Aubrey McClendon, who was co-founder (with Tom Ward) of Chesapeake Energy (ticker: CHK;, died in a one-car crash in rural Oklahoma early morning March 2, 2016.


Aubrey McClendon – co-founder Chesapeake Energy, Founder, American Energy Partners-Utica, died March 2, 2016

A maverick in America’s shale oil and gas industry, he will be mostly remembered for building Chesapeake into one of America’s largest natural gas producing companies.  The company was founded with a loan of $50,000 from a McClendon family member.  At its high, Chesapeake had an enterprise value of $54.1 billion (July 2, 2008). Production for CHK peaked at 4.1 Bcfe per day in Q3’12.

McClendon’s death comes one day after the U.S. Department of Justice indicted him for allegedly violating antitrust laws by colluding to rig bids for oil and gas acreage while he was at Chesapeake, a company that has been a central player in the U.S. shale revolution of the past decade. He denied the charges.  McClendon released a statement saying in part: “The charge that has been filed against me today is wrong and unprecedented. … 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.”

He was not without his fans or detractors.  During the period of 2006 to year-end 2012, Chesapeake’s production grew 164.5%.  Simultaneously, he benefited from this meteoric growth in the form of a Founder’s Well Participation Program, a program that allowed McClendon to own an interest in every Chesapeake-operated well.  The Chesapeake Board of Directors, under pressure from shareholders, announced the program would cease to exist on December 31, 2015, nearly 18 months after his tearful resignation from the company he co-founded.

McClendon resigned from Chesapeake on April 1, 2013.  On October 9, 2013, he announced the founding of American Energy Partners-Utica.  The company successfully raised $1.7 billion from members of AEP Utica management, The Energy & Minerals Group and First Reserve Corporation.  The company added operating platforms in the Permian Basin, Woodford, and to own non-operating working interest and mineral interest assets.  On January 14, 2016, AEP announced it had entered the Vaca Muerta Basin in Argentina, a highly prospective shale basin, signing an agreement with YPF.

For $50,000, McClendon built a world-class company on a rock that no one could figure out how to produce.  George Mitchell is the man who started the shale revolution.  But it was McClendon and Tom Ward who were the first guys through the wall. It always gets bloody, always, when you’re first.  But they changed the way of doing business, and for that we say thanks.  God speed, Aubrey K. McClendon.

Legal Notice