Former Chesapeake CEO Aubrey McClendon dies in car accident a day after being accused of rigging Oklahoma bids

Aubrey McClendon, the billionaire oilman who was instrumental in launching the U.S. shale energy revolution, died in a car crash in Oklahoma City on Wednesday morning.

The lavish and leveraged lifetime of Aubrey McClendon

The former head of Chesapeake Energy had at one point so closely intertwined their own financial interests with the company’s that a 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 eventually after McClendon, who had been 56 years old, was charged with rigging bids for oil and natural 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 car burst into flames before responders could pull McClendon’s body in the vehicle, Balderrama said.

“He pretty much drove straight into the wall,” Balderrama said, based on KFOR News Channel 4 in Oklahoma City. “The information available in the scene is the fact that he went left of centre, went through a grassy area before colliding into the embankment. There is lots of chance of him to correct and obtain back on the roadway, which didn’t occur.”

Police: Fmr. Chesapeake CEO McClendon "pretty much drove directly into the wall", causing motor vehicle accident that killed him.https://t.co/ygG4sEll9a

— CNBC Now (@CNBCnow) March 2, 2016

“Chesapeake is deeply saddened by the news we have heard today and our thoughts and prayers are using the McClendon family during this hard time,” a Chesapeake spokesman said in a statement.

McClendon’s increase in the North American energy arena was rapid. He grew to become a towering figure in the industry, building Chesapeake Energy Corp. from modest beginnings to vast energy empire, because of his nimble championing of controversial hydraulic fracturing and horizontal drilling at a time when larger, competent players were skeptical of shale’s potential. At its height in June, 2008, Chesapeake was valued at US$35.6 billion.

McClendon’s not be popular was just as swift. The very 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 in 2012, and McClendon decided to resign in January 2013.

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Chesapeake, Encana face state criminal antitrust hearing in MichiganEncana, Chesapeake face criminal antitrust charges over accusations of collusion on oil and gas leasing in MichiganChesapeake, CEO McClendon under SEC investigation

He was charged Tuesday by a federal grand jury regarding the 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 inside a statement. McClendon called the charge “wrong and unprecedented” in a statement last night.

“I’ve known Aubrey McClendon for nearly 25 years. He was a major player in primary the stunning energy renaissance in America. He was charismatic and a true American entrepreneur,” said T. Boone Pickens, chairman of BP Capital LLC. “No individual is without flaws, but his impact on American energy is going to be long-lasting.”

Facing Allegations

Three years after being forced 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 cost of leasing drilling rights artificially low.

McClendon was charged with orchestrating a scheme between two “large oil and gas companies” not to bid against one another for leases in northwest Oklahoma from December 2007 to March 2012, the Justice Department said Tuesday inside 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 a lot more than $10 billion for acquisitions. With financial backing 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 ahead of time who would win the leases and the winning bidder would then allocate an interest in the leases to another company, the government said.

According to the indictment, McClendon was the main executive officer, president and a director of Company A until a minimum of March 2012. Company B was a corporation using its principal office in Oklahoma City, according to the charging document.

SandRidge Energy Inc. may be the unnamed company in the indictment, based on three people familiar with the problem. SandRidge didn’t immediately react to a voicemail seeking comment. Tom Ward, the CEO of SandRidge during the period covered by the indictment, didn’t immediately react to an e- mail seeking comment with no one acquired the phone at his office.
The antitrust law McClendon was charged with violating, the Sherman Act, carried an optimum prison sentence of Ten years and a $1 million acceptable for individuals, according to the Justice Department statement.

“I happen to be singled out as the only part of the oil and gas industry in over 110 years because the Sherman Act became law to possess been accused of this crime in relation to joint bidding on leasehold,” McClendon said Tuesday inside a statement. “I will fight to prove my innocence and to clear my name.”

“I known him for several years – we have been friends for some time,” Charif Souki, former chief executive officer and co- founding father of natural gas exporter Cheniere Energy Inc., said in a television interview with Bloomberg Wednesday. “He is probably probably the most important persons within the shale revolution and responsible for what’s happened to the power situation within the U.S. This is tragic.”

– With assistance from Kartikay Mehrotra and Dan Murtaugh.

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