The former head of Chesapeake Energy has been indicted on antitrust charges by the U.S. Department of Justice.
Aubrey McClendon made a name for himself at Chesapeake Energy, turning it into the largest natural gas producer in the United States.
A federal grand jury indicted him on charges that he conspired with an unnamed company to manipulate the price of oil and gas leases in Oklahoma. The allegations describe McClendon and another company deciding ahead of time who would win a lease auction, rigging the bids to keep prices low. If Chesapeake won a lease, it would give the competing company a slice of the winnings. Related: Oil Finds Some Support As U.S. Output Falls
Chesapeake was one of the most aggressive in acquiring land during what was a land rush in the years during his tenure between 2007 and 2012. Chesapeake controlled over 16 million acres in multiple states across the country at one point. McClendon became one of the highest profile CEOs in the industry, an icon of the shale gas revolution.
“The charge that has been filed against me today is wrong and unprecedented,” Mr. McClendon said in a statement. “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.” Related: A Shrewd Approach To Oil Investing
The charges carry a maximum sentence of 10 years in prison and a $1 million fine. Chesapeake itself is not expected to be hit with any charges.
McClendon left Chesapeake Energy in 2012 after shareholders revolted against his management. His aggressive expansion also left the company with low levels of cash and a high debt burden. Shareholders, including activist investor Carl Icahn ousted him. After McClendon left he setup American Energy Partners LP, a competing shale gas driller that would focus on drilling in the shale basins in Texas, Oklahoma, Pennsylvania, and Ohio.
By Charles Kennedy of Oilprice.com
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