Quantcast

Former Chesapeake Energy CEO Aubrey McClendon Is Back to Frack Ohio With Investment of $1.7B

Energy

By Steve Horn

Former Chesapeake Energy CEO and Founder Aubrey McClendon is back in the fracking game in Ohio's Utica Shale in a big way, receiving a permit to frack five wells from the Ohio Department of Natural Resources on Nov. 26.

Aubrey McClendon, the former CEO of fracking giant Chesapeake Energy has just received permits for fracking wells in Ohio's Utica shale.

"The Ohio Department of Natural Resources awarded McClendon's new company, American Energy Utica LLC, five horizontal well permits Nov. 26 that allows oil and gas exploration on the Jones property in Nottingham Township, Harrison County," a Dec. 6 article appearing in The Business Journal explained. "In October, American Energy Utica announced it has raised $1.7 billion in capital to secure new leases in the Utica shale play."

McClendon is the former CEO of fracking giant Chesapeake Energy and now the owner of American Energy Partners, whose office is located less than a mile away from Chesapeake's corporate headquarters.

The $1.7 billion McClendon has received in capital investments for the purchase of 110,000 acres worth of Utica Shale land came from the Energy & Minerals Group, First Reserve Corporation, BlackRock Inc. and Magnetar Capital.

McClendon—a central figure in Gregory Zuckerman's recent book The Frackers—is currently under investigation by the U.S. Securities and Exchange Commission. He left Chesapeake in Jan. 2013 following shareholder upset over controversial business practices.

He was given a $35 million severance package, access to the company's private jets through 2016 and a 2.5 percent stake in every well Chesapeake fracks through June 2014 as part of the Founder's Well Participation Program.

Little discussed beyond the business press, McClendon has teamed up with a prominent business partner for his new start-up: former ExxonMobil CEO Lee Raymond.

Power Mapping McClendon's New Venture

"[Lee] Raymond has emerged as a director alongside Mr. McClendon in American Energy Ohio Holdings LLC... according to [an SEC] regulatory filing," The Wall Street Journal reported in October

The former Exxon CEO's son John Raymond is the Managing Partner, Chief Financial Officer and Chief Executive Officer of Minerals & Energy Group, currently the largest capital investor in McClendon's start-up venture and is also a partner in McClendon's new venture. Ryan Turner, Chesapeake's Stock Plan Manager has also joined the team as a partner.

"Jefferies Group LLC gave financial advice to American Energy" for the deal, according to Bloomberg—and is listed as such on American Energy Ohio Holdings LLC's SEC Form D.

Ralph Eads III—McClendon's fraternity brother at Duke University—serves as Global Head of Energy Investment Banking at Jefferies Group, Inc.

"Mr. Eads...is a prince of this world," the New York Times reported in Oct. 2012. "His financial innovations helped feed the gas drilling boom, and he has participated in $159 billion worth of oil and gas deals since 2007."

Eads maintained tight financial ties with McClendon when he was at the helm of Chesapeake Energy. The flow chart below depicts the financial and career ties binding Eads and McClendon.

High Stakes Game

In teaming up with Lee Raymond, the former CEO of ExxonMobil—notorious for its role in funding climate change denial—and his brother John, McClendon has shown he is back in Ohio ready to play ball.

But a recent Environmental Integrity Project report indicates the life-cycle climate change impacts of fracking are more severe than previously thought.

With the U.S. Navy predicting an ice-free summer by 2016 due to climate change, it's a ball game with undeniably high stakes.

Visit EcoWatch’s FRACKING and CLIMATE CHANGE pages for more related news on this topic.

 

EcoWatch Daily Newsletter

Pexels

By Marlene Cimons

Scientist Aaswath Raman long has been keen on discovering new sources of clean energy by creating novel materials that can make use of heat and light.

Read More Show Less
Pexels

By SaVanna Shoemaker, MS, RDN, LD

The aloe vera plant is a succulent that stores water in its leaves in the form of a gel.

Read More Show Less
Sponsored
Attendees seen at the Inaugural Indigenous Peoples Day Celebration at Los Angeles Grand Park on Oct. 8, 2018 in Los Angeles. Chelsea Guglielmino / Getty Images

By Malinda Maynor Lowery

Increasingly, Columbus Day is giving people pause.

Read More Show Less
Westend61 / Getty Images

By Brianna Elliott, RD

Hunger is your body's natural cue that it needs more food.

Read More Show Less
Young activists and their supporters rally for action on climate change on Sept. 20 in New York City. Drew Angerer / Getty Images

By Jeff Turrentine

More than 58 million people currently living in the U.S. — 17 percent of the population — are of Latin-American descent. By 2065 that percentage is expected to rise to nearly a quarter. Hardly a monolith, this diverse group includes people with roots in dozens of countries; they or their ancestors might have arrived here at any point between the 1500s and today. They differ culturally, linguistically and politically.

Read More Show Less
Sponsored
Thu Thai Thanh / EyeEm / Getty Images

By Jillian Kubala, MS, RD

Commonly consumed vegetables, such as spinach, lettuce, peppers, carrots, and cabbage, provide abundant nutrients and flavors. It's no wonder that they're among the most popular varieties worldwide.

Read More Show Less
Petrochemical facilities in the Houston ship channel. Roy Luck / CC BY 2.0

By Tara Lohan

Prigi Arisandi, who founded the environmental group Ecological Observation and Wetlands Conservation, picks through a heap of worn plastic packaging in Mojokerto, Indonesia. Reading the labels, he calls out where the trash originated: the United States, Australia, New Zealand, United Kingdom, Canada. The logos range from Nestlé to Bob's Red Mill, Starbucks to Dunkin Donuts.

The trash of rich nations has become the burden of poorer countries.

Read More Show Less
Pixabay

By Lisa Wartenberg, MFA, RD, LD

Caffeine's popularity as a natural stimulant is unparalleled.

Read More Show Less