Aubrey McClendon, the oil and gas entrepreneur whose outsized ambition and high tolerance for risk made him a leading figure in the American energy revolution, died after crashing his car into a concrete wall on Wednesday in Oklahoma City. He was 56.
McClendon was considered one of the most influential energy executives of his generation, revered by oilmen but criticized by environmentalists for championing the extraction technique known as hydraulic fracturing, or fracking, that ushered in U.S. energy independence.
He was often compared to the titans of American commerce - an Andrew Mellon or John Rockefeller of his time. But his final years, and hours, were marked by controversy, and some investors had begun to view him warily for his reported lavish spending and mingling of personal and corporate investments.
The day before his death, the U.S. Department of Justice indicted him for allegedly rigging bids on land for oil and gas development while he was CEO of Chesapeake Energy Corp, the company he founded in 1989 and turned into the No. 2 U.S. natural gas producer before being ousted in 2013. He denied the charges.
His abrupt death - the official cause of which has yet to be determined - triggered an outpouring of condolences and tributes from across the U.S. energy industry, including figures such as activist investor Carl Icahn, who had pressed for changes at Chesapeake prior to McClendon's departure.
McClendon was "one of the brightest men I've ever dealt with," Icahn said in a message on Twitter. "I personally always found him to be a gentleman in our interactions."
Fellow wildcatter T. Boone Pickens, with whom McClendon championed the use of natural gas in place of oil, called him a "charismatic" entrepreneur. "No individual is without flaws, but his impact on American energy will be long-lasting," he said.
And he was mourned across Oklahoma, where he was revered for helping revive a moribund economy and revitalising its largest city with investments in restaurants, cultural venues and, in particular, the state's first major sports franchise, which he landed by convincing the Seattle SuperSonics basketball team to move in 2008. The team, renamed the Oklahoma City Thunder, has thrived.
"He played an instrumental role in America’s energy renaissance," Oklahoma-based Devon Energy Corp said in a statement. "His philanthropic efforts and other contributions have helped countless people."
McClendon himself held a nearly 20-percent stake in the Thunder, and one of his last public appearances was in his regular courtside seats at Saturday’s game.
“Every day was a day that Aub(rey) was going to make the best of it. He was a guy who could always find a way to make something positive out of something negative,” said Tom Price, a retired executive who worked alongside McClendon for decades at Chesapeake, who exchanged emails with him on Tuesday.
On Thursday morning in Oklahoma City, employees quietly filed into the suburban office park that houses his latest ventures - including the multibillion-dollar oil and gas producer American Energy Partners and Pops Deli, an Americana-filled diner.
Police said they were investigating why his 2013 Chevrolet Tahoe slammed into an overpass, where it burst into flames. They said the car was travelling above the 40 miles-per-hour (64 kph) speed limit, and that he was not wearing a seat belt.
By Thursday morning, several wooden crosses, bunches of flowers and a white oil worker hardhat had been placed at the site of the crash, a remote stretch of road on city's outskirts.
McClendon is survived by his wife, Katie, an heiress of the family that founded washing-machine maker Whirlpool Corp, and their three children, Jack, Callie and Will.
DESTINED TO WORK IN OIL
Born in 1959, McClendon seemed destined to work in oil and gas. He was a great-nephew of former Oklahoma Governor Robert Kerr, co-founder of U.S. oil-and-gas pioneer Kerr-McGee Corp.
Despite the appearance of privilege, friends said he worked long hours and weekends, and was fiercely competitive.
After attending Duke University, he returned home to Oklahoma and later became a "landman," an oil field real estate broker that puts together crucial but arcane leasing and royalty contracts between ranchers and crude producers.
At age 29, he co-founded Chesapeake with his young friend Tom Ward, who called McClendon's death "heartbreaking."
Tall and thin with a thick head of white hair, McClendon was a tireless booster who often sported a tie printed with tiny drilling rigs.
His leveraged deals and stirring speeches attracted followers and a long list of investors from whom he raised billions of dollars.
His unrivalled drive to acquire and develop natural gas reserves across the country meant that by 2012, Chesapeake owned the drilling rights on more than 15 million acres, an area about the size of West Virginia.
Chesapeake called its rapid and expensive accrual of leases a "land grab," making McClendon the main character in the biggest resource-driven land rush the country had experienced since the 1800s Gold Rush.
His bold moves generated plenty of headlines. Forbes magazine went so far as to call McClendon "America's Most Reckless Billionaire" in a 2011 cover story.
McClendon’s final years at Chesapeake were marked by frequent controversy. He helped cause Chesapeake's stock to plummet amid the financial crisis when he sold hundreds of millions of dollars in stock to raise cash for himself.
In April 2012, Reuters reported that a series of previously undisclosed loans to McClendon could once again put him and Chesapeake's shareholders at odds. McClendon had borrowed more than $1.3 billion by pledging his stake in the company's oil and natural gas wells - a controversial perk known as the Founder Well Participation Plan - as collateral.
He used that money, in part, to fund his share of the drilling costs of those wells. Some of the loans came from an investor that also did business with Chesapeake.
That report, as well as the company’s mounting debt at a time of falling energy prices, helped turn the board of directors against him, and he was stripped of his role as chairman. The next year, he was out as CEO.
After leaving Chesapeake, McClendon quickly set up American Energy Partners to make his comeback, raising billions of dollars in new investments to acquire land for oil and gas development in the United States, Argentina and Australia.
On Tuesday, McClendon was in the headlines again, as the Justice Department's Antitrust Division charged him with conspiring to rig bids to buy oil and natural gas leases in Oklahoma.
The indictment followed a nearly four-year federal antitrust probe that began after Reuters reported that Chesapeake had discussed with a rival how to suppress land lease prices in Michigan during a shale-drilling boom.
In a statement on Tuesday evening, McClendon vowed to fight.
"The charge that has been filed against me today is wrong and unprecedented," McClendon said.
While McClendon's energy deals made him one of America's highest-paid men and he bought fancy houses and wines, he was also generous and funded athletic, academic and philanthropic ventures around the nation.
Duke University and the University of Oklahoma have received more than $25 million for sports facilities and dormitories.
Using his own cash and revenue from his firms, McClendon helped rebrand Oklahoma City through philanthropy and real estate development. The state capital is now an emerging centre of sports and culture.
As part of his efforts to attract top talent to Chesapeake and its 50-acre red brick campus, McClendon had the company built a 72,000-square-foot fitness centre and a health centre that offered teeth whitening.
(Additional reporting by Brian Grow in Atlanta, Mike Stone in Houston, Joshua Schneyer in New York and Heide Brandes in Oklahoma City; Editing by Terry Wade, Lisa Shumaker and Bill Rigby)
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Published Date: Mar 04, 2016 01:15 AM | Updated Date: Mar 04, 2016 01:15 AM