Newspaper article International New York Times

Energy Mogul Dies in Crash a Day after Indictment ; 'Charismatic' Innovator Was Accused of Rigging Bids on Oil and Gas Leases

Newspaper article International New York Times

Energy Mogul Dies in Crash a Day after Indictment ; 'Charismatic' Innovator Was Accused of Rigging Bids on Oil and Gas Leases

Article excerpt

The authorities said Mr. McClendon, the former chief executive of Chesapeake Energy, was killed when his car drove into a bridge abutment.

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 abutment 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 had known Mr. McClendon for 25 years. "No individual is without flaws, but his impact on American energy will be long-lasting."

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 collection of antique maps.

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 cars fueled by natural gas.

Aubrey Kerr McClendon, the son of Joe and Carole Kerr McClendon, was born July 14, 1959, in Oklahoma City into a family steeped in the oil industry. …

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