- Speeding car crashed and burned in Oklahoma City Wednesday
- McClendon known as innovator during long tenure at Chesapeake
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.
His death comes less than one day after McClendon, who was 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 into a bridge embankment in northeast Oklahoma City, Paco Balderrama of the Oklahoma Police Department said at a press conference. The car burst into flames before responders could pull McClendon’s body from the vehicle, Balderrama said.
"He pretty much drove straight into the wall," Balderrama said, according to KFOR News Channel 4 in Oklahoma City. "The information out there at the scene is that he went left of center, went through a grassy area right before colliding into the embankment. There was plenty of opportunity for him to correct and get back on the roadway, and that didn’t occur."
McClendon’s rise 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, thanks to his nimble championing of controversial hydraulic fracturing and horizontal drilling at a time when larger, more established players were skeptical of shale’s potential. At its height in June, 2008, Chesapeake was valued at $35.6 billion.
McClendon’s fall from grace was just as swift. The very gas boom he helped create caused prices to crater, reducing the company’s value by more than half 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 agreed to resign in January 2013.
He was charged Tuesday by a federal grand jury in connection with orchestrating a scheme between two “large oil and gas companies” to not bid against each other for leases in northwest Oklahoma from December 2007 to March 2012, the Justice Department said Tuesday in 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 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 individual is without flaws, but his impact on American energy will be long-lasting.”
Three years after being forced out of Chesapeake Energy Corp., the natural gas company he co-founded, he was facing allegations he worked with an unidentified competitor to keep the price of leasing drilling rights artificially low.
McClendon was accused of orchestrating a scheme between two “large oil and gas companies” to not 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 in a separate statement.
After his ouster from Chesapeake, McClendon formed American Energy Partners LP and raised 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 company’s growth and restricted its access to credit.
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 the other company, the government said.
According to the indictment, McClendon was the chief executive officer, president and a director of Company A until at least March 2012. Company B was a corporation with its principal place of business in Oklahoma City, according to the charging document.
SandRidge Energy Inc. is the unnamed company in the indictment, according to three people familiar with the matter. SandRidge didn’t immediately respond to a voicemail seeking comment. Tom Ward, the CEO of SandRidge during the period covered by the indictment, didn’t immediately respond to an e-mail seeking comment and no one picked up the phone at his office.
The antitrust law McClendon was accused of violating, the Sherman Act, carried a maximum prison sentence of 10 years and a $1 million fine for individuals, according to the Justice Department statement.
“I have been singled out as the only person in the oil and gas industry in over 110 years since the Sherman Act became law to have been accused of this crime in relation to joint bidding on leasehold,” McClendon said Tuesday in a statement. “I will fight to prove my innocence and to clear my name.”
“I’ve known him for many years -- we’ve been friends for a long time,” Charif Souki, former chief executive officer and co-founder of natural gas exporter Cheniere Energy Inc., said in a television interview with Bloomberg Wednesday. “He is probably one of the most important persons in the shale revolution and responsible for what’s happened to the energy situation in the U.S. This is tragic.”