Ex-Chesapeake CEO McClendon indicted over lease bid rigging

[WASHINGTON] Aubrey McClendon, the co-founder and former chief executive officer of Chesapeake Energy Corp, was indicted on charges that he conspired to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma, the US said.

McClendon is accused of orchestrating a scheme between two "large oil and gas companies" to not bid against each other for leases, the US Justice Department said Tuesday in a statement.

From Dec 2007 to March 2012, the conspirators 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.

During his almost quarter-century at the helm of Chesapeake, the 56-year-old 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 US source of gas.

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

McClendon was in the vanguard of the shale revolution that upended US 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.

According to the indictment, McClendon was the chief executive officer, president and a director of Company A until at least March 2012. Company B was a corporation with its principal place of business in Oklahoma City, according to the charging document.

McClendon and a spokesman for Chesapeake didn't immediately respond to a phone call and e-mail seeking comment after working hours Tuesday.

The Justice Department's investigation is ongoing.

BLOOMBERG