Aubrey McClendon

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Aubrey McClendon
Aubrey McClendon headshot.png
Born Aubrey Kerr McClendon
(1959-07-14) July 14, 1959 (age 56)
Residence Oklahoma City, Oklahoma
Nationality American
Citizenship United States
Education B.A. 1981
Alma mater Duke University
Occupation Oil and natural gas entrepreneur
Organization American Energy Partners, LP
Religion Episcopalian
Spouse(s) Katie McClendon
Children 3
Parent(s) Joe Connor McClendon
Carole Kerr McClendon

Aubrey Kerr McClendon (born 1959) is an American businessman and the founder and chief executive officer of American Energy Partners. He is also the co-founder and retired chief executive officer and chairman of Chesapeake Energy Corporation. He has been an outspoken advocate for natural gas as a cleaner and safer alternative to oil and coal fuels.

He is one of the owners of the basketball team Oklahoma City Thunder and was part of the ownership that moved the team to Oklahoma City in 2008. He is also a financial supporter of various non-profit organizations and public institutions in Oklahoma City, and owns interests in multiple businesses, restaurants and real estate properties in the greater Oklahoma City area.

Early life and education[edit]

Aubrey Kerr McClendon was born July 14, 1959 in Oklahoma City, Oklahoma to Joe and Carole McClendon.[1][2] McClendon is the great-nephew of Robert S. Kerr, former governor of Oklahoma and U.S. senator.[1][3] He spent his childhood in Belle Isle, a neighborhood in Oklahoma City, and attended Belle Isle Elementary School, a public school. Later, he attended Heritage Hall Middle and Upper School, a private school.[4] McClendon played as a wide receiver on his high school's football team, and was voted senior class president at Heritage Hall. He graduated as co-valedictorian of his class.[4][1] As a teenager, he started a lawn mowing business, through which he had an early encounter with Shannon Self, who later became a founding board member of Chesapeake Energy Corporation.[5]

McClendon graduated from Duke University in 1981 with a B.A. in history.[6] He minored in accounting and was a member of Sigma Alpha Epsilon fraternity.[5] He also met his wife, the former Kathleen (Katie) Upton Byrns, while at Duke.[1]

His first job after Duke was as an accountant.[5] Later, he worked as a landman at Jaytex Oil and Gas, a public company in Oklahoma City founded by his uncle, Aubrey M. Kerr, Jr.[5] McClendon left Jaytex in November 1982 to pursue his own business in the oil and natural gas industry.[5]

Business career[edit]

Chesapeake Energy Corporation[edit]

In 1983, McClendon and Tom L. Ward "threw in together" in their initial venture into oil and natural gas.[4][6] Together, they co-founded Chesapeake Energy Corporation in 1989. McClendon and Ward were both 29 at the time.[1][7] McClendon began as chairman and chief executive officer of Chesapeake, while Ward served as president and chief financial officer. The company began drilling its first two wells in Garvin County, Oklahoma in May 1989.[8]

With Chesapeake, McClendon focused on drilling wells into unconventional reservoirs such as fractured carbonates and shales and was an early adopter of horizontal drilling and hydraulic fracturing techniques, which helped the company's fast early growth.[5][4] His focus on these new and unconventional techniques later led to him being called a "visionary leader" in the oil and natural gas industry.[9] He took the firm public in 1993,[6] and in the following three years its stock was the most successful in the country, rising 274% in value from 1994 to 1997, according to the Wall Street Journal.[10]

In 2005, Forbes Magazine named McClendon one of the country's top-performing executives for his role at Chesapeake.[11] A few years later, he was the highest paid CEO of all the S&P 500 companies in 2008, receiving a compensation package totaling $112 million.[12][2] In 2008, McClendon was notified that his shares were no longer valuable enough to back a margin loan with Goldman Sachs and other banks. In response, McClendon was forced to sell a majority of his 31.5 shares, comprising 94% of his stake in Chesapeake and 6% of the company.[13][6] The following year, Chesapeake offered McClendon a five-year retention contract, including a $75 million bonus.[5]

In 2011, Forbes called McClendon "America's most reckless billionaire" in a cover story on his career. The profile noted McClendon's high risk tolerance and cited the sale of his shares in 2008 as a reckless move.[14] The same year, the magazine named McClendon to its 20-20 Club, comprising the eight CEOs of public companies who had delivered annualized returns of more than 20% over a 20 year period.[15]

Chesapeake continued to grow its gas production under McClendon from 5 million to 2.5 billion cubic feet per day from 2009 to 2013.[16] Chesapeake's discovery of large reserves of natural gas was reported to have helped reduce natural gas prices to consumers in the U.S.[3] In a 2012 opinion piece discussing the development of the domestic oil and natural gas industry of the U.S. in the first decade of the 21st century, former Houston mayor Bill White described McClendon as "at the forefront of those heroes" of the American natural gas industry.[17]

According to allegations reported in Reuters in April 2012, McClendon took out more than $1 billion in personal loans, to finance drilling costs, from firms that were lenders to Chesapeake. This raised the potential for conflicts of interest and prompted questions on the corporate governance and business ethics of Chesapeake's senior management.[18] On February 20, 2013, Dow Jones reported that a Chesapeake board review found no improper conduct, no improper benefit to McClendon and no increased cost to the company.[19]

In June 7, 2012, Reuters alleged that McClendon had used Chesapeake employees to perform $3 million of personal work, including engineering and accounting support and the repair of his house, in 2010.[3] McClendon had also used corporate planes for non-business-related travel for the McClendons' family and friends.[3] According to Chesapeake's proxy statement filed with the SEC on May 11, 2012, McClendon reimbursed the company for all but $250,000 of the employee costs.[3] Further, McClendon's employment agreement authorized the personal use of company aircraft by McClendon, his immediate family members and guests, "for safety, security and efficiency" reasons.[3][20]

In June 2012, Chesapeake shareholders voted to reject two board members and approve increased proxy access.[21] McClendon relinquished his chairman title in June 2012, remaining in his role as CEO.[22] McClendon stepped down from his position as CEO at Chesapeake on April 1, 2013.[23] At the time, the company was estimated to be the second largest producer of natural gas in the United States, following only ExxonMobil.[24]

Since 1992, through an initiative called the Founder Well Participation Program (FWPP), McClendon was allowed to invest in wells drilled by Chesapeake. The FWPP was first formalized and incorporated into the founders' employment agreements in connection with Chesapeake's IPO in February 1993.[25] Following his departure from the company, McClendon retained the option to continue investing in Chesapeake wells through July 2014.[26]

In February 2015, Chesapeake filed a lawsuit against McClendon, accusing him of misappropriating company data on available land during his departure.[27] McClendon and American Energy Partners responded that he had the right to all information in his possession under his various separation agreements with Chesapeake.[27] In April 2015, American Energy - Utica, LLC reached a settlement with Chesapeake, giving them 6,000 acres (2,400 ha) of land and $25 million.[28] As of April 2015, McClendon is in arbitration with Chesapeake regarding the lawsuit against him.[28]

American Energy Partners, LP[edit]

On April 2, 2013, McClendon founded American Energy Partners, LP, (AELP), a private oil and natural gas company based in Oklahoma City.[29] During 2013 and 2014, McClendon hired over 600 employees and raised equity and debt commitments of approximately $15 billion.[30] AELP is an oil and natural gas company comprising several affiliated companies, including American Energy Utica LLC and American Energy Marcellus LLC, American Energy – Permian Basin, LLC, American Energy – Woodford, LLC, American Energy – NonOp, LLC, American Energy – Minerals, LLC and American Energy – Midstream, LLC.[29][31]

Natural gas advocacy[edit]

McClendon is a founding member of America's Natural Gas Alliance (ANGA), a trade association and lobbying group for independent natural gas producers, based in Washington, D.C.[12] He is an advocate for the greater use of natural gas in the United States, and he funded a campaign in 2007 to draw clean-energy activists' attention to a Texas utility's plan to build 11 new coal plants.[12] He also made a donation to the Sierra Club to fund its "Beyond Coal" campaign, which had blocked more than 150 new coal plants in the United States, as of October 2013.[12][32]

McClendon has been a public proponent of natural gas, fracking and shale drilling throughout his career.[4] In an appearance on 60 Minutes in 2010, McClendon argued a case for natural gas as a clean fuel and a significant job-creating industry. He defended the natural gas and oil industry's use of hydraulic fracturing techniques for well completion.[33] Later that year, he was quoted saying, "We have found something that can liberate us from the influence of OPEC, that can put several million Americans back to work, liberate us from four-dollar gasoline."[4]

Business ventures and investments[edit]

McClendon has held or holds a stake in various food service companies and restaurants, including Jamba Juice and Trulia.[34][35] He also holds stakes in several Oklahoma City restaurants, including Irma's Burger Shack,[3] Deep Fork Grill,[3] The Coach House,[36] Republic Gastro Pub,[37] Metro Wine Bistro & Bar,[3] Provision Kitchen,[38] and Pops. McClendon opened Pops, a burgers and soda restaurant on the historic Route 66 highway in Arcadia, Oklahoma, in 2007.[39]

From 2004 to 2008, McClendon ran a $200 million hedge fund, Heritage Management Company LLC, with Tom Ward.[40] He also invested $35 million in ProCure Treatment Centers Inc., a company with three proton-therapy based cancer treatment centers, in 2008.[41][42]

From 2004 to 2006, McClendon bought almost 400 acres (160 ha) of mostly undeveloped dunes on the east coast of Lake Michigan and the Kalamazoo River for $39.5 million. He had previously secured a half-interest on the land in 2004.[43] In 2006, the five-member Township Board representing Saugatuck, Michigan voted unanimously to rezone the land, making development more difficult. The Township Board supported the views of local citizens and the Saugatuck Dunes Coastal Alliance, who argued that McClendon's plans for development would irrevocably damage the property.[43] McClendon continued with the land purchase, and in 2007 his legal team began discussions of scaling back the legal restrictions on the land with township officials.[43] In 2009, McClendon sold 171 acres (69 ha) of the land to the Western Michigan Land Conservancy.[43][44] In December 2010, McClendon filed a federal lawsuit attempting to overturn the zoning laws[43] and a settlement was reached in 2012[45] which voided Saugatuck's 2006 rezoning.[45]

From 2008 to 2013, McClendon was one of the U.S.'s largest landowners, owning more than 100,000 acres (40,000 ha).[46]

NBA Oklahoma City Thunder[edit]

McClendon is an original member of the Professional Basketball Club LLC, which owns the NBA Oklahoma City Thunder franchise.[47] He was a part of the team that moved the Seattle Supersonics to Oklahoma City in 2008, where they were renamed the Oklahoma City Thunder. At the time the team moved, McClendon owned 20% of the franchise.[48] Prior to the move, in 2008, McClendon was quoted in The Oklahoma City Journal Record, saying he "didn't buy the Seattle Supersonics to keep them in Seattle". The NBA fined McClendon $250,000 in response, as his statement contradicted the organization's publicized intentions at the time.[48][49][50]

In April 2014, McClendon purchased more shares in the Oklahoma City Thunder franchise from G. Jeffrey Records Jr.[51]

Philanthropy, community and political involvement[edit]

McClendon has made sizable donations to and serves on the board of directors for many municipal and private organizations in Oklahoma City, including the Boathouse District and Boathouse Foundation,[52] The McClendon Family Boys and Girls Club of OKC,[53] the Oklahoma City Chamber of Commerce,[54] Oklahoma State Fair,[55] and Oklahoma City Public Schools.[56] He has also donated to Oklahoma City arts organizations, including the Lyric Theatre,[57] Ballet Oklahoma,[57] Oklahoma Museum of Art,[57] Arts Council of Oklahoma City,[57] the Oklahoma Heritage Foundation[58] and the Oklahoma City Philharmonic.[57]

Since 2011, McClendon has hosted an annual event for local Boy Scouts at his Arcadia Farm property.[59] He has also donated approximately $15 million to Duke University and $12.5 million to the University of Oklahoma.[3]

Honors and awards[edit]

McClendon was inducted into the Oklahoma Heritage Foundation's Oklahoma Hall of Fame in 2007,[58] and in 2009, he was a top finalist for CEO of the Year at the Platts Global Energy Awards.[60] In 2010, U. S. Steel Tubular Products, Inc., a subsidiary of United States Steel Corporation, gave McClendon the Chief Roughneck Award, which honors the lifetime achievements of petroleum industry leaders.[61] In 2011, he was awarded the Ernst & Young National Entrepreneur Of The Year in Energy, Cleantech and Natural Resources.[62] In 2013, the Heritage Hall Alumni Association named McClendon, who graduated in 1977, the recipient of its Distinguished Alumni Award.[63]

Personal life and interests[edit]

McClendon lives in Oklahoma City with his wife, Katie McClendon.[3] They have three adult children named Jack, Callie and Will.[3] Through his wife, he is related to supermodel Kate Upton.[3]

McClendon's personal wine collection was estimated at one time to include more than 100,000 bottles.[64] He also holds an extensive collection of antique maps of Oklahoma.[3]

References[edit]

  1. ^ a b c d e Rob Wile (30 January 2013). "The Rise And Shocking Fall Of Energy Titan Aubrey McClendon". Business Insider. Retrieved 4 March 2015. 
  2. ^ a b David E. Newton, PhD (2015). Fracking: A Reference Handbook. ABC-CLIO. Retrieved 5 March 2015. 
  3. ^ a b c d e f g h i j k l m n John Shiffman (7 June 2012). "Special Report: The lavish and leveraged life of Aubrey McClendon". Reuters. Retrieved 4 March 2015. 
  4. ^ a b c d e f Gregory Zuckerman (2013). The Frackers: The Outrageous Inside Story of the New Energy Revolution. Penguin Books Limited. Retrieved 4 March 2015. 
  5. ^ a b c d e f g Russell Gold (2014). The Boom: How Fracking Ignited the American Energy Revolution and Changed the World. Simon & Schuester. Retrieved 4 March 2015. 
  6. ^ a b c d Christopher Helman (5 October 2011). "The Two Sides of Aubrey". Forbes. Retrieved 4 March 2015. 
  7. ^ "Chesapeake Energy Corp.". Wall Street Journal. Retrieved 4 March 2015. 
  8. ^ Rick Robinson (21 July 2002). "Oil company grows to maturity". NewsOK. Retrieved 4 March 2015. 
  9. ^ Darren Barbee (January 30, 2013). "Visionary CEO Aubrey McClendon Out At Chesapeake". Oil and Gas Pro. Retrieved 9 March 2015. 
  10. ^ Terzah Ewing (27 February 1997). "Chesapeake Energy Is a Gusher". The Wall Street Journal. Retrieved 27 March 2015. 
  11. ^ Don Mecoy (23 April 2005). "Top Gun Magazine lauds Chesapeake CEO for performance". NewsOK. Retrieved 5 March 2015. 
  12. ^ a b c d Jeff Goodell (1 March 2012). "The Big Fracking Bubble: The Scam Behind Aubrey McClendon's Gas Boom". Rolling Stone. Retrieved 5 March 2015. 
  13. ^ Gregory Zuckerman (2 November 2014). "In Oil's Slide, Echoes of a Fall". The Wall Street Journal. Retrieved 6 March 2015. 
  14. ^ Christopher Helman (5 October 2011). "The Two Sides of Aubrey McClendon, America's Most Reckless Billionaire". Forbes. Retrieved 5 March 2015. 
  15. ^ Scott DeCarlo (28 April 2011). "The CEO 20-20 Club". Forbes. Retrieved 5 March 2015. 
  16. ^ Rick Stouffer (29 September 2014). "Canada's Encana acquiring independent Athlon Energy in $7.08 Billion Deal". Shale Media Group. Retrieved 25 March 2015. 
  17. ^ Bill White, "Thanks due to McClendon, Chesapeake employees", The Oklahoman, May 26, 2012.
  18. ^ Anna Driver (18 April 2012). "Special Report: Chesapeake CEO took $1.1 billion in shrouded personal loans". Reuters. Retrieved 5 March 2015. 
  19. ^ Sabira Chaudhuri (20 February 2013). "Chesapeake Financing Review Finds No Improper Benefit to CEO". Private Equity and Venture Capital: Dow Jones. Retrieved 9 March 2015. 
  20. ^ Mark Maremont (8 May 2012). "Chesapeake's Private Jets in Cross Hairs". The Wall Street Journal. Retrieved 9 March 2015. 
  21. ^ "Chesapeake Shareholders in Historic Revolt". The Wall Street Journal. 8 June 2012. 
  22. ^ Zain Shauk (29 January 2013). "Chesapeake chief quits, cites 'philosophical differences'". Fuel Fix. Retrieved 9 March 2015. 
  23. ^ Brian Grow (30 January 2013). "Chesapeake CEO McClendon steps down after year of tumult". Reuters. Retrieved 5 March 2015. 
  24. ^ Tara LaChappelle (30 May 2012). "Chesapeake Valuation Seen Luring Major Deal: Real M&A". Bloomberg Business. Retrieved 5 March 2015. 
  25. ^ United States Securities and Exchange Commission (10 June 2005). "Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934". Retrieved 9 March 2015. 
  26. ^ Paul Monies (17 February 2015). "Chesapeake and former CEO McClendon still intertwined through data sharing, separation agreements". NewsOK. Retrieved 9 March 2015. 
  27. ^ a b Christopher Helman (17 February 2015). "Chesapeake Sues McClendon, Alleging Theft Of 'Trade Secrets'". Forbes. Retrieved 5 March 2015. 
  28. ^ a b Christopher Helman (27 May 2015). "Aubrey McClendon: Fracking's Cowboy Rides Again". Forbes. Retrieved 28 May 2015. 
  29. ^ a b Brianna Bailey (17 April 2013). "McClendon starts new energy company down the street from Chesapeake". NewsOK. Retrieved 5 March 2015. 
  30. ^ Tom Knox (11 December 2014). "Big chunk of American Energy's 600 workers followed McClendon from Chesapeake Energy". Columbus Business First. Retrieved 5 March 2015. 
  31. ^ "Operations". American Energy Partners. Retrieved 5 March 2015. 
  32. ^ Bryan Walsh (2 February 2012). "Exclusive: How the Sierra Club Took Millions From the Natural Gas Industry—and Why They Stopped [UPDATE]". Time Magazine. Retrieved 5 March 2015. 
  33. ^ "Energy: The Pros and Cons of Shale Gas Drilling". CBS News. 12 November 2010. Retrieved 5 March 2015. 
  34. ^ Daniel Gilbert (7 May 2012). "The Many Hats of Aubrey McClendon". The Wall Street Journal. Retrieved 5 March 2015. 
  35. ^ John Cook (11 July 2008). "Seattle Sonics co-owner is lead Trulia backer". Seattle PI. Retrieved 5 March 2015. 
  36. ^ Steve Lackmeyer (3 January 2014). "Owners of Oklahoma City restaurant, gallery buy building from Chesapeake Energy". The Oklahoman. Retrieved 5 March 2015. 
  37. ^ David Cathey (29 December 2010). "A Toast to 2010: The Year in Food". NewsOK. Retrieved 5 March 2015. 
  38. ^ Heather Hope (15 February 2015). "New Development Planned For Nichols Hills Plaza". Oklahoma's Own News 9. Retrieved 24 March 2015. 
  39. ^ Steve Lackmeyer (7 August 2007). "Route 66 fans 'POPS' a top at new store". NewsOK. Retrieved 5 March 2015. 
  40. ^ Lawrence Delevigne (27 October 2014). "Ex-Chesapeake boss McClendon backs poker-star hedgie". CNBC News. Retrieved 5 March 2015. 
  41. ^ "ProCure Treatment Centers Inc. receives $35 million from Oklahoma’s Aubrey McClendon". OKC.biz. 15 May 2008. Retrieved 5 March 2015. 
  42. ^ Jaimy Lee (18 September 2014). "As a proton therapy center closes, some see it as a sign". Modern Healthcare. Retrieved 12 June 2015. 
  43. ^ a b c d e Bryan Gruley (21 December 2010). "A Billionaire's Dune Duel". Wall Street Journal. Retrieved 5 March 2015. 
  44. ^ Brian McVicar (22 December 2009). "Saugatuck Dunes sale completed; Land Conservancy of West Michigan now owns Aubrey McClendon land". Michigan Live. Retrieved 24 March 2015. 
  45. ^ a b John Agar (11 June 2012). "Saugatuck Township settlement with Aubrey McClendon approved by federal judge". MLive. Retrieved 6 March 2015. 
  46. ^ Jeff Reed (2014). "A Short Memory & Thick Skin: Aubrey McClendon's Ongoing Legacy". Oil Pro. Retrieved 5 March 2015. 
  47. ^ Associated Press (23 August 2007). "NBA fines McClendon for comments on moving Sonics". ESPN NBA. Retrieved 5 March 2015. 
  48. ^ a b Christopher Helman (13 June 2012). "The Sordid Deal That Created The Okla. City Thunder". Forbes. Retrieved 5 March 2015. 
  49. ^ "NBA fines McClendon for comments on moving Sonics". ESPN News. 23 August 2007. Retrieved 13 July 2015. 
  50. ^ Percy Allen (23 August 2007). "Sonics co-owner McClendon fined $250K". The Seattle Times. Retrieved 13 July 2015. 
  51. ^ "OKC ownership group expands". ESPN News. 18 April 2014. Retrieved 10 March 2015. 
  52. ^ Helen Ford Wallace (10 August 2009). "Oklahoma City Boathouse Foundation members have dinner at Chesapeake Boathouse". NewsOK. Retrieved 5 March 2015. 
  53. ^ "Board of Directors". Boys and Girls Club of OKC. Retrieved 5 March 2015. 
  54. ^ Miguel Bustillo (29 May 2012). "Chesapeake's Hometown Woes". Wall Street Journal. Retrieved 5 March 2015. 
  55. ^ "State fair governing board names three as directors". The Oklahoman. 21 January 2002. Retrieved 5 March 2015. 
  56. ^ "Old friends receive Wall of Fame honors". OKC Friday. Retrieved 5 March 2015. 
  57. ^ a b c d e "Energy companies help fund local gropus". The Oklahoman. 5 March 2005. Retrieved 5 March 2015. 
  58. ^ a b "Tulsan to be inducted into Hall of Fame: A Muskogee native is also among eight people to be honored.". Retrieved 5 March 2015. 
  59. ^ Ed Godfrey (19 May 2011). "Sporting Clay Shoot to benefit Boy Scouts on Saturday at Arcadia Farm". NewsOK. Retrieved 5 March 2015. 
  60. ^ "Platts Global Energy Awards Finalists". Platts Global Energy. 2011. Retrieved 5 March 2015. 
  61. ^ "Chief Roughneck Award Winners". American Oil and Gas Historical Society. 2014. Retrieved 5 March 2015. 
  62. ^ "Ernst and Young National Winners Network" (PDF). Winter 2011. Retrieved 5 March 2015. 
  63. ^ "McClendon Receives 2013 HHAA Distinguished Alumni Award". Heritage Hall Alumni Association. 12 August 2013. Retrieved 5 March 2015. 
  64. ^ Christopher Helman (5 October 2011). "In His Own Words: Chesapeake's Aubrey McClendon Answers Our 25 Questions". Forbes. Retrieved 5 March 2015. 

External links[edit]