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Indicted former CEO of Chesapeake Energy dead in crash: police

Thursday, March 3, 2016 - 06:51

[WASHINGTON] The former head of Chesapeake Energy and pioneer of the US fracking industry was killed in a one-car crash in Oklahoma early Wednesday, a day after he was indicted for bid-fixing, police said.

Aubrey McClendon's car rammed into a bridge wall in northeast Oklahoma City, Sergeant Gary Knight, a police spokesman, told AFP.

McClendon, 56, died at the scene, Knight said. "Single car, single occupant." Photos from the scene posted by local media showed a completely crushed SUV, suggesting the car hit the wall at high speed.

McClendon's death came one day after the high-profile energy executive, who helped pioneer the development of the fracking industry and built Chesapeake into the country's second-largest natural gas producer, was indicted on federal conspiracy charges for rigging bids for oil and natural gas leases.

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McClendon "orchestrated a conspiracy between two large oil and gas companies to not bid against each other for the purchase of certain oil and natural gas leases in northwest Oklahoma" between 2007 and 2012, the Justice Department alleged late Tuesday.

While the indictment did not name the companies involved, McClendon was Chesapeake's CEO during that period.

"The conspirators would decide ahead of time who would win the leases," the indictment said. "The winning bidder would then allocate an interest in the leases to the other company." McClendon faced up to 10 years in prison and a US$1 million fine for each violation under the indictment.

At the time of his death he was chairman and chief executive of American Energy Partners, an investor in oil and gas production operations.

He was also part owner of the Oklahoma City Thunder NBA basketball team.

McClendon was a high-flying business executive who started Chesapeake Energy in 1983 as a wildcatter, aiming early on to develop oil and gas reserves trapped in hard-to-tap shale strata which larger companies ignored.

When such fracking - or hydraulic fracturing - techniques became more advanced and opened huge opportunities in the 2000s, Chesapeake took off as the industry's leader.

McClendon's fortune grew to around US$3 billion. In 2008, Fortune magazine, dubbing him "Mr. Gas," ranked him the country's top-paid executive, with total compensation that year of US$112.5 million.

Chesapeake soared to more than US$25 billion in market value and 12,000 employees. But it also grew heavy with debt, leading Forbes magazine to brand McClendon as "America's Most Reckless Billionaire." In 2013, Chesapeake shareholders rebelled, forcing him out amid accusations that he had dumped Chesapeake shares in the financial crisis, enjoyed expensive company-paid perks and used his position to secretly borrow US$1.1 billion backed by his part-ownership of company wells.

After he departed, Chesapeake sued McClendon for stealing maps and other data on potential oil and gas finds he allegedly used in setting up his new exploration operation, American Energy Partners.

Late Tuesday, McClendon responded in a statement to the Justice Department indictment, calling it "wrong and unprecedented" and arguing that what he did was longstanding and common industry practice.

Justice authorities had singled him out "as the only person in the oil and gas industry in over 110 years... to have been accused of this crime in relation to joint bidding on leasehold." His lawyer added that he was accused of "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." In a statement Wednesday, American Energy Partners said McClendon'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," it added.

AFP

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