Frac’ing the Gates of Hell? Billionaire Ex-Chesapeake CEO Aubrey McClendon dies in crash day after Federal Grand Jury Indictment. “His goal was to take the fracking revolution worldwide. … He was always looking for worlds to conquer”

Special Report: The final days and deals of Aubrey McClendon by John Shiffman, Luc Cohen and Heide Brandes in Oklahoma City, Brian Grow in Atlanta, Joshua Schneyer in Los Angeles, Ernest Scheyder, Liz Hampton and Terry Wade in Houston and Michael Flaherty, Michael Erman, Jessica Resnick-Ault and Mike Stone in New York, March 14, 2016, Reuters

OKLAHOMA CITY (Reuters) – The night before Aubrey McClendon died, the oil-and-gas pioneer was expected at a private dinner here with potential business partners. Among them: Vicente Fox, the former president of Mexico.

Around sunset, the group gathered in a wood-paneled dining room at the exclusive Beacon Club. A waiter brought plates of sea bass and lamb. Three bottles from McClendon’s wine collection were opened, including a 2010 Napa Valley red bearing the logo of his business, American Energy Partners.

But McClendon, who reveled in his reputation as the life of the party, never showed, said four people who were there.

The group soon learned why. U.S. prosecutors had just announced McClendon’s indictment for allegedly conspiring with a competitor to suppress land prices by rigging bids while leading his former company, Chesapeake Energy. People at the dinner said McClendon sent an emissary and his regrets. Fox and others signed the empty wine bottles, intending to present them to McClendon the next day.

They never had the chance.

McClendon died the following morning, March 2, when his car crashed at high speed into an overpass wall along a two-lane road here. The accident remains under investigation

The sudden end to his lavish and leveraged life (http://reut.rs/1QUfnHp) came as McClendon, 56, confronted challenges more consequential than any he had faced before. He’d been forced to part with oil and gas-well interests, one of his best sources of cash. His biggest investor was abandoning him. He had just agreed to settle a legal claim that chipped at his reputation. And now, with the indictment, a protracted legal battle for his personal freedom loomed.

A Reuters review of records and interviews show:

* McClendon no longer controlled the bulk of his most bankable venture, the one that helped make him a billionaire while he was CEO of Chesapeake: his stake in thousands of company oil and gas wells awarded to him during his tenure. Records show he was in the process of transferring the last of these interests to a company controlled by a close friend, Clayton Bennett of Dorchester Capital.

* His largest investor was halting all new business with him. The backer, Energy & Minerals Group of Houston, informed its investors just before his death that McClendon no longer held any leadership roles in related firms.

* McClendon had recently reached an undisclosed, tentative agreement to pay at least $3 million to Chesapeake to settle a legal dispute in which his former company had accused him of taking confidential data with him when he left in 2013 to set up his new company.

* By fighting the U.S. criminal indictment, he faced a potential public airing of his business tactics. McClendon’s own emails were expected to represent the bulk of the government’s evidence against him, say two people familiar with the matter.

HIGH-LEVEL JUSTICE MEETINGS

McClendon knew he was under criminal investigation: AEP disclosed in a filing last year with U.S. securities regulators that the Justice Department was investigating him over the potential antitrust violations. His former company, Chesapeake, has been cooperating with authorities in return for “conditional leniency” from the Justice Department. As a result, Chesapeake has said, the company did not expect to face prosecution or penalties.

But the indictment caught McClendon off guard, according to people familiar with the matter.

His legal team had met with senior Justice Department prosecutors three times in late 2015 to try to persuade them not to indict McClendon, a person familiar with the matter said. McClendon had been expecting a response; instead, he was indicted without warning, the person said.

Reflecting the gravity of the probe, last fall McClendon hired famed trial attorney Abbe Lowell, who has represented politicians, lobbyists and entertainers in trouble. Among his past clients: former U.S. presidential candidate John Edwards and rap star Sean “Diddy” Combs. Lowell was chief counsel for the defense during President Bill Clinton’s impeachment trial in the U.S. Senate.

In December, McClendon’s lawyers gave a PowerPoint presentation to Assistant Attorney General Bill Baer at the Justice Department in Washington, two people familiar with the matter said.

Lowell told Baer that McClendon’s prosecution would be a first of its kind in the oil and gas industry, said a person familiar with the exchange. Lowell argued that cooperation in the industry through joint bidding ventures is common and perfectly legal. An indictment, he told the Justice officials, would mark an unfair application of criminal antitrust laws to the sector.

Part of the discussion focused on emails between McClendon and former SandRidge Energy chief executive Tom Ward, in which the two longtime friends discussed coordinating bids on energy acreage. The emails relate to a handful of deals the two men discussed among many innocuous transactions, two people familiar with the matter said.

Lawyers haggled over the intent of the messages between the two men, with McClendon’s side arguing that what some people might consider a conspiratorial tone could instead be read as two professionals trying to work out a legitimate agreement to efficiently develop an area through joint ventures.

A person familiar with the investigation countered that assertion, saying the emails between McClendon and Ward “are direct as they can possibly be.” Though the indictment doesn’t cite specific evidence, it alleges that the two men consummated the proposed rigging of bids.

Ward hasn’t been charged with any wrongdoing. Spokesmen for Ward’s new company, Tapstone Energy, and for Chesapeake did not return calls for comment. SandRidge and a Justice Department official declined to comment. AEP’s chief legal officer, Tom Blalock, did not respond to requests for comment.

During the Justice Department meeting, a person familiar with the discussion said, McClendon’s lawyers also argued that his contributions to the city, state and national economy should be taken into account. They expressed concern about the harm an indictment might cause to AEP, SandRidge, their employees, the Oklahoma City community and the natural gas industry. Baer asked questions, two sources said, and requested more information.

The day after McClendon died, prosecutors filed a motion to dismiss the indictment. But officials said their investigation of potential antitrust violations in the oil and gas industry is continuing.

QUESTIONS IN OKLAHOMA

In 2012, Reuters reported in a series of articles that McClendon enjoyed controversial perks at shareholder expense, operated a secretive, $200 million hedge fund from inside Chesapeake’s offices, and received as much as $1.4 billion in loans against his well interests. In response to the news, his board stripped him of his chairmanship, and he resigned in 2013 to start AEP.

Some energy executives who did business with McClendon say they are puzzled by the charge that he conspired to suppress land prices. Brandt Temple, CEO of Sunrise Exploration in New Orleans, is one of them. Temple was negotiating a deal with McClendon that was supposed to close the day of the deadly crash.

… But emails published by Reuters in 2012 showed that McClendon had indeed tried to suppress land prices elsewhere. In one, McClendon wrote to a rival energy executive [at Encana] that it was time “to smoke a peace pipe” together “if we are bidding each other up.” In another, he wrote: “Should we throw in 50/50 together here rather than trying to bash each other’s brains out on lease buying?”

The Michigan Attorney General investigated, and last year Chesapeake settled criminal antitrust, fraud and racketeering charges, paying $25 million to a victims fund. Chesapeake pleaded no contest to one count each of attempted antitrust violation and false pretenses, both misdemeanors.

FLAGS AT HALF-STAFF

 

… In the March 2 edition of the hometown paper, The Oklahoman, McClendon’s indictment was played bigger than the local results in the previous day’s Super Tuesday U.S. presidential nominating contest, featuring upset wins by Senators Ted Cruz and Bernie Sanders.

His death dominated the next day’s front page and accounted for almost four full pages inside. A columnist wrote that if Oklahoma City ever chisels its own Mount Rushmore, “Aubrey is on it.”

For nearly a week following his death, flags flew at half staff at banks, churches and energy businesses. Stores near the Chesapeake campus closed so employees could attend the funeral, which was held in a mega-church and drew a standing-room crowd of more than 3,000.

Several hundred mourners also attended a sunrise memorial Saturday. They included Brant Briggs, an usher at Chesapeake Arena, who served McClendon and his old friend and fellow Thunder owner, Bennett, in their side-by-side front-row seats. “He had such a kind, generous heart,” Briggs said. “He will be missed by so many people.” The Thunder honored McClendon with a pregame ceremony this Wednesday that included video from his introduction into the Oklahoma Hall of Fame.

McClendon’s style wasn’t for everyone, acknowledged his friend and former Chesapeake executive Mike Stice, who attended the dinner at the Beacon Club the night of the indictment.

“He was a risk taker beyond most people’s comfort level,” Stice said.

Many people in Oklahoma are talking about the possibility that the car crash wasn’t an accident – that a despondent McClendon may have taken his own life. His family hasn’t commented on this talk, but at his funeral, his children spoke of his sunny optimism. Other people close to him dismissed the idea of suicide, saying the man they knew projected a positive, seize-the-day attitude.

They also noted that he’d withstood adversity before. In 2012, after Chesapeake removed him as chairman, he bucked up employees at a town-hall-style meeting, according to a recording.

“It ends by winning, at the end of the day, delivering on what you are doing, what you believe in and what you will continue to do,” he told the staff. “You just have to outlast it.”

Tom Price, who worked for McClendon for more than 20 years, described him as “the toughest guy I ever met. The notion that Aubrey in any way, shape or form (might) bring his life to an end voluntarily is insane.”

Several friends in Oklahoma City noted that McClendon had recently become a grandfather. As was his custom, every morning he sent AEP employees a quote of the day. On the day his grandchild was born, he wrote, “A baby is God’s opinion that life should go on.”

CASH CRUNCH

The indictment says the bid-rigging conspiracy started on Dec. 27, 2007, a time when the energy tycoon’s career was about to accelerate. Chesapeake’s share price closed at $39.12 that day, on its way to an all-time high of $69.40 six months later. The company was amassing drilling rights that would grow to more than 14 million acres, nearly the size of West Virginia.

In the first year of the alleged criminal conspiracy in Oklahoma, Forbes magazine put McClendon’s net worth at $3 billion. In 2012, he dropped off the Forbes 400 list of richest Americans. The magazine’s new estimate: McClendon had a net worth of $500 million.

As oil and gas prices tumbled over the past 18 months, eroding his wealth, McClendon scrambled to raise cash.

In the month before he died, for example, McClendon asked close friends and family members from whom he’d raised money before if they would like to invest again, two people familiar with the situation said. One of these people had participated in an investment round with individual buy-ins of between $50,000 and $100,000 for energy assets in the so-called Utica shale formation in the U.S. Northeast. The person said he turned down the offer this time because he had lost his job in the oil and gas bust.

In late October, property records and creditor filings show, McClendon staked many of his personal assets as collateral for loans – including his 19 percent stake in the NBA team, property in Oklahoma and Connecticut, antique boats and investments in privately held companies. Some assets had previously been pledged as collateral to other lenders.

McClendon was dipping into his depleted assets to prop up AEP, his new company. Records filed in Oklahoma County Court show that McClendon and an AEP unit called Scoop Energy put up collateral for a loan to Scoop from investor Oaktree Capital. McClendon was personally guaranteeing the loan to Scoop, according to a person familiar with the matter. Oaktree declined to comment.

Another foundation of McClendon’s wealth was under pressure. For many years, he was able to raise cash thanks to an unusual incentive he enjoyed from Chesapeake. The perk, known as the Founder Well Participation Plan, granted McClendon up to a 2.5 percent stake in every well drilled by Chesapeake during his 24-year tenure.

When McClendon left Chesapeake in April 2013, he held onto his well interests through four companies he controlled. As Reuters reported in 2012, mortgage records show that McClendon had borrowed as much as $1.4 billion through those companies by pledging the Chesapeake well interests as collateral.

But as oil and gas prices fell, the cost of operating the wells began exceeding the returns McClendon got from the hydrocarbons they produced. Unable to keep up, he eventually lost control of three of the firms – and thus of any future cash they would generate. Control passed to one of his lenders, EIG Global Energy Partners, a Washington, DC-based private equity firm, Oklahoma County records show. A spokesman for EIG declined to comment.

He gave up another juicy holding last year, the filings show. Arcadia Resources, McClendon’s oldest means of financing his Chesapeake well interests, transferred its assets to Dorchester Resources, controlled by Bennett, his close friend. Bennett did not return a request for comment.

Another setback hit McClendon the morning that he died – the announcement by EMG that it would cease new investments. This was a major blow: EMG had invested $3 billion with McClendon. Now the $17 billion fund was done with him.

In a letter sent hours before the crash, EMG informed its investors that, as of Feb. 26, McClendon was no longer the CEO or a board member of any EMG portfolio company. The letter also pointed to concerns about McClendon’s indictment.

“These are serious allegations that have been made against McClendon (and could have equally serious implications across the industry) and EMG takes this matter very seriously,” managing partner John Raymond wrote.

An EMG spokeswoman did not respond to requests for comment.

It’s unclear whether McClendon had been informed of the letter’s content before it went out. But the end of McClendon’s collaboration with EMG removed one of his main sources of capital to find and develop land.

McClendon faced at least one more looming debt.

According to three people familiar with the matter, he had tentatively agreed to settle a claim by Chesapeake alleging that he took confidential oil-and-gas-related data with him when he left the company and used the information when he started AEP. AEP has called the claim “meritless.” McClendon too had denied the accusation, and the case was about to be resolved in arbitration. The sources said McClendon, as founder and principal of AEP, had recently agreed to pay Chesapeake more than $3 million.

“WE MAY NEVER KNOW”

When the Justice Department announced the indictment March 1, it also issued a statement strongly critical of McClendon.

“Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions,” wrote Baer, the Assistant Attorney General.

 

McClendon’s movements the next morning could not be confirmed. Three people who received emails from him said the messages revealed nothing amiss.

“He was unfazed,” said one recipient, Franco Hamdan of EIM Capital, who’d attended the Beacon Club dinner the night before as the business partner of former Mexican President Fox. “He was determined and well on his way to make a global shale revolution in Australia, Mexico and Argentina.”

Shortly after 9 a.m., McClendon drove his Chevy Tahoe north along Midwest Boulevard, a two-lane country road. He likely knew the route well: It is a scenic drive from AEP’s offices to Pops, a soda-and-burger joint he opened beside a futuristic gas station on Route 66.

“He loved navigating back roads,” son Will McClendon said at the funeral. “He was definitely not a Google Maps kind of guy.”

McClendon was also known for driving fast and without a seat belt.

Beneath a bridge for Interstate 44, Midwest Boulevard narrows slightly. Police have said McClendon was speeding as he approached the bridge, well in excess of the 50 mph limit. His SUV crossed the yellow dividing line and directly hit the western bridge support. Dispatchers took the first in a series of emergency calls at 9:12 a.m.

“It looks like a Tahoe and it looks pretty rough…”

“The cab is completely crushed…”

“That vehicle just exploded….”

Oklahoma City authorities have said McClendon likely died instantly from the collision. Authorities said they intend to release a full report on the accident next week.

“As to his state of mind, we know how it happened, but not why it happened,” said Oklahoma City Police Captain Paco Balderrama. “Someone under so much pressure: Maybe he didn’t get enough sleep. Is it possible he dozed off? It is possible he suffered a medical emergency? Why did it happen? We may never know.”

FINAL DEAL

McClendon’s security team at AEP called police at about 10 a.m. to report him missing.

A short while later, Temple, the New Orleans energy executive, checked his bank account online, expecting to see a payment. AEP and McClendon had agreed to buy mineral rights in Oklahoma from Temple’s Sunrise Exploration for an undisclosed amount. The deal was scheduled to close at noon.

Noon came and went. No payment.

Suddenly, Temple recalled, emails flooded in. Before he could read them, he answered a call from a childhood friend.

“Did you see what happened to Aubrey?”

“Yeah,” Temple said. “He got indicted.”

“No, he’s dead.”

Temple said he felt goose bumps, then sadness.

The next day, the money came through. AEP had honored what may have been Aubrey McClendon’s final deal. [Emphasis added]

(Reporting by John Shiffman, Luc Cohen and Heide Brandes in Oklahoma City, Brian Grow in Atlanta, Joshua Schneyer in Los Angeles, Ernest Scheyder, Liz Hampton and Terry Wade in Houston and Michael Flaherty, Michael Erman, Jessica Resnick-Ault and Mike Stone in New York.)

Police: Gas pedal floored before McClendon crashed at 78 mph by Daniel C. Houston, The Associated Press, March 13, 2016, Calgary Herald

OKLAHOMA CITY – Chesapeake Energy founder Aubrey McClendon had the gas pedal floored in his SUV moments before it slammed into a bridge support at 78 mph earlier this month, police said Monday.

McClendon tapped his brakes multiple times before impact, but not enough to slow his vehicle significantly, Oklahoma City Police Chief Bill Citty said at a news conference. There was no evidence McClendon tried to veer away or brake completely before impact.

Citty wouldn’t say whether he thinks the former Chesapeake CEO intended to crash or had full control of his Chevrolet Tahoe.

“We’re not going to speculate. We don’t know what was going through his mind at the time. We don’t know what was going on in the cab of that vehicle,” Citty said.

McClendon died March 2, a day after a federal grand jury indicted him on a bid-rigging charge. The part-owner of the NBA’s Oklahoma City Thunder had vowed to fight the accusation.

The vehicle’s data recorder showed McClendon was driving 88 mph and then tapped his brakes, but not enough to significantly reduce speed. As far as police could tell, the brakes were fully operative, Citty said. Police have said previously the speed limit on the isolated road in northeast Oklahoma City was 50 mph.

McClendon had his gas pedal floored until 1 1/2 seconds before impact, when he reduced it from 99 per cent to 25 per cent depressed, the police chief said.

McClendon was not wearing a seat belt at the time of the crash, although at that speed it wouldn’t have mattered if he had, Citty said.

Investigators found tire tracks but no skid marks. Police are checking McClendon’s cellphone records to determine if he was on the phone.

The medical examiner’s office said previously that McClendon died from multiple blunt force trauma, but it has yet to reveal the official manner of death or the toxicology test results, which usually take four to six weeks to complete.

The Tahoe simmered after the collision before it caught on fire, a witness told police.

Medical examiners identified McClendon’s body using dental records, spokeswoman Amy Elliott said. The body retrieved from the burning vehicle was unrecognizable, Citty said. [Emphasis added]

Department Of Justice To File Motion To Dismiss Case Against Aubrey McClendon by Grant Hermes, March 3, 2016, News9

OKLAHOMA CITY – The U.S. department of Justice is expected to file a motion to dismiss the case against former Oklahoma City Energy icon Aubrey McClendon, according to First Assistant Bob Troester.

The dismissal is expected to be filed Wednesday afternoon.

Troester said he expects the motion to be granted, due to McClendon’s death Wednesday morning.

Investigations into ex-Chesapeake CEO’s death could take months, officials say by The Associated Press, March 03, 2016, The Globe and Mail

State officials say investigations into the death of energy magnate Aubrey McClendon in a fiery single-car crash in Oklahoma City could take months to complete.

Oklahoma City Police Sgt. Ashley Peters says a probe of Wednesday’s crash likely will take up to two weeks, while the state medical examiner’s office says an autopsy investigation could take as long as three months.

Police say McClendon’s Chevrolet Tahoe slammed into a concrete embankment and burst into flames, killing the 56-year-old energy company CEO.

Several passing motorists called 911 shortly after 9 a.m. Wednesday to report a vehicle on fire at an underpass beneath Interstate 44 in northeast Oklahoma City.

McClendon had been indicted just hours earlier by a federal grand jury on charges of gas-lease bid rigging.

OBITUARY: Shale impresario Aubrey McClendon dies on heels of indictment by Mike Lee, Saqib Rahim and Mike Soraghan, E&E reporters, with contributions by Ellen M. Gilmer, Thursday, March 3, 2016, E & E News

Aubrey McClendon, the larger-than-life co-founder of Chesapeake Energy Corp. who was a leader of the American oil and gas renaissance, died yesterday in a fiery car crash, less than a day after the Justice Department announced he had been indicted on federal antitrust charges.

McClendon was at the wheel of a 2013 Chevy Tahoe that crossed the center line of a road in Oklahoma City and crashed into a bridge support just after 9 a.m. local time yesterday, Capt. Paco Balderrama of the Oklahoma City Police Department said in a videotaped news conference. The Tahoe was engulfed in flames (E&ENews PM, March 2).

“He pretty much drove straight into the wall,” Balderrama said. “There was plenty of opportunity for him to correct or get back on the road, and that didn’t occur.”

The accident happened on the day McClendon’s hometown newspaper announced his indictment in a banner headline.

The Justice Department said McClendon worked with another, unnamed company for five years to hold down the price of oil and gas leases on land in northwest Oklahoma. The two companies agreed not to bid against each other, and the winning company would assign an interest in the leases to the other company (EnergyWire, March 2).

McClendon denied the charges Tuesday in a statement.

“Anyone who knows me, my business record and the industry in which I have worked for 35 years, knows that I could not be guilty of violating any antitrust laws,” he said.

The violations could have carried a $1 million fine and up to 10 years in prison. Early yesterday, Reuters reported that one of McClendon’s financial backers, the Energy and Minerals Group, would “cease any and all new business activities” with him.

McClendon was hailed as a pioneer, whose early focus on oil and gas from shale formations helped transform the energy business. He funded a Washington, D.C., trade group that tried to position natural gas as an environmentally friendly fuel, gave generously to politicians and even helped shape professional sports when he led a group that moved the Seattle SuperSonics basketball team to Oklahoma City.

“Aubrey helped put in motion our nation’s push toward energy independence,” Oklahoma Independent Petroleum Association President Mike Terry said in a statement.

He also was dogged by consistent complaints about overaggressive business practices, profligate spending and a lack of concern about the environmental impact of drilling. He was ousted as Chesapeake’s chairman and CEO by activist investors, including Carl Icahn, amid an outcry over his unusual perks and side deals with Chesapeake’s lenders (EnergyWire, April 2, 2013).

“He was definitely a lightning rod for the industry,” said Mark Hanson, an analyst with Morningstar Inc. “It’s arguable that without some of his foresight, it may not have happened to the degree that it did. But he did so, and sometimes in a pretty reckless manner, using borrowed money.”

Aubrey Kerr McClendon was born into a prominent family in Oklahoma City. His great-uncle, Robert Samuel Kerr, was an oilman and founder of Kerr-McGee Corp., as well as a U.S. senator and governor of Oklahoma. McClendon once said he grew up talking politics and public policy at family gatherings because of his great-uncle.

McClendon studied history at Duke University and spent his early years as a petroleum landman — an agent who negotiates drilling rights with landowners. In 1989, McClendon formed Chesapeake with Tom Ward, using $50,000.

Ward left Chesapeake in 2006 to start his own company, SandRidge Energy Inc.

“I have never met a man who worked harder or had more love for his state,” Ward said in a statement.

Chesapeake didn’t invent fracking — the drilling technique that made it possible to coax oil and gas out of previously inaccessible formations. But McClendon and Ward quickly saw the potential from shale fields and hired an army of agents to buy up oil and gas leases around the country.

At one point, Chesapeake had leased 15 million acres, an area the size of West Virginia. The shale boom pushed drilling into new areas, including urban neighborhoods in Fort Worth, Texas, hardscrabble farmland in Pennsylvania, Arkansas’ Ozark Mountains and the mesquite-dotted brush country along the Texas-Mexico border.

Chesapeake became the second-biggest U.S. gas producer after Exxon Mobil Corp., and McClendon became a billionaire.

In its heyday, Chesapeake had more than 10,000 employees at its campus of red-brick buildings northwest of downtown Oklahoma City. It was frequently named one of the best places to work in America, with a generous 401(k) program, parent/child yoga classes, tanning beds in its on-site gyms and even Botox injections in its on-site clinics.

McClendon entertained guests in a nearby restaurant that he co-owned, sometimes treating them to a bottle of wine from his private stock and sending the bottle home as a souvenir.

Natural gas’s advocate

McClendon tried to change the gas drilling industry’s relationship with the environmental community. He painted a green stripe into Chesapeake’s logo and pushed for gas to be recognized as cleaner-burning than gasoline, diesel or coal. He even toured the country in 2009 with then-Sierra Club chief Carl Pope.

He drove the creation of America’s Natural Gas Alliance, or ANGA, and the American Clean Skies Foundation, which put millions of dollars into making the nature-friendly case for natural gas. As McClendon toured with Pope, Chesapeake quietly gave millions of dollars to the Sierra Club.

His advocacy gave gas producers a seat at the table at a time when legislation to curb climate change seemed likely to pass on Capitol Hill. He also challenged the petroleum industry’s allegiance to the Republican Party by saying he had voted for Obama for president.

Shale drilling comes with numerous downsides for people who live near well sites. Drilling rigs typically run 24 hours a day for as long as a month, and each well requires hundreds, sometimes thousands, of truck trips. The fracking process uses millions of gallons of water, sand and chemicals to break up — or fracture — the rock formation to release the oil and gas trapped inside.

The drilling boom has been linked to air pollution and sporadic cases of water pollution. The cycle produces millions of barrels of salty, chemically tainted wastewater that has to be disposed of. The disposal operations have been linked to earthquakes in Texas, Arkansas, Ohio and Oklahoma.

As the public face of the shale boom, McClendon personally challenged critics. Chesapeake ran televised ads in the Dallas-Fort Worth market, featuring the actor Tommy Lee Jones, encouraging residents to ignore “temporary inconveniences” like truck traffic and noise.

When news reports surfaced of shale wells causing gas to seep into water wells in Dimock, Pa., McClendon rose to the industry’s defense even though his company wasn’t involved in the problems.

The drilling may have caused gas to shift into groundwater because of the area’s unusual geology, McClendon said at a 2011 conference of the Society of American Business Editors and Writers in Dallas, but the problem wasn’t caused by fracking itself and the frack fluid wasn’t coming back to the surface.

“Be upset if you want to be about truck traffic in rural areas of Pennsylvania,” he said, according to a report in The Dallas Morning News. “But do yourselves and your readers a favor to understand that frack water is not coming to the surface in an uncontrolled fashion.”

[Reality Check:

2012 06 23 Truth & Consequences fracing, Shell frac'ing caused gas water geyer Tioga Co, Ernst pressentation to National Farmers Union

Slide from Ernst presentations ]

A glut and a costly shift

By 2008, Chesapeake and other shale drillers had discovered so much gas around the country that they created a glut. The price of gas plummeted from about $13 per thousand cubic feet in June 2008 to less than $6 by the end of the year, and it kept falling in 2009.

The price crash was a shock to both Chesapeake and McClendon. [How blind is that? Oil patch boom bust cycles are always the same. Everyone could see that industry’s out of control frac greed was killing it] He had borrowed money against his stake in the company and faced a margin call to pay off the loan when Chesapeake’s share price fell. Chesapeake’s board of directors still awarded him a $75 million bonus that year and helped him meet the margin call by buying his antique map collection (Greenwire, June 10, 2011).

Chesapeake recovered by leading the rush from gas production to oil.

But the rush to lease even more acreage forced Chesapeake to load up on debt, and its production never brought in enough cash to pay down the loans. The company had $13 billion in long-term debt in 2012.

McClendon dealt with the cash crunch by bringing in other oil companies, including French conglomerate Total SA and Norway’s Statoil ASA, to fund some of Chesapeake’s drilling. Chesapeake also designed elaborate financial packages that sold off shares in the company’s future production in exchange for upfront payments.

McClendon’s penchant for financial wizardry helped lead to his downfall.

His contract with Chesapeake allowed McClendon to buy a share in every well the company drilled. It was a highly unusual perk by itself, and McClendon compounded it by borrowing against the future revenue from his stake — from some of the same banks that were financing Chesapeake’s debt.

Chesapeake was already under pressure from Icahn and other activist investors to clean up its financial house. When McClendon’s side deals came to light in a series of Reuters stories in 2012, Icahn and other shareholders stripped McClendon of his title as company chairman and brought in new board members to assert control over Chesapeake’s management (EnergyWire, June 8, 2012).

In April 2013, McClendon stepped down from Chesapeake, amid lawsuits and investigations by the Justice Department and the Securities and Exchange Commission (EnergyWire, April 2, 2013).

He plunged into another business venture, raising money from private equity firms to re-enter the shale boom. At one point, he was raising more than $1 million an hour (EnergyWire, Sept. 14, 2014).

But the legal troubles continued. Michigan Attorney General Bill Schuette (R) launched an investigation into Chesapeake’s leasing practices in his state and found evidence that McClendon had directed his land agents to divide acreage with Encana Corp., the Canadian gas giant, in order to suppress the price of leases. He told one of his landmen in an email that it was time to “smoke a peace pipe” with Encana (EnergyWire, May 12, 2014).

McClendon wasn’t charged personally in the Michigan cases, and Chesapeake settled them without admitting guilt.

Last year, Chesapeake sued McClendon, claiming he had stolen trade secrets when he left the company. McClendon denied the allegations.

Ripple effect

McClendon’s ouster kicked off pressure campaigns at other shale drilling companies, such as SandRidge Energy, Hess Corp. and Murphy Oil Corp.

Ward, McClendon’s former partner, was ousted as CEO of SandRidge a few months after McClendon left Chesapeake (EnergyWire, June 13, 2013).

Bloomberg News published a story quoting unnamed sources who said SandRidge was the unnamed company described in the indictment.

And the legal trouble may not be over. The Justice Department yesterday issued a statement to offer condolences but gave no indication of what it would do with its investigation. In announcing the indictment Tuesday, DOJ officials called McClendon’s indictment “the first case” in what they stressed is an “ongoing federal antitrust investigation” of conduct in the oil and gas industry. [Time to criminally charge investors?]

Police say their investigation into McClendon’s death will take one or two weeks, and the final determination on cause of death will be made by the state medical examiner. Balderrama said there have been accidents in which drivers were incapacitated by a medical problem before losing control of their vehicles.

McClendon is survived by his wife, Kathleen, two sons, a daughter and a grandchild, according to The New York Times.  [Emphasis added]

Shares of Chesapeake Energy Surge 23% Today by Tyler Crowe, March 2, 2016, 6:03PM, The Motley Fool

VIDEO: Energy leader Aubrey McClendon leaves behind legacy by Don Mecoy with contributions by Adam Wilmoth, Kyle Schwab and Graham Brewer, March 2, 2016, newsok

McClendon’s 2013 Chevrolet Tahoe crashed about 9 a.m. into a bridge on Midwest Boulevard between Memorial and NE 122, the Oklahoma City Fire Department reported.

“He pretty much drove straight into the wall,” police Capt. Paco Balderrama said. “There was plenty of opportunity to correct or go back to the roadway. That didn’t occur.”

The CNG-powered SUV was engulfed in flames. Police said McClendon was not wearing a seat belt. Balderrama said McClendon was traveling well over the posted speed limit of 50 mph.

2016 03 02 Aubrey McClendon wreck in Oklahoma

The investigation into the crash will not be complete for at least two weeks. The medical examiner will determine the cause of his death.

A federal grand jury indicted McClendon on charges of conspiring to rig bids for Oklahoma oil and natural gas leases between 2007 and 2012. McClendon on Tuesday denied the claims, calling the charge “wrong and unprecedented.”

… McClendon was a pioneer of the so-called shale revolution. Under his leadership, Chesapeake aggressively secured drilling rights in all of the nation’s major drilling plays. The company at one time was the largest producer of natural gas in the United States.

… McClendon became one of the nation’s highest-paid CEOs, and invested much of his fortune into Chesapeake stock. For several years, McClendon was ranked among the wealthiest Americans.

McClendon left Chesapeake in 2013 after a shareholder revolt, and within weeks founded American Energy Partners LP just a few blocks away. Based mainly on McClendon’s reputation, American Energy Partners raised billions of dollars from investors. Within a year, American Energy Partners had more than 600 employees.

… McClendon is survived by his wife, Katie, and three grown children. [Emphasis added]

Condolences Pour In After Death Of Former Chesapeake CEO Aubrey McClendon [Any from co-criminal Encana? Why don’t families destroyed by fracing and or robbed by CEO’s, and why don’t citizens and workers killed by industry’s greed and pollution get public condolences like these? How sick has the corporate, regulatory, political and justice world become?] by News9, March 02, 2016

OKLAHOMA CITY – Condolences are pouring in from the community following news that Aubrey McClendon, former CEO of Chesapeake Energy, died in a car crash Wednesday morning in northeast Oklahoma City.

First responders were called to the scene of the deadly crash just after 9 a.m. on N. Midwest Blvd., between E. Memorial Rd. and NE 122nd. St. to an SUV that had reportedly struck a bridge and burst into flames. One person was pronounced dead at the scene and later police confirmed with News 9 that the deceased individual was in fact McClendon.

McClendon, the former CEO and co-founder of Chesapeake Energy Corp., was indicted for conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma on Tuesday.

OKC Mayor Mick Cornett:

“First and foremost, our thoughts and prayers are with Aubrey’s family. We will always appreciate and remember Aubrey’s generosity and civic pride in our community – from his support of countless local charities to the Oklahoma City Thunder to the Boy’s and Girl’s Club of OKC to the arts. His philanthropic investments in local schools and universities, the Boathouse District and throughout our city consistently raised the standards of what Oklahoma City could be. His love and support of this community will loom large for decades to come.”

Gov. Mary Fallin:

“My thoughts and prayers are with Aubrey McClendon’s family, friends and colleagues during this very difficult time. Aubrey will be remembered for his innovations in the oil and natural gas industry, his civic generosity and being a driving force to help grow economic opportunities for Oklahoma City. He was a visionary who raised the profile of Oklahoma.”

Chesapeake Energy Corporation:

“Chesapeake is deeply saddened by the news that we have heard today and our thoughts and prayers are with the McClendon family during this difficult time.”

American Energy Partners:

“It is with deep sadness that AELP confirms that earlier today, its founder, Aubrey K. McClendon died in a car accident on Midwest Boulevard in Oklahoma City. Aubrey’s tremendous leadership, vision, and passion for the energy industry had an impact on the community, the country, and the world. We are tremendously proud of his legacy and will continue to work hard to live up to the unmatched standards he set for excellence and integrity. We will deeply mourn his loss and please join us in expressing our condolences to his family.”

Thunder Chairman Clayton I. Bennett:

“I am overcome with grief. Aubrey McClendon was a visionary community leader, a trusted business partner and a passionate member of the Thunder family. But more than anything, he was a brother and a dear friend.

“His love of his community and his desire to make Oklahoma a better place will forever inspire all of us. Louise and I offer our love and prayers to Katie and the McClendon family.”

Oklahoma Oil & Gas:

“We are saddened to hear news of the death of Aubrey McClendon today. Our thoughts are with his family, friends & colleagues at this time.”

Oklahoma Oil & Gas Association President Chad Warmington:

“Today’s events are tragic in many ways. Aubrey McClendon was a pioneer in the oil and natural gas industry. His vision and leadership helped make Oklahoma the leader it is in oil and natural gas development. The impact of his life’s work is evident throughout the industry. He was also an incredibly proud Oklahoman who loved his state and demonstrated that through incredible generosity. Most importantly, he was a loving husband and father. We mourn with the McClendon family, and we will keep them in our thoughts and prayers.”?

Oklahoma Independent Petroleum Association President Mike Terry:

“Aubrey McClendon was a groundbreaking pioneer and true champion of Oklahoma’s oil and natural gas industry. He was an extraordinary individual and businessman, admired and treasured by his peers, colleagues and employees.

His steadfast dedication to this industry, Oklahoma and his hometown of Oklahoma City helped usher in a new era of oil and natural gas exploration in the Sooner State and across the nation. By focusing on unconventional resource reservoirs and the use of horizontal drilling, Aubrey helped put in motion our nation’s push toward energy independence, and his use of these unconventional techniques in the development of natural gas was copied by oil and natural gas producers across the nation.

Oklahoma’s oil and natural gas industry has lost a true visionary whose accomplishments will long go unmatched. His passing is a great loss to the industry, state and city he vigorously and loyally supported.”

Tom Ward, Chairman and CEO of Tapstone Energy:

“This is not only a heartbreaking day for me but a sad day for all of Oklahoma. I met Aubrey when he was 23 years old and had the privilege of being his partner for 23 years. I have never met a man who worked harder or had more love for his state than Aubrey McClendon. My heart and prayers go out to Katie and the family.”

Devon Energy:

“Our thoughts and prayers are with Aubrey McClendon’s loved ones today. He played an instrumental role in America’s energy renaissance and his work will have a lasting impact on our city, state and country. He served as a leader in the growth and prosperity of Oklahoma City for many years, and his philanthropic efforts and other contributions have helped countless people.”

Department of Justice’s Antitrust Division:

“The Department of Justice is saddened to hear about the death of Aubrey McClendon. We offer our condolences to his family and loved ones.”

T. Boone Pickens:

“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. No individual is without flaws, but his impact on American energy will be long-lasting.”

UCO President Don Betz:

“The University of Central Oklahoma community is saddened by the death of Aubrey McClendon and we extend our deepest sympathy and most sincere condolences to his family at this very difficult time. Mr. McClendon was a great supporter of UCO through gifts that helped us complete the CHK / Central Boathouse and that funded various scholarships for our students. His kindness and generosity will be long remembered at UCO and throughout the community.

OCU School Of Business Dean Steve Agee:

“We’ve lost a visionary today. He was extraordinary in his ability to see things in advance of them happening.”

OSU President Burns Hargis:

“I am deeply saddened by the news of the passing today of Aubrey McClendon. He was one of the most visionary and brilliant people I have ever met. He was a difference maker and a key player in the shale revolution in America. He will be greatly missed. At this difficult time, we extend our prayers to his family.”

A few of the comments:

Calvin Phillips · Works at Retired
Any way you look at it, he is dead. Money that should have gone to his victoms will now stay with his family. That is the part I don’t like. He got away with it.

Leonard Janousek · Gallup High School
… His fortune is protected now. What will happen to the other players now?

John Hammerdink
Who is saddened? NO ONE is saddened but his scumbag buddies. This guy screwed untold numbers of people out of millions of dollars.

He was a felon. A thug. Ultimately a coward who didn’t have the courage to face the crimes he committed.

Aubrey McClendon, 56, Ex-Chief of Chesapeake Energy, Dies in Crash a Day After Indictment by Clifford Krauss, March 2, 2016, The New York Times
Photo

Aubrey McClendon, former chief executive of Chesapeake Energy, was indicted Tuesday after a federal investigation into price-fixing, bid-rigging and other anticompetitive conduct in the oil and natural gas industry.

HOUSTON — Aubrey McClendon was the face of the nation’s natural gas boom, a swashbuckling innovator who pioneered a shale revolution.

He built a fortune as head of Chesapeake Energy, whose embrace of new production techniques unlocked previously untapped deposits and helped wean the United States from ever-increasing dependence on imports.

But late Tuesday, he was indicted on federal bid-rigging charges accusing him of conspiring to suppress prices for oil and natural gas leases. And on Wednesday morning, he died in a crash in Oklahoma City after his car hit a bridge at high speed. Mr. McClendon, 56, was to have appeared in court later in the day.

“He was charismatic and a true American entrepreneur,” said T. Boone Pickens, a legendary oilman himself, who knew Mr. McClendon for 25 years. “No individual is without flaws, but his impact on American energy will be long-lasting.” [Think of McClendon’s impact on aquifers, communities and thousands of innocent citizens]

Even in a business known for bigger-than-life executives, Mr. McClendon was a mythical character. His interests went far beyond the oil patch, including part ownerships of the Oklahoma City Thunder professional basketball team and a winery in Bordeaux, France. He bragged about his $12 million antique map collection.

In his years at Chesapeake, which he co-founded in 1989, it would become the second-biggest natural gas producer in the United States. Only Exxon Mobil produces more.

But his spectacular rise was followed by an equally stunning fall with his ouster in 2013.

And his indictment this week cast a dark shadow over his career. It was served by the Justice Department late Tuesday, accusing Mr. McClendon of orchestrating a conspiracy in which two unidentified companies colluded not to bid against each other for the purchase of several oil and gas leases in northwest Oklahoma between late 2007 and early 2012.

Under Mr. McClendon’s leadership, Chesapeake was a darling of Wall Street as he acquired leases across the country and liberally employed hydraulic fracturing to unlock vast amounts of natural gas in Texas, Oklahoma, Ohio and Pennsylvania.

But Chesapeake and a handful of other companies released so much gas that they glutted the market. Natural gas prices collapsed, pulling down the value of Chesapeake’s shares over the last five years.

The company’s problems were compounded by revelations that Mr. McClendon had taken a personal stake in Chesapeake wells and then used those investments as collateral for up to $1.1 billion in loans, used mostly to pay his share of the cost of drilling those wells.

Those revelations ignited a revolt by Chesapeake’s board, and he was forced to leave the company three years ago.

When Mr. McClendon began quietly acquiring leases around 2005, most energy analysts thought the United States faced a future of gas shortages. Billions of dollars were invested in import terminals that would receive liquefied natural gas from Qatar and other gas-producing countries. But Mr. McClendon’s explorations were so successful that there was no longer any need for imports, and the terminals quickly became virtually unusable.

Now, in a once-unthinkable turnabout, some are being converted to export liquefied natural gas.

Mr. McClendon’s corporate pursuits reflected his eclectic interests. As the company grew from its origins in 1989, he developed a corporate campus in Oklahoma City that looked more like an Ivy League school than a piece of the oil patch, with a cafeteria that served international fare and a gymnasium outfitted like a spa.

Mr. McClendon dabbled in politics and personally appeared in television commercials promoting the benefits of natural gas as a replacement of coal burning for power. He unsuccessfully pushed for natural gas-fueled cars. [Like Encana and its Ex CEO Gwyn Morgan?]

Aubrey McClendon was a natural gas billionaire, a wine collector and a prominent civic force in Oklahoma City.

1989: Aubrey K. McClendon and Tom L. Ward start Chesapeake Energy.

1990s: Chesapeake Energy becomes publicly traded in 1993; after the price of oil and natural gas collapses in the late 1990s, Chesapeake focuses almost exclusively on natural gas production.

2000s: The sharp rise in natural gas prices prompts hydraulic fracturing to take off, and Chesapeake Energy is one of the main companies that lease land in major shale formations around the country.

2007-2010: Mr. McClendon donates millions of dollars to the Sierra Club, money that the environmental group neglected to disclose as it called for increased use of natural gas to replace coal.

2008: Mr. McClendon is part of a group of business leaders that moves the Seattle SuperSonics basketball team to Oklahoma City, renaming it the Oklahoma City Thunder.
2011: Forbes estimates Mr. McClendon’s personal fortune at $1.2 billion.

2012: Mr. McClendon comes under scrutiny over claims that he mixed his personal finances and those of the corporation.

2013: Mr. McClendon, under fire for his financial dealings, announces he will step down as chief executive of Chesapeake Energy.

2016: Mr. McClendon is charged with conspiracy in federal court. Prosecutors say he orchestrated a plan in which two oil and gas companies agreed not to bid against each other for the purchase of several leases in northwestern Oklahoma.

It was in college that he met his future financier, Ralph Eads III, an investment banker with Jefferies. Mr. McClendon married his college girlfriend, Kathleen Upton Byrns. In addition to his wife, he is survived by two sons, Will and Jack; a daughter, Callie; and a grandchild.

As a businessman, he had a reputation for aggressive practices.

While the indictment did not identify the two companies, most energy experts believe they are Chesapeake and SandRidge Energy, also based in Oklahoma City and formerly led by a onetime partner of Mr. McClendon. The two companies previously disclosed in regulatory documents that they were being investigated by the Justice Department’s Antitrust Division. SandRidge had yet to comment on the indictment, while Chesapeake said it was cooperating with the investigation and did not expect to face criminal penalties.

According to the Antitrust Division, the companies secretly decided who would win leases, and the winning bidder allotted an interest in the leases to the other company. The indictment said that Mr. McClendon instructed his subordinates to conspire with others from the second company to allocate leases among themselves.

“His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land,” said William J. Baer, assistant attorney general in the Antitrust Division. “Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”

The indictment on Tuesday was filed in the Federal District Court for the Western District of Oklahoma. The Justice Department said this was the first case resulting from a federal antitrust investigation into price-fixing, bid-rigging and other anticompetitive conduct in the oil and natural gas industry.

At first, Mr. McClendon and his lawyers expressed indignant disagreement with the indictment, although Mr. McClendon did not expressly deny that there had been discussions with a competitor.

“The charge that has been filed against me today is wrong and unprecedented,” Mr. McClendon said in statement released Tuesday night. “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.”

Under the federal Sherman antitrust statute, violations carry a maximum penalty of 10 years in prison and a $1 million fine. [Why are fines so puny for such serious crimes, especially if those crimes made billions in profits?]

The indictment followed a four-year federal investigation that began after Reuters revealed in 2012 that Chesapeake had discussed with Encana, a rival Canadian energy giant, how to suppress land lease prices in Michigan. Last year, Chesapeake settled by agreeing to pay $25 million as compensation to landowners with leases.

While the police did not characterize the death as a suicide, Capt. Paco Balderrama of the Oklahoma City police said that Mr. McClendon drove “through a grassy area right before colliding into the embankment.” He added, “There was plenty of opportunity for him to correct and get back on the roadway, and that didn’t occur.” Mr. McClendon was not wearing a seatbelt.

The state medical examiner’s office will determine the cause of death, the police said.

After his ouster from Chesapeake in 2013, Mr. McClendon quickly turned his attention to his next venture, co-founding American Energy Partners, a private oil company. His goal was to take the fracking revolution worldwide.

“He was always looking for worlds to conquer,” said Melvin Moran, an Oklahoma oil executive who knew Mr. McClendon for years. “And he did that.” [Emphasis added]

VIDEO: Ex-Chesapeake CEO charged with bid rigging dies in car crash by David McLaughlin and Joe Carroll, March 2, 2016, The Globe and Mail

Aubrey McClendon was killed in a car crash in Oklahoma City on Wednesday, police said. His death comes a day after he was charged with rigging bids for oil and natural gas leases.

Mr. McClendon’s car crashed into embankment wall and burst into flames. “It appears that speed was most definitely a factor,” Paco Balderrama of Oklahoma Police said today at a news conference. The car was badly burned, so police weren’t able to tell if he was wearing a seat belt.

… “Chesapeake is deeply saddened by the news that we have heard today and our thoughts and prayers are with the McClendon family during this difficult time,” Gordon Pennoyer, spokesman for Chesapeake, said in an e-mailed statement.

Three years after being forced out of Chesapeake Energy, the natural gas company he co-founded, the 56-year-old was facing allegations he worked with an unidentified competitor to keep the price of leasing drilling rights artificially low.

Mr. 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,” Mr. McClendon said Tuesday in a separate statement.

After his ouster from Chesapeake, Mr. McClendon formed American Energy Partners LP and raised more than $10-billion (U.S.) for acquisitions. With financial backing from private-equity heavyweights including First Reserve Corp. and Energy & Minerals Group, controlled by John Raymond, Mr. 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.

 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.

 

… “I 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.” [Emphasis added]

Indicted ex-Chesapeake CEO dies in fiery single-car crash by Sean Murphy, The Associated Press, March 2, 2016, The Calgary Herald

OKLAHOMA CITY – Aubrey McClendon, a natural gas industry titan, was killed when police say he drove his sport utility vehicle “straight into a wall” in Oklahoma City on Wednesday, a day after he was indicted on a charge of conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma.

Police Capt. Paco Balderrama said McClendon, co-founder of Chesapeake Energy and a part-owner of the NBA’s Oklahoma City Thunder, was the only occupant in the vehicle when it slammed into a concrete bridge embankment shortly after 9 a.m.

“He pretty much drove straight into the wall,” Balderrama said. “The information out there at the scene is that he went left of centre, 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 death follows an announcement Tuesday that he had been indicted by a federal grand jury.

Balderrama says it’s too early to say if the collision was intentional. He said McClendon was not wearing a seat belt and that he was driving faster than the 50 mph speed limit.

The Department of Justice said in a statement Tuesday that McClendon, 56, was suspected of orchestrating a scheme between two large energy companies, which are not named in the indictment, from December 2007 to March 2012. The companies would decide ahead of time who would win bids, with the winner then allocating an interest in the leases to the other company, according to the statement. [Like Encana’s and Chesapeake’s criminal tangos in Michigan?]

In a statement released Tuesday after his indictment, McClendon denied violating antitrust laws.

“The charge that has been filed against me today is wrong and unprecedented,” [Unprecedented? Refer below] McClendon said. “Anyone who knows me, my business record and the industry in which I have worked for 35 years, knows that I could not be guilty of violating any antitrust laws. All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans. I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name.”

Department of Justice spokesman Mark Abueg declined to comment on the impact McClendon’s death would have on the case.

… McClendon was renowned for his aggression and skill in acquiring oil and gas drilling rights. As drillers learned to unlock natural gas from shale formations over the last decade, McClendon pushed the company to acquire enormous tracts of land in several states. The strategy landed the company promising assets, boosted the company’s own production and helped fuel the national boom in natural gas production. But it saddled Chesapeake with enormous debt.

Chesapeake eventually became victim of its own success. Natural gas prices plummeted along with all the new drilling by Chesapeake and its peers, reducing revenues for the company and making the debt harder to repay.

Chesapeake’s 20-acre campus sprawls through an exclusive area of Oklahoma City, its Georgian-style brick buildings surrounded by manicured lawns and sycamore and elm trees.

McClendon’s death is the second fatal crash this year connected to the Thunder organization. Assistant coach Monty Williams’ wife, Ingrid, died Feb. 10 after she was involved in a head-on crash in Oklahoma City. [Emphasis added]

Victim In Fatal NE OKC Crash Identified As Aubrey McClendon
by Matthew Nuttle, March 2, 2016, 5:23 PM, News9

OKLAHOMA CITY – The victim in a deadly single-vehicle crash in northeast Oklahoma City has been identified as Aubrey McClendon, Oklahoma City Police confirm.

First responders were called to the scene of the deadly crash just after 9 a.m. on N. Midwest Blvd., between E. Memorial Rd. and NE 122nd. St. to an SUV that had reportedly struck a bridge and burst into flames. One person was pronounced dead at the scene and later police confirmed with News 9 that the deceased individual was in fact McClendon.

The Medical Examiner’s office would not confirm that fact, and said they will have to continue to investigate.

McClendon, the former CEO and co-founder of Chesapeake Energy Corp., was indicted for conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma on Tuesday.

3/1/12016 Related Story: Chesapeake Energy Ex-CEO McClendon Indicted

The Department of Justice said Tuesday the indictment alleges that the conspiracy ran from December 2007 to March 2012.

In a press conference Wednesday Afternoon, Oklahoma City police spokesperson Paco Balderrama said McClendon’s vehicle, identified as a 2013 Chevy Tahoe, was traveling northbound on Midwest Blvd. at a high rate of speed when it drifted left of center and slammed into the bridge abutment.

American Energy Partners released the following statement regarding this incident:

“It is with deep sadness that AELP confirms that earlier today, its founder, Aubrey K. McClendon died in a car accident on Midwest Boulevard in Oklahoma City. Aubrey’s tremendous leadership, vision, and passion for the energy industry had an impact on the community, the country, and the world. We are tremendously proud of his legacy and will continue to work hard to live up to the unmatched standards he set for excellence and integrity. We will deeply mourn his loss and please join us in expressing our condolences to his family.”

Chesapeake Energy spokesperson Gordon Pennoyer also released the following statement about this incident:

“Chesapeake is deeply saddened by the news that we have heard today and our thoughts and prayers are with the McClendon family during this difficult time.”

A few of the comments:

Tommy Chong · Edmond, Oklahoma
Woody Guthrie song says:” Some men rob with a gun, some with a pen.” Aubrey cheated a widow, my mother, out of fair market value for her property, yet he gets credit for giving my mothers money to charity. Karma can be a b-tch, so long Aubrey, don’t let the gate hit you in the butt on your way out.

Eric Boardman · North Central State College
How ironic…He burned up in a car fire. Sounds like God was letting him get used to his new surroundings a little early. Nothing but greed personified in a body. Well, I’m sure alot of his fracking buddies will be catching up to him, again.

Josh Harris · Mount Vernon High School Jackets
This guy was poisoning familes for years. Looks like he didn’t want to go to prison and took the easy way out. Apparently a seat in a flaming ball of steel was easier.

Jane Morrash Tolomello
Ron Bowers he destroyed a lot of lives and poisoned a lot of people and never looked back maybe the way he died was a hint as to where is going

[Emphasis added]

Police: Ex-Chesapeake CEO Aubrey McClendon dies in crash by News9, March 2, 2016 1:16 PM MST

OKLAHOMA CITY (AP) – Oklahoma City police say Aubrey McClendon, a natural gas industry titan who was indicted on Tuesday by a federal grand jury, has been killed in a fiery single-car crash in Oklahoma City.

Police Sgt. Ashley Peters says 56-year-old McClendon was the only occupant in the sport utility vehicle when it slammed into a concrete bridge pillar shortly after 9 a.m. Wednesday.

McClendon’s death follows an announcement Tuesday that he had been indicted for allegedly conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma.

Police say it’s too early to tell if the collision was intentional. [Emphasis added]

VIDEO: Crews On Scene Of Deadly Crash In Northeast OKC by Xin Xin Liu, March 2, 2016, 9:02 AM, News9

2016 03 02 Aubrey McClenndon fatal wreck in Oklahoma

OKLAHOMA CITY – Crews are responding to the scene of a deadly car crash in northeast Oklahoma City, Wednesday morning.

According to the Oklahoma City Fire Department, it happened just after 9 a.m. on Midwest Blvd. between Memorial and 122nd. A car reportedly hit a bridge. One person has been pronounced dead. Midwest Blvd. is shut down in the area.

VIDEO: Experts react to indictment of former Chesapeake CEO Aubrey McClendon by Sheldra Brigham, March 2, 2016, kfor

2016 03 02 Aubrey McClenndon grand jury indictment

OKLAHOMA CITY – The death of a well-known energy CEO comes less than a day after a federal grand jury indictment.

Aubrey McClendon, the former CEO of Chesapeake, was accused of conspiring with other oil companies to rig bids for oil and gas leases in order to keep his company’s costs low.

There are many in the community who said people should wait to pass judgement.

“It’s a partnership. It needs to be a win-win,” said Bryce Everett, Allied Mineral Management.

Everett said it is a crucial component between land owners and oil companies.

It’s his job to make sure that happens.

“I work on behalf of landowners, and so I assist them with their deals and help broker the deal,” he said.

When news that McClendon was under indictment for bid rigging, he said he was shocked.

“For them to bring an indictment, to say he was doing something to keep the prices down, everywhere he went he drove the prices up,” he said.

The seven-page indictment alleges that McClendon conspired with his competition in the drilling industry, possibly cutting landowners out of millions of dollars.

As someone close to landowners, that’s a hard sell for Everett.

“Aubrey McClendon, I can’t think of anyone who has brought more money into rural areas than Aubrey and Chesapeake. He would go out and put a bid in by the county and just buy it,” he said.

According to the Justice Department, McClendon’s indictment is just the first case in an ongoing federal investigation into price fixing, bid rigging and other anti-competitive conduct in the oil and natural gas industry.

Each violation of the Sherman Anti-Trust act carries a maximum penalty of 10 years in prison and a $1 million fine.

McClendon was expected to face multiple charges.

This isn’t the first time McClendon has been investigated for alleged bid-rigging.

Last year, Chesapeake agreed to a $25 million settlement with the state of Michigan over bid-rigging, although the Justice Department closed its investigation there without indictment.

The recent charges are still hard to believe about a man many admired and respected.

“I can tell you that a huge amount of money was brought into the state because of the effort he had and the vision he had,” Everett said.

Chesapeake released the following statement after the indictment was handed down:

“Chesapeake has been actively cooperating for some time with a criminal antitrust investigation by the Department of Justice regarding past land leasing practices and has received conditional leniency under the Antitrust Division’s Leniency Program. Chesapeake does not expect to face criminal prosecution or fines relating to this matter. Chesapeake has taken significant steps to address legacy issues and enhance legal and regulatory compliance throughout the organization.” – Gordon Pennoyer [Emphasis added]

Aubrey McClendon Expected To Appear Before Federal Judge Wednesday by Rachel Calderon, March 2, 2016, 6:08 AM MST, News9

OKLAHOMA CITY – Aubrey McClendon, former CEO of Chesapeake Energy, is expected to turn himself in and appear before a judge at the federal courthouse on Wednesday.

Late Tuesday, McClendon was indicted for conspiring to rig bids to buy oil and natural gas leases in northwest Oklahoma. The Department of Justice said this happened while he was CEO at Chesapeake.

3/1/2016 Related Story: Chesapeake Energy Ex-CEO McClendon Indicted

The documents claim, “The conspirators would decide ahead of time who would win the leases. The winning bidder would then allocate an interest in the leases to the other company,” which is a violation of the Sherman AntiTrust Act.

McClendon responded to the allegations, but didn’t deny them, saying in part, “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.”

Violating antitrust laws carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.

McClendon founded American Energy Partners after leaving Chesapeake.

Fracking Pioneer McClendon Accused of Rigging Oklahoma Bids
by David McLaughlin and Joe Carroll, March 1, 2016, Bloomberg
Aubrey McClendon has been called a pioneer and a natural gas evangelist.

Now he might just be the architect of his own destruction.

Three years after being forced out of Chesapeake Energy Corp., the natural gas company he co-founded, the 56-year-old is facing allegations he worked with an unidentified competitor to keep the price of leasing drilling rights artificially low.

McClendon is 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 in a separate statement.

The grand jury indictment comes after the hydraulic fracturing process McClendon championed for accessing trapped oil and gas has caused prices to crater. Chesapeake has sunk 39 percent this year, including losing a third of its value in a single day last month after a report, which the Oklahoma City-based company denied, that it had hired lawyers for potential bankruptcy.

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 the other company, the government said. The companies, which aren’t defendants in the case, are identified in the indictment as Company A and Company B [Why protect these companies by keeping their names secret?]. Mark Abueg, a spokesman for the Justice Department, declined to comment on their identities.

“The Justice Department has taken business practices well-known in the Oklahoma and American energy industries that were intended to, and did in fact, enhance competition and lower energy costs and twisted these business practices to allege an antitrust violation that did not occur,” McLendon’s lead lawyers, Abbe Lowell of Chadbourne & Parke LLP and Williams & Connolly LLP’s Emmet Flood, said in a statement. “We will show that this prosecutorial overreach was completely unjustified.”

Fracking Pioneer

During his almost quarter-century at the helm of Chesapeake, McClendon embraced drilling and fracking innovations that unleashed the shale revolution ignored by the world’s biggest energy producers, building the company into what was for a time the largest U.S. source of gas.

McClendon, who co-founded Chesapeake in 1989, oversaw a jump in its market value from its 1993 debut as a public company to a peak of more than $35 billion in 2008, according to data compiled by Bloomberg.

McClendon was in the vanguard of the shale revolution that upended U.S. gas markets and paved the way for the renaissance in American crude oil production. At Chesapeake, he amassed a shale empire that rivaled Exxon Mobil Corp.’s before he was dismissed in 2013 amid conflict-of-interest probes and a shareholder revolt led by billionaire Carl Icahn.
Post-Chesapeake

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.

Elizabeth Prewitt, a former Justice Department prosecutor, said the indictment represents a major case for the U.S. following a new policy announced last year intended to emphasize the prosecution of individuals in corporate-fraud investigations. McClendon’s lawyer said he had been singled out in the name of the new policy, which came after years of criticism that the department had failed to hold individuals accountable.

“McClendon was at the head of the table in the C-suite when he supposedly orchestrated the bid-rigging scheme, and so this charge lines up with the DOJ’s recent focus on prosecuting individuals,” said Prewitt, now at Hughes Hubbard & Reed LLP in New York.

According to the indictment, McClendon was the chief executive officer, president and a director of Company A until at least March 2012. [Chesapeake?] Company B was a corporation with its principal place of business in Oklahoma City, according to the charging document. The Justice Department provided a copy of the filing, which couldn’t immediately be confirmed in court records.

Prosecutors said McClendon contacted an unnamed co-conspirator at Company B in 2007 and proposed they stop competing on bids to purchase leases.

The antitrust law McClendon is accused of violating, the Sherman Act, carries a maximum prison sentence of 10 years and a $1 million fine for individuals, according to the Justice Department statement.

‘Singled Out’

“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 in a statement. “I will fight to prove my innocence and to clear my name.”

Chesapeake spokesman Gordon Pennoyer said the company has been cooperating with prosecutors and received immunity under a Justice Department leniency program that shields companies from criminal prosecution if they are the first to report an antitrust violation.

“Chesapeake does not expect to face criminal prosecution or fines relating to this matter,” Pennoyer said in a statement. “Chesapeake has taken significant steps to address legacy issues and enhance legal and regulatory compliance throughout the organization.”

The Justice Department’s investigation is ongoing.

Chesapeake paid a $25 million penalty to the U.S. state of Michigan last year to settle allegations it conspired with Canadian gas driller Encana Corp. to rig auctions for drilling rights. In addition to the civil settlement, Chesapeake pleaded “no contest” to two misdemeanor criminal antitrust violations in state court, the Michigan attorney general’s office said in an April 24, 2015, statement. The Justice Department opened a grand jury inquiry into the Michigan bid rigging allegations, though it never brought charges. [Emphasis added]

[Refer also to:

Frac Fraud on the Run: Pennsylvania attorney general sues Chesapeake Energy over shale gas royalties; When will Alberta’s attorney general sue oil companies deceiving & robbing Albertans?

OOOPS! Fracking Study on Water Contamination Under Ethics Review, Chesapeake Energy paid undisclosed fees to lead author, study based on questionably collected samples (ensure no methane?) provided by Chesapeake

Smoking is good for you! New study claims methane in drinking water is natural. What’s the catch? Chesapeake Energy Corp supplied all the data, an ex-employee and funded the study

Chesapeake Energy Corporation Teams Up With Bankrupt GasFrac (Calgary) To Test Gelled (with what toxic chemicals?) LNG (Highly Dangerous) Fracking in Ohio

Another lawsuit victory: Tarrant jury awards $20,000 to homeowners in nuisance suit against Chesapeake

Lessors Sue Chesapeake Energy for $5 Billion

Chesapeake faces new charges on Michigan leasing; Encana settled criminal charges by paying 5 times the maximum penality

Starts Today to May 8, 2014: Encana and Chesapeake Criminal Anti-trust Hearing in Michigan: Encana pleads “no contest” and buys its way out on the first day with $5 Million Settlement

Attorney General Bill Schuette: Encana and Chesapeake Energy criminally charged with colluding to keep oil and gas lease prices artificially low in Michigan; Also face separate, federal antitrust investigation by Department of Justice

Fracking by Chesapeake and Billiton Petroleum Blamed for ‘Thousands of Quakes’ and Damaging Homes in Arkansas Lawsuit

Another “documented” case! American Arbitration Association, Commercial Arbitration Tribunal, orders Chesapeake to pay Jacqueline Place of Terry Township, Bradford County PA, $60,000 for temporary methane contamination in water well after hydraulic fracturing

Another methane contaminated water well case from hydraulic fracturing, Chesapeake cannot yet arbitrate claims that fracking made groundwater flammable in Pennsylvania

Fort Worth Sues Driller Chesapeake, Citing Millions in Lost Royalties

Exclusive: Chesapeake drops energy leases in fracking-shy New York, Frantic fracking sends US natural gas prices into freefall

Chesapeake sued for fixing prices, underpaying landowners

Chesapeake, Encana sued in civil antitrust action filed by Northstar Energy

Jeremiah Magers Suing Chesapeake for methane contaminated drinking water now also Suing CNX, Columbia

Chesapeake, McClendon endure rocky year; Operators Take out Liens on Landowner Properties for Chesapeake’s Unpaid Bills

Well Pad Suffers New Slip, Chesapeake struggles with suspended site

Chesapeake fined $600,000 in W.Va. waterfall case

Chesapeake Appalachia pleads guilty to clean water act violations

Casualties of Chesapeake’s “land grab” across America

As controversy swirls, Chesapeake Energy picks new lawyer, Webb

Chesapeake Squeezes Landowners On Costs Amid Cash Crunch

Chesapeake Irks Landowners As It Renegotiates Leases

Analysis: Legal woes may spoil Chesapeake’s Michigan sale

Chesapeake Energy subject to U.S. antitrust investigation for possible collusion with Encana, Company subpoenaed to produce documents for grand jury in Michigan land sales probe

Chesapeake pays $75,000 fine for problems that led to Oklahoma well blowout, The January blowout near Sweetwater in western Oklahoma happened after a drilling rig hit an unexpected, shallow pocket of gas. A later investigation found casing in a nearby Chesapeake well had failed and caused the gas to migrate

Federal judge in Oklahoma City combines Chesapeake lawsuits, Thirteen lawsuits against the board of Chesapeake Energy Corp. have been combined into one case by a federal judge in Oklahoma City

Chesapeake, Encana antitrust case deepens

Justice Dept. probes Chesapeake over possible collusion

Chesapeake: From Bad to Worse to Potentially Criminal

Report alleges Chesapeake Encana combined to supress land prices

Michigan probing allegations of Encana-Chesapeake anti-competitive practices

Chesapeake to Pay $1.6 Million for Contaminating Water Wells in Bradford County

Residents claim negligence, sue Chesapeake

Rolling Stone Responds to Chesapeake Energy on ‘The Fracking Bubble’

2012: The Big Fracking Bubble: The Scam Behind Aubrey McClendon’s Gas Boom

The Documents Chesapeake Energy Doesn’t Want You To See

Sierra Club secretly accepted $26 million in donation from Chesapeake Energy

Couple settles suit with Chesapeake

Chesapeake Energy Issued Record Gas Drilling Fine For Water Contamination In Pennsylvania

Maryland Attorney General to sue Chesapeake Energy over Pennsylvania well leak [When’s Alberta’s Attorney General going to sue Encana for illegally fracing and contaminating Rosebud’s drinking water aquifers, violating the Water Act, and putting residents and landowners at risk of explosion in their homes and businesses?]

Lawsuits against Chesapeake Energy challenge dumping of fracking waste

Resident files lawsuit against Encana, Chesapeake, Plaintiff claims ground water has been poisoned

Lawsuit filed against Chesapeake ]

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