April 19 (Bloomberg) -- Chesapeake Energy Corp. will pay $11.1 million in cash to former Chief Executive Officer Aubrey McClendon under a termination agreement as he seeks to build a new energy explorer.
The terms of the agreement entitle him to a 28.125 percent interest in a Citation X aircraft through the end of 2016, the Oklahoma City-based company said in a filing with the U.S. Securities and Exchange Commission today. McClendon also retains the right to entertain friends and clients in the company-owned suite during Oklahoma City Thunder professional basketball games and exercise at the health club on the company’s campus.
McClendon, 53, stepped down on March 29 after a shareholder revolt led by Carl Icahn and Southeastern Asset Management Inc. In an April 16 e-mail to industry contacts, McClendon announced he has formed American Energy Partners LP, an Oklahoma City-based enterprise that he wants to build into a “substantial” exploration and production company.
“I will be looking for deals with a lot of drilling left on them and will also consider undeveloped acreage,” McClendon wrote in the e-mail, first reported yesterday by The Oklahoman newspaper. “I am not scared of natural gas.”
McClendon didn’t respond to requests for comment about his new company.
McClendon was stripped of his chairmanship and stepped down as CEO after questions were raised about his use of personal stakes in company-owned wells to obtain more than $800 million in private loans. A board review of the transactions cleared him of any intentional wrongdoing in February.
The company today reiterated that McClendon still will buy stakes in every well Chesapeake drills before June 30, 2014. McClendon’s compensation declined by 5.5 percent in 2012 to $16.9 million, Chesapeake said in a separate filing today.
The man who was ranked 389th in Forbes magazine’s list of the wealthiest Americans last year began his career as a “land man,” acquiring drilling rights for properties that may hold oil or gas. He formed Chesapeake with Tom Ward, now the CEO of SandRidge Energy Inc., with a $50,000 investment in 1989.
Thomas S. Price, Chesapeake’s senior vice president for corporate development, will work with McClendon at the new venture, Price told The Oklahoman in an interview this month. Price’s departure was announced the same day the company said Henry Hood, senior vice president for land and former general counsel, will be leaving.
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