The Rise & Fall

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Last week the Oil & Gas industry lost one of the giants. Aside from some of the controversial things he may have done Aubrey McClendon was the face of the Shale boom. He also is the face of the Shale downturn.

 

The Rise

  • In 1989 co founded Chesapeake Energy with $50,00 & 10 employees.
  • 2008 McClendon is the highest paid CEO in the country.
  • 1993 Chesapeake was the most active driller in the country.
  • 2010 Chesapeake is second in natural gas production and have 10,00 employees.

 

Here is a quote from Gregory Zukerman, a Wall Street Journal reporter, that really is a nice summary of the rise of McClendon.  “McClendon stood out for his vision of a shale revolution as well as his comfort with heavy debt and aggressive trading.”

 

The Fall

  • 2006 McClendon bought the Seattle Supersonics, moved them to Oklahoma City, renamed them to the Oklahoma City Thunder and put them in Chesapeake Energy Arena. Seattle fans, not too happy.  
  • 2008 & 2009 stock in the company begins to plunge. Oil prices recovered fairly quickly, Chesapeake did not.
  • During the plunge instead of scaling back production McClendon kept pumping.
  • McClendon secured a $75 million payout for himself and a $12 million collection of antique maps that hung on the company’s headquarter walls.
  • Aubrey had to sell almost all of his 100,000 bottle wine collection.
  • McClendon had a run a $200 million natural gas hedge fund on the side, that his investors did not know about.
  • McClendon amassed a lot of company debt.
  • Aubrey Mclendon was forced out of Chesapeake Energy in 2013.

 

Fast forward to today. After McClendon left Chesapeake he founded American Energy Partners. AEP was and still is wildly successful. With AEP Aubrey wanted to take the fracking revolution world wide. Just last week things took a turn that no one saw coming.

 

The Justice Department had alleged that between 2007 and 2012, McClendon had colluded with another oil and gas company to secure land leases — so instead of competing with each other, the winner of the bid would simply provide an interest in the lease to another company. McClendon, who was 56, was facing 10 years in prison and $1 million in personal fines.

 

Then one day after he was indicted, Aubrey McClendon was killed in a car crash. His car went head on into a wall. McClendon denied the charges and the accident is still being investigated. 

 

What is your opinion on McClendon? Was he an Oil visionary, corrupt businessman, or a bit of both?


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