Chesapeake ex-CEO McClendon dies in crash

Mar 03, 2016, 1:09 PM EST
Aubrey K. McClendon, ex-Chairman and CEO, Chesapeake Energy.
Source: The Wall Street Journal's ECO:nomics Conference/flickr

Chesapeake Energy's ex-CEO Aubrey McClendon died in a car crash a day after being indicted on federal antitrust charges.

Reuters reports:

Former Chesapeake Energy Chief Executive Aubrey McClendon, a brash risk-taker who helped transform the U.S. energy industry with shale gas, died when his car slammed into an overpass on Wednesday, one day after being charged with breaking federal antitrust laws, police said. He was 56. McClendon was alone in his 2013 Chevy Tahoe when it sped into an embankment along a remote two-lane road in Oklahoma City, where it burst into flames, a police spokesman said. The cause of death will be determined later by a medical examiner, the spokesman said. The crash occurred less than 24 hours after the U.S. Department of Justice announced that McClendon had been indicted for allegedly colluding to rig bids for oil and gas acreage while he was at Chesapeake. He had denied the charges.

At a press briefing in Oklahoma City, Captain Paco Balderrama said McClendon was traveling at “well above” the 40 mile per hour speed limit before he "pretty much drove straight into the wall." He was not wearing a seat belt. “There was plenty of opportunity for him to correct or get back on the roadway and that didn't occur," Balderrama said. Industry executives and state officials remembered McClendon as a "visionary" who ushered in a new era of U.S. energy abundance by pursuing the hydraulic fracturing technology that would unlock decades' worth of domestic natural gas and oil resources. Over more than two decades, he built Chesapeake from a small wildcatter into one of the world's biggest natural gas producers before resigning in 2013, after a corporate governance crisis and investor concerns over his heavy spending.

The Wall Street Journal writes:

At one point, Mr. McClendon spent more than $2 billion leasing rights to drill beneath roughly 5% of Ohio, where he believed the gas-laden Utica Shale would be the “biggest thing to hit Ohio since the plow.” His aggressive approach drove Chesapeake to become the second-largest natural gas producer in the U.S. But his ambitions also created a mountain of debt that led to tensions with shareholders. When Wall Street funding dried up after the financial crisis, he went to Asia with Ralph Eads, a Jefferies LLC banker and college pal, to successfully sell the region’s sovereign-wealth funds on U.S. shale. It may take one to two weeks to complete an investigation into the accident, which occurred about 8 miles (13 km) from offices of American Energy Partners, the company that McClendon founded shortly after leaving Chesapeake.

CNN Money notes:

McClendon was indicted late Tuesday for allegedly conspiring to rig the price of oil and natural gas leases in Oklahoma. The Department of Justice accused him of orchestrating a conspiracy that spanned 2007 until 2012. The Department of Justice accused McClendon of abusing his power by orchestrating a "conspiracy" that squeezed oil and natural gas leaseholders in Oklahoma. The companies involved in the alleged scheme conspired to not bid against each other for the leases, violating laws that mandate competitive bidding, the DOJ indictment alleged. McClendon denied the charges against him, calling them "wrong and unprecedented." "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," he said in a statement. After learning of his death, the DOJ said in a statement that it's "saddened" to hear about McClendon's death and offered condolences to his family and loved ones.