Hirs, a professor of energy economics at the University of Houston.

“They need a sober uncle or grandfather to guide the adolescent along,” Hirs said.

The company replaced more than half its board yesterday with Dunham and four other independent directors, in addition to stripping its CEO of the chairman’s role.

McClendon has been shifting some drilling away from gas to more profitable crude, and cutting thousands of jobs after outspending cash flow in 19 of the past 21 years.

Chesapeake has said it wants to sell as much as $14 billion in assets this year. Its agreement this month to sell its pipeline assets for $4 billion brought it about halfway to that goal for a total $6.6 billion in sales so far this year.

The company must sell at least $7 billion in assets this year to avoid a credit downgrade and a breach of debt covenants, Moody’s Investors Service said last month. Chesapeake also is seeking to sell its drilling acreage in Texas’ Permian Basin oil fields, and to form a joint venture for its acreage in the Mississippi Lime.

McClendon said in a March interview that he expects the Permian Basin assets to fetch at least $5 billion and that they may be sold in a few pieces rather than as a whole.

Chesapeake’s profit squeeze from gas prices that declined to 10-year lows this year was compounded by concerns that McClendon’s use of personal stakes in company wells to obtain more than $800 million in private loans conflicted with his professional duties. Investors have punished Chesapeake, driving the share price down as much as 39 percent earlier this year.

Dunham, a 73-year-old University of Oklahoma-trained engineer, isn’t new to sweeping divestiture programs or tough commodity-price environments. He’s also had his share of management missteps.

During his tenure at the head of what became ConocoPhillips, he sold pipelines, refineries, filling stations, gas-processing plants, fuel-storage terminals and a deep-water drilling rig to shore up the balance sheet.

Dunham also steered the company through two boom-and-bust cycles in the oil market, including the December 1998 collapse of U.S. crude to a 12-year low of $10.35 a barrel. When he departed ConocoPhillips in October 2004, oil had rebounded to $50 for a new record.

He collected a $26.6 million bonus in 2002 tied to the merger that created ConocoPhillips, a public filing showed. That was more than twice the size of the bonus Exxon CEO Lee Raymond received for that company’s 1999 acquisition of Mobil Corp., the biggest-ever oil industry combination.

Dunham “ran a very diversified oil and gas giant and at the time that was one of the biggest mergers in history,” said Jake Dollarhide at Longbow Asset Management in Tulsa, Oklahoma. “He’s a legend, like Aubrey, although more seasoned. He’ll bring a calming presence, some helpful perspective.”

In 1998, Dunham incorrectly predicted that the rise to power of Hugo Chavez in Venezuela posed little threat to foreign oil explorers such as Conoco that were drilling wells in the Latin American nation’s heavy-oil belt. He told the Houston Chronicle newspaper in November 1998 that prior nationalizations in Venezuela in the 1970s had been carried out “with great consideration and care” and full compensation.

That prediction proved wrong three years after his retirement, when Chavez seized the company’s assets in the country without payment, a dispute that is still being adjudicated by international arbiters.

Dunham wasn’t available for an interview, Jim Gipson, a Chesapeake spokesman, said yesterday.

McClendon, who co-founded Chesapeake in 1989 with $50,000 and 10 employees, has been criticized by investors including Dreman Value Management Inc.’s David Dreman for obscuring the line between private transactions and his corporate duties. Dunham will be expected to preside over a new era of corporate accountability, he said.

“It remains to be seen how much he will really take over the management of the company and steer the board along the lines that the large shareholders want,” said Dreman, who controls about 1 million Chesapeake shares.

In the 1990s, Dunham sought to build Conoco’s oil and gas reserves by dispatching engineers and geologists to far-flung prospects in Vietnam and the former Soviet Union at a time when the largest U.S. energy companies had dismissed domestic oilfields as largely played out.

During that period, McClendon and Chesapeake co-founder Tom Ward were among the pioneers of new drilling techniques that in the next decade brought a renaissance in U.S. oil and gas production.

Dunham needs to show he kept up to speed on developments in the oil industry since his departure from ConocoPhillips, said John Parry, an analyst with IHS Herold in Norwalk, Connecticut.

“An important question is, what’s he been doing in the interim?” said Parry, who followed Conoco during Dunham’s tenure. “He’s been out of the way for several years now. Being in retirement mode could be construed as a problem or a strong point.”

Dunham takes charge of a board reconstituted at the insistence of its two largest shareholders, billionaire Carl Icahn and Southeastern Asset Management Inc. The company agreed on June 4 to let Icahn and Southeastern pick four new directors after Icahn likened the board to a fox that had “plundered the hen house.”

Chesapeake was the worst performing stock in the Standard and Poor’s 500 Oil & Gas Exploration & Production (4O1) Index this year until Icahn’s May 25 announcement that he’d taken a 7.6 percent stake. Since then, the shares have gained more than 15 percent. Chesapeake rose 1.7 percent to $18.43 at 8:51 a.m. before the start of regular trading in New York.

The new directors are Bob Alexander, R. Brad Martin, Frederic Poses and Vincent Intrieri.

Intrieri, 55, has worked for entities associated with Icahn since 1998, including as senior managing director of Icahn Capital LP. Martin, 60, formerly was chairman and CEO at Saks Inc., the department store operator. Alexander, 78, has the same alma mater as Dunham and serves on the board of CVR Energy Inc. (CVI), which is mostly owned by Icahn. Poses, 69, is a director at Raytheon Co. and is non-executive chairman at TE Connectivity Ltd.

Chesapeake directors Richard Davidson, Kathleen Eisbrenner, Frank Keating and Don Nickles resigned.

Exxon Mobil is the largest U.S. producer of gas.