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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
(about 5 hours later)
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. 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 in 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., police said. He died in the crash, and no other cars were involved. McClendon, 56, crashed his 2013 Chevy Tahoe at high 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.
“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 Capt. Paco Balderrama said at a press conference. “It looks pretty cut and dry as far as to what exactly happened.” “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 Capt. Paco Balderrama said at a news conference. “It looks pretty cut and dry as far as to what exactly happened.”
McClendon, a prominent wildcatter and champion of America’s “energy revolution,” was indicted Tuesday on a charge of orchestrating a scheme to keep bid prices low for oil and natural gas leases.McClendon, a prominent wildcatter and champion of America’s “energy revolution,” was indicted Tuesday on a charge of orchestrating a scheme to keep bid prices low 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. 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 hugely lucrative leases of landowners’ oil and gas rights, Justice Department 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,” said Bill Baer, assistant attorney general in the Justice Department’s Antitrust Division. “Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”
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. He was scheduled to appear in court Wednesday. McClendon, a part-owner of the Oklahoma City Thunder basketball team, said in a statement Tuesday that he would fight the “wrong and unprecedented” charge. He was scheduled to appear in court Wednesday.
“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.”
In 2011, McClendon 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, McClendon appeared on the cover of Forbes magazine as “America’s Most Reckless Billionaire.” McClendon, who co-founded the company in the 1980s, stepped down in 2013 amid pressure from activist investors 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 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. Chesapeake’s 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 — 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. Much of the money he borrowed he invested in gas wells that 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.
“His business practices may have been questionable, but he was the great promoter of the shale,” said J. Robinson West, a veteran energy consultant and senior adviser at the Center for Strategic and International Studies. “He was charming, energetic, and you listened to him and you just wanted to believe. The people who believed, however, did so at their cost and peril.”“His business practices may have been questionable, but he was the great promoter of the shale,” said J. Robinson West, a veteran energy consultant and senior adviser at the Center for Strategic and International Studies. “He was charming, energetic, and you listened to him and you just wanted to believe. The people who believed, however, did so at their cost and peril.”
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. Earlier, McClendon reveled 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.” In an interview with The Washington 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 eighth 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. He went to Duke then returned to Oklahoma and went into the drilling business. McClendon was born into the business. He was an Oklahoma City native, and his great-uncle was Robert Kerr, former Oklahoma governor and U.S. senator and co-founder of the oil and gas company Kerr-McGee, according to “The Frackers” by Gregory Zuckerman. He went to Duke University, 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. Thanks to pioneering drillers like McClendon, shale-gas production in the United States soared from 1.3 trillion cubic feet in 2007 to 13.4 trillion cubic feet in 2014, according to the Energy Information Administration. But natural gas prices have plunged, hovering around $2 per thousand cubic feet. Chesapeake’s stock closed Wednesday at $3.40 a share, far below its $62.39 peak in June 2008.
McClendon was already off on his new venture, American Energy Partners, following the same model of borrowing heavily to finance rapid expansion in the hope that rising prices would cover the risk. The company’s assets included natural gas prospects from Pennsylvania’s vast Marcellus Shale to Argentina’s Vaca Muerta basin. McClendon was already off on his new venture, American Energy Partners, in 2013, following the same model of borrowing heavily to finance rapid expansion in the hope that rising prices would cover the risk. The company’s assets included natural gas prospects from Pennsylvania’s vast Marcellus Shale to Argentina’s Vaca Muerta formation.
In Oklahoma City, headquarters of Chesapeake Energy’s 20-acre corporate campus, the energy giant’s name still adorns the Chesapeake Energy Arena, the Thunder’s 18,000-seat downtown stadium. In Oklahoma City, the headquarters of Chesapeake Energy’s 20-acre corporate campus, the energy giant’s name still adorns the Chesapeake Energy Arena, the Thunder’s 18,000-seat downtown stadium.
McClendon, who West said was a regular contributor to the Episcopal church and owned an extensive wine collection, could often be seen watching games from court-side seats. McClendon, who West said was a regular contributor to the Episcopal church and owned an extensive wine collection, could often be seen watching games from courtside seats.
McClendon “was the quintessential land man and promoter,” West said. “And he was brilliant at it. He saw the opportunity and he ran with it, but somebody else got screwed.”McClendon “was the quintessential land man and promoter,” West said. “And he was brilliant at it. He saw the opportunity and he ran with it, but somebody else got screwed.”