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Former Chesapeake Energy CEO dies in crash a day after price fixing indictment Former Chesapeake Energy CEO dies in crash a day after price fixing indictment
(35 minutes later)
Aubrey McClendon, the embattled former chief executive of Chesapeake Energy, died Wednesday morning in a car crash one day after he was charged with a bid-rigging conspiracy in Oklahoma, police said. Former Chesapeake Energy chief executive Aubrey McClendon, the embattled co-founder of one of America’s largest natural gas producers, died Wednesday morning in a fiery car crash one day after he was charged with an Oklahoma bid-rigging conspiracy.
McClendon, 56, crashed his 2013 Chevy Tahoe at “a high rate of speed” into a bridge overpass wall in northeast Oklahoma City just after 9 a.m., the Oklahoma City Police Department said. He died in the crash, and no other cars were involved. McClendon, 56, crashed his 2013 Chevy Tahoe at “a high rate of speed” into a bridge overpass wall in northeast Oklahoma City just after 9 a.m., police said. He died in the crash, and no other cars were involved.
McClendon, the billionaire co-founder of one of America’s largest natural gas producers and a partial owner of the Oklahoma City Thunder basketball team, was indicted Tuesday on a charge of orchestrating a scheme to rig bids for oil and natural gas leases. “He pretty much drove straight into the wall. ... There was plenty of opportunity for him to correct and get back on the roadway and that didn’t occur,” Oklahoma City Police Department Capt. Paco Balderrama said at a press conference. “It looks pretty cut and dry as far as to what exactly happened.”
Between 2007 and 2012, McClendon’s energy conglomerate and another unnamed company would agree over who would win the bids, then share an interest in the heavily lucrative leases of landowners’ oil and gas rights, Department of Justice investigators said. A federal grand jury Tuesday indicted McClendon on a charge of orchestrating a scheme to rig bids for oil and natural gas leases. Between 2007 and 2012, McClendon’s energy conglomerate and another unnamed company would agree over who would win the bids, then share an interest in the heavily lucrative leases of landowners’ oil and gas rights, Department of Justice investigators said.
“His actions put company profits ahead of the interests of leaseholders entitled to competitive bids,” DOJ Assistant Attorney General Bill Baer said. “Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”“His actions put company profits ahead of the interests of leaseholders entitled to competitive bids,” DOJ Assistant Attorney General Bill Baer said. “Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”
McClendon said in a statement Tuesday that he would fight the “wrong and unprecedented” charge. McClendon, a partial owner of the Oklahoma City Thunder basketball team, said in a statement Tuesday that he would fight the “wrong and unprecedented” charge.
“All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans,” he said. “I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name.”“All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans,” he said. “I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name.”
The energy company said Tuesday it was cooperating with investigators and had taken “significant steps to address legacy issues and enhance legal and regulatory compliance.” In 2011, the wildcatter appeared on the cover of Forbes magazine as “America’s Most Reckless Billionaire.” McClendon, who co-founded the company in the ‘80s, stepped down in 2013 amid pressure from activist investors and founded American Energy Partners, a natural gas and oil company.
In 2011, the wildcatter appeared on the cover of Forbes magazine as “America’s Most Reckless Billionaire.” McClendon, who co-founded the company in 1989, stepped down in 2013 and founded American Energy Partners, a natural gas and oil company.
McClendon was a giant figure in the shale gas and shale oil business, jumping from relative obscurity to become one of if not the biggest lease holders on shale gas prospects. By 2008, he was a billionaire as shares of Chesapeake Energy soared. But as natural gas prices sagged, his company looked overextended.McClendon was a giant figure in the shale gas and shale oil business, jumping from relative obscurity to become one of if not the biggest lease holders on shale gas prospects. By 2008, he was a billionaire as shares of Chesapeake Energy soared. But as natural gas prices sagged, his company looked overextended.
The Cheasapeake board of directors replaced him after he was found to have taken $1.1 billion in personal loans, while putting up his personal stake in the company as collateral. He also had the company sell new shares to raise money. According to a Reuters investigation, McClendon also sold a map collection to the company for $12 million. The Chesapeake board of directors replaced him as chairman in May 2012 and as chief executive in January 2013 after he was found to have taken $1.1 billion in personal loans, while putting up his personal stake in the company as collateral. He also had the company sell new shares to raise money. According to a Reuters investigation, McClendon also sold a map collection to the company for $12 million.
Much of the money he borrowed he invested in gas wells he jointly owned with the company or for real estate purchases and commodity trading. It was a risky strategy and as early as 2008, as the stock market plunged, McClendon was forced to sell more than 31 million Chesapeak shares worth $569 million to cover margin calls from lenders, according to Reuters. Much of the money he borrowed he invested in gas wells he jointly owned with the company — an unusual mingling of personal and company business — or for real estate purchases and commodity trading. It was a risky strategy and as early as 2008, as the stock market plunged, McClendon was forced to sell more than 31 million Chesapeake shares worth $569 million to cover margin calls from lenders, according to Reuters.
Earlier, McClendon revelled in his role and liked to see himself as a player on a larger stage. In an interview with The Post in July 2011, after the company had unveiled a plan to set up a $1 billion venture capital fund to promote natural gas vehicles, McClendon said it was “a downpaymt on investments that will be made to transform the American economy.” Earlier, McClendon revelled in his role and liked to see himself as a player on a larger stage. The major oil companies had passed up opportunities to push ahead on shale gas drilling — a combination of hydraulic fracturing and horizontal drilling — that unlocked vast quantities of untapped domestic oil and gas. But smaller independent companies, like Chesapeake, forged ahead early.
In an interview with The Post in July 2011, after the company had unveiled a plan to set up a $1 billion venture capital fund to promote natural gas vehicles, McClendon said it was “a down payment on investments that will be made to transform the American economy.”
“I’m 52,” he said. “I remember being in 8th grade and my parents talking about the price of gasoline doubling and when I was 16 only being able to buy gas on odd or even days. In the meantime, imports have continued to increase. There is no comprehensive plan to deal with it. And military engagements are more expensive and complicated. Before I die I’d like to imagine that American foreign policy could be dominated by concerns other than what’s happening in Libya and places like that.”“I’m 52,” he said. “I remember being in 8th grade and my parents talking about the price of gasoline doubling and when I was 16 only being able to buy gas on odd or even days. In the meantime, imports have continued to increase. There is no comprehensive plan to deal with it. And military engagements are more expensive and complicated. Before I die I’d like to imagine that American foreign policy could be dominated by concerns other than what’s happening in Libya and places like that.”
McClendon was born into the business. An Oklahoma City native, his great uncle was Robert Kerr, former Oklahoma governor and U.S. senator and cofounder of oil and gas company Kerr-McGee, according to “The Frackers” by Gregory Zuckerman. McClendon was born into the business. An Oklahoma City native, his great uncle was Robert Kerr, former Oklahoma governor and U.S. senator and cofounder of oil and gas company Kerr-McGee, according to “The Frackers” by Gregory Zuckerman. He went to Duke then returned to Oklahoma and went into the drilling business.
Thanks to pioneering drillers like McClendon, shale gas production in the United States soared from 1.3 billion cubic feet in 2007 to 13.4 billion in 2014, according to the Energy Information Administration. But natural gas prices have plunged, hovering around $2 a thousand cubic feet. Chesapeake’s stock closed Wednesday at $3.40 a share, far below its $62.39 peak in June 2008 and well below of the $30 level it nearly reached in June 2014.
Yet McClendon was already off on his new venture, American Energy Partners, following the same model of heavy borrowing to finance rapid expansion in the hope that rising prices would make it all come out right. The company’s assets included natural gas prospects from Pennsylvania’s vast Marcellus to Argentina’s Vaca Muerta basin.