Aubrey McClendon was killed in a car crash in Oklahoma City Wednesday, police said. His death comes a day after he was charged with rigging bids for oil and natural gas leases.
Three years after being forced out of Chesapeake Energy Corp., the natural gas company he co-founded, the 56-year-old was facing allegations he worked with an unidentified competitor to keep the price of leasing drilling rights artificially low.
McClendon was accused of orchestrating a scheme between two “large oil and gas companies” to not bid against each other for leases in northwest Oklahoma from December 2007 to March 2012, the Justice Department said Tuesday in a statement. The charge is “wrong and unprecedented,” McClendon said Tuesday in a separate statement.
The grand jury indictment came after the hydraulic fracturing process McClendon championed for accessing trapped oil and gas has caused prices to crater. Chesapeake has sunk 39 percent this year, including losing a third of its value in a single day last month after a report, which the Oklahoma City-based company denied, that it had hired lawyers for potential bankruptcy.
The conspirators allegedly 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. Mark Abueg, a spokesman for the Justice Department, declined to comment on their identities.
“The Justice Department has taken business practices well-known in the Oklahoma and American energy industries that were intended to, and did in fact, enhance competition and lower energy costs and twisted these business practices to allege an antitrust violation that did not occur,” McLendon’s lead lawyers, Abbe Lowell of Chadbourne & Parke and Williams & Connolly’s Emmet Flood, said in a statement Tuesday. “We will show that this prosecutorial overreach was completely unjustified.”
During his almost quarter-century at the helm of Chesapeake, 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 U.S. source of gas.
(c) 2016, Bloomberg ยท David McLaughlin, Joe Carroll – Kartikay Mehrotra and Dan Murtaugh contributed.
