Aubrey McClendon, the billionaire oilman who had been instrumental in launching the U.S. shale energy revolution, died in a vehicle crash in Oklahoma City on Wednesday morning.
The deluxe and leveraged life of Aubrey McClendon
The former head of Chesapeake Energy had at some point so closely intertwined his own financial interests with the company’s that the six-person unit managed his personal affairs, while his family took $100,000 holiday trips billed as business expenses.
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His death comes less than one day after McClendon, who had been 56 years old, was charged with rigging bids for oil and gas leases.
McClendon drove his 2013 Chevrolet Tahoe “at a high rate of speed” and slammed right into a bridge embankment in northeast Oklahoma City, according to Paco Balderrama of Oklahoma Police said today at press conference. The vehicle burst into flames before responders could pull McClendon’s body in the vehicle, Balderrama said.
“He virtually drove directly into the wall,” Balderrama said, according to KFOR News Channel 4 in Oklahoma City. “The data out there in the scene is the fact that he went left of centre, went through a grassy area right before colliding in to the embankment. There is plenty of opportunity for him to fix and obtain back around the roadway, and that didn’t occur.”
Police: Fmr. Chesapeake CEO McClendon "pretty much drove straight into the wall", causing motor vehicle accident that killed him.https://t.co/ygG4sEll9a
— CNBC Now (@CNBCnow) March 2, 2016
“Chesapeake is deeply saddened through the news that we have heard today and our thoughts and prayers are with the McClendon family in this hard time,” a Chesapeake spokesman said inside a statement.
McClendon’s rise in its northern border American energy arena was rapid. He started to be a towering figure in the, building Chesapeake Energy Corp. from modest beginnings to vast energy empire, because of his nimble championing of controversial hydraulic fracturing and horizontal drilling at any given time when larger, more established players were skeptical of shale’s potential. At its height in June, 2008, Chesapeake was worth US$35.6 billion.
McClendon’s not be popular only agreed to be as swift. The gas boom he helped create caused prices to crater, lowering the company’s value by over fifty percent within years. A shareholder revolt by Carl Icahn and Southeastern Asset Management Inc.’s O. Mason Hawkins cost the CEO his annual bonus and the chairmanship this year, and McClendon decided to resign in January 2013.
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He was charged Tuesday with a federal grand jury in connection with orchestrating a scheme between two “large gas and oil companies” not to bid against one another for leases in northwest Oklahoma from December 2007 to March 2012, the Justice Department said Tuesday in a statement. McClendon known as the charge “wrong and unprecedented” in a statement last night.
“I’ve known Aubrey McClendon for pretty much 25 years. He was a major player in leading the stunning energy renaissance in America. He was charismatic and a true American entrepreneur,” said T. Boone Pickens, chairman of BP Capital LLC. “No person is without flaws, but his impact on American energy will be long-lasting.”
Facing Allegations
Three years after having out of Chesapeake Energy Corp., the natural gas company he co-founded, the 56-year-old was facing allegations he caused an unidentified competitor to help keep the price of leasing drilling rights artificially low.
McClendon was accused of orchestrating a scheme between two “large gas and oil companies” not to bid against each other for leases in northwest Oklahoma from December 2007 to March 2012, the Justice Department said Tuesday in a statement. The charge is “wrong and unprecedented,” McClendon said Tuesday inside a separate statement.
After his ouster from Chesapeake, McClendon formed American Energy Partners LP and raised a lot more than $10 billion for acquisitions. With financial resources from private-equity heavyweights including First Reserve Corp. and Energy & Minerals Group, controlled by John Raymond, McClendon’s new vehicle amassed drilling rights and exploratory stakes from the Appalachian mountains to Australia and Argentina before commodity prices cut the business’s growth and restricted its access to credit.
Winning Bids
The conspirators allegedly decided in advance who’d win the leases and also the winning bidder would then allocate a desire for the leases to the other company, the federal government said.
According towards the indictment, McClendon was the chief executive officer, president along with a director of Company A until at least March 2012. Company B would be a corporation with its principal office in Oklahoma City, based on the charging document.
SandRidge Energy Inc. is the unnamed company in the indictment, according to three people acquainted with the matter. SandRidge didn’t immediately respond to a voicemail seeking comment. Tom Ward, the CEO of SandRidge throughout the period taught in indictment, didn’t immediately react to an e- mail seeking comment with no one picked up the phone at his office.
The antitrust law McClendon was accused of violating, the Sherman Act, carried an optimum prison sentence of 10 years and a $1 million fine for individuals, based on the Justice Department statement.
“I happen to be designated because the only person in the oil and gas industry in over 110 years since the Sherman Act became law to possess been accused of this crime with regards to joint bidding on leasehold,” McClendon said Tuesday in a statement. “I will fight to prove my innocence and also to clear my name.”
“I known him for many years – we have been friends for some time,” Charif Souki, former ceo and co- founder of natural gas exporter Cheniere Energy Inc., said inside a television interview with Bloomberg Wednesday. “He is most likely one of the most important persons within the shale revolution and accountable for what’s happened to the energy situation in the U.S. This really is tragic.”
– With the help of Kartikay Mehrotra and Dan Murtaugh.
Bloomberg News
