100 years ago, he’d have been John D. Rockefeller

Saudi Finance Minister

Curse you, McClendon!

Aubrey McClendon is dead, probably by suicide.

Aubrey McClendon, an Oklahoma wildcatter who helped pioneer the shale energy boom, died in a fiery car crash Wednesday, a day after he was indicted by a federal grand jury on charges of conspiring to rig the price of oil and gas leases.

Mr. McClendon propelled the rebirth of U.S. energy production as the co-founder of Chesapeake Energy Corp., leading a rush to lease land around the country to extract natural gas and oil trapped in shale rock formations through a technique made famous by its nickname, fracking.

Mr. McClendon, a graduate of Duke University, got his start in the oil business on the ground floor as a leasing agent, or “landman.” In 1989, he formed Chesapeake with a fellow landman, and occasional competitor, Tom Ward, with $50,000.

Mr. McClendon grasped the promise of hydraulic fracturing, a drilling technology that could unlock formerly untapped deposits of oil and natural gas from dense underground sedimentary rock formations across the U.S.

He in turn commanded what he described as an army of landmen that swarmed regions likely to hold these energy riches, photographing county deed records en masse and going door-to-door to persuade owners to lease the rights to drill beneath their land.

At one point, Mr. McClendon spent more than $2 billion leasing rights to drill beneath roughly 5% of Ohio, where he believed the gas-laden Utica Shale would be the “biggest thing to hit Ohio since the plow.”

McClendon set the world awash with cheap energy, and the effects of that are just beginning to be seen, but already, it seems clear, to me at least, that there are going to be major changes in the Middle East and even Russia as their oil revenues plunge, and cheap oil has driven the last nail into Venezuela’s coffin. The man was a world-changer, and I’m sad to see him meet his death this way.


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18 responses to “100 years ago, he’d have been John D. Rockefeller

  1. Cos Cobber

    I saw McClendon on CNBC many times in the 2000s and I used to follow his stock. He was so full of bluster I immediately saw another Dennis Kozlawski (sp) of Tyco fame. The dragging book would have happened with or without McClendon.

  2. AJ Nock

    I’d want to see the dental records to make sure he’s really dead. I wouldn’t be surprised if he’s in Argentina with his millions.

  3. Anonymous

    Atlas shrugged?

  4. Blue Devils Can Suck it

    You had me hating him at “Graduate of Duke University”.

  5. Oh, it's for my name

    He’s playing tennis with Ken Lay, following minor plastic surgery.

  6. anon

    If you look at his suicide from a practical point of view, I see it as a ‘good thing’ in that he saved his family from years of courtroom drama and publicity. If he’s as smart as others say he is, he long ago moved all appreciable assets offshore and only his wife knows the password. That’s my theory at least.

  7. Publius

    When I saw the headline, I thought that AM went out the way he lived his life, pedal to the metal. I have been fortunate in my career to have met many entrepreneurs of different stripes, some successful some not, but the one common trait of all of them was that they had THE RELIGION. What I mean by that is that they had a vision and an unshakable belief that they were right and big changes would happen if they stayed focused and pursued their vision with energy and vigor 24/7. They would buttonhole anyone who would listen and like a wound up street preacher would proceed to show the ignorant the Promised Land.

    Unfortunately many like AM, were blind to both ethical issues, real or perceived and the inability to take the foot of the pedal when the road became dangerous. Personal and business were 1 and there was no other mode than “go hard”. I would guess that he will be vilified for his ethical lapses and his living large personae by those who seek safety in the daily routine of life but who ironically benefit from someone like AM. A flawed individual? Yes, just like all of us, but living large and hard is not an accepted way of life in the age of envy.

    As noted by the blogger, AM was one of a small group of risk taking entrepreneur who in their own unique way have done more to tip the geopolitical calculus in favor of the good guys (that would be US) in the post Cold War era than any of those feckless elites at Foggy Bottom including that former Sec of State who is now running for president. I will place my bets on those like AM over the political class any day and I am sad that he felt, apparently, that his life was not worth living.

    • Cos Cobber

      While I consider myself a champion of business and capitalism, I always saw greed and fraud when AC opened his mouth. AQR probably has a quant analysis for CNBC/FoxBiz/Bloomberg appearances + degree of hyperbole in appearance + negative press = short stock in 2 to 4 years.

      • Publius

        Greed is not a crime and fraud has to be proven in court, it’s not something you “see”. Many advancements that have benefited the human condition through history were in part driven by greed.

        • Cos Cobber

          You are reading too much into my comment. I’m on your side on capitalism. When I say “greed,” what I mean is I saw a liar..someone who will have trouble doing the right thing when given an opportunity when they think nobody is looking or is smart enough to notice.

  8. Anonymous

    If he really saw the only answer to an indictment as suicide, I think that says it all.

    • Publius

      I don’t think it says anything at all at this point. The government has been running around with all sorts of indictments in the wake of the 2008 financial crisis looking for all sorts of bad actors to put in jail to satisfy the mob; bankers, mortgage bankers, hedge funds (insider trading) and has by an large come up empty. Perhaps they were only bad actors and not criminals, no?

      Additionally the Administrative State has piled on and has put the boot on the neck of the political enemies of the state (think IRS). Indictments are not guilty verdicts witness the absolute wipe out of all of the “convicted” insider traders whose convictions were tossed by the higher courts. What this does show is the power of the government to use its weight against private citizens. AM guilt was not established by the indictment only that there was enough evidence to move forward with a formal indictment. That his took his life, I presume here, may be more a reflection of the strain of both business and personal issues that none of us know anything about.

  9. Millenial

    I think the bigger issue is that he was probably insolvent. He had borrowed $1.55bn from EIG against his personal interest in CHK wells. My guess is that those interests are worth a fraction of that amount.