The night before Aubrey McClendon died, the oil-and-gas pioneer was expected at a private dinner here with potential business partners. Among them: Vicente Fox, the former president of Mexico.

Around sunset, the group gathered in a wood-paneled dining room at the exclusive Beacon Club. A waiter brought plates of sea bass and lamb. Three bottles from McClendon’s wine collection were opened, including a 2010 Napa Valley red bearing the logo of his business, American Energy Partners.

But McClendon, who reveled in his reputation as the life of the party, never showed, said four people who were there.

The group soon learned why. U.S. prosecutors had just announced McClendon’s indictment for allegedly conspiring with a competitor to suppress land prices by rigging bids while leading his former company, Chesapeake Energy. People at the dinner said McClendon sent an emissary and his regrets. Fox and others signed the empty wine bottles, intending to present them to McClendon the next day.

They never had the chance.

McClendon died the following morning, March 2, when his car crashed at high speed into an overpass wall along a two-lane road here. The accident remains under investigation.

The sudden end to his lavish and leveraged life came as McClendon, 56, confronted challenges more consequential than any he had faced before. He’d been forced to part with oil and gas-well interests, one of his best sources of cash. His biggest investor was abandoning him. He had just agreed to settle a legal claim that chipped at his reputation. And now, with the indictment, a protracted legal battle for his personal freedom loomed.

Aubrey McClendon Attracted Outrage and Lots of Natural Gas

A Reuters review of records and interviews show:

  • McClendon no longer controlled the bulk of his most bankable venture, the one that helped make him a billionaire while he was CEO of Chesapeake: his stake in thousands of company oil and gas wells awarded to him during his tenure. Records show he was in the process of transferring the last of these interests to a company controlled by a close friend, Clayton Bennett of Dorchester Capital.
  • His largest investor was halting all new business with him. The backer, Energy & Minerals Group of Houston, informed its investors just before his death that McClendon no longer held any leadership roles in related firms.
  • McClendon had recently reached an undisclosed, tentative agreement to pay at least $3 million to Chesapeake to settle a legal dispute in which his former company had accused him of taking confidential data with him when he left in 2013 to set up his new company.
  • By fighting the U.S. criminal indictment, he faced a potential public airing of his business tactics. McClendon’s own emails were expected to represent the bulk of the government’s evidence against him, say two people familiar with the matter.

As authorities try to determine what caused the fatal crash, those who knew McClendon are also searching for answers. The Aubrey they knew had a reputation for overspending on land leases, not conspiring to keep prices low. They say he was an eternal optimist, a visionary who helped revolutionize an industry and shape the city he called home.

The Aubrey McClendon who was expected at the Beacon Club dinner hadn’t simply weathered passing storms. Often, he had tamed them.


McClendon knew he was under criminal investigation: AEP disclosed in a filing last year with U.S. securities regulators that the Justice Department was investigating him over the potential antitrust violations. His former company, Chesapeake, has been cooperating with authorities in return for “conditional leniency” from the Justice Department. As a result, Chesapeake has said, the company did not expect to face prosecution or penalties.

But the indictment caught McClendon off guard, according to people familiar with the matter.

His legal team had met with senior Justice Department prosecutors three times in late 2015 to try to persuade them not to indict McClendon, a person familiar with the matter said. McClendon had been expecting a response; instead, he was indicted without warning, the person said.

Reflecting the gravity of the probe, last fall McClendon hired famed trial attorney Abbe Lowell, who has represented politicians, lobbyists and entertainers in trouble. Among his past clients: former U.S. presidential candidate John Edwards and rap star Sean “Diddy” Combs. Lowell was chief counsel for the defense during President Bill Clinton’s impeachment trial in the U.S. Senate.

In December, McClendon’s lawyers gave a PowerPoint presentation to Assistant Attorney General Bill Baer at the Justice Department in Washington, two people familiar with the matter said.

Lowell told Baer that McClendon’s prosecution would be a first of its kind in the oil and gas industry, said a person familiar with the exchange. Lowell argued that cooperation in the industry through joint bidding ventures is common and perfectly legal. An indictment, he told the Justice officials, would mark an unfair application of criminal antitrust laws to the sector.

Part of the discussion focused on emails between McClendon and former SandRidge Energy chief executive Tom Ward, in which the two longtime friends discussed coordinating bids on energy acreage. The emails relate to a handful of deals the two men discussed among many innocuous transactions, two people familiar with the matter said.

Ward, who co-founded Chesapeake with McClendon and left to run SandRidge in 2006, was not named in the U.S. indictment against his old friend. But people familiar with the case said he is the person referred to in the indictment as McClendon’s unidentified alleged co-conspirator.

The indictment alleged that McClendon and the co-conspirator agreed not to bid against each other for certain parcels of land in northwest Oklahoma in order to keep prices down. In return, each party would receive a share of the property later.

Lawyers haggled over the intent of the messages between the two men, with McClendon’s side arguing that what some people might consider a conspiratorial tone could instead be read as two professionals trying to work out a legitimate agreement to efficiently develop an area through joint ventures.

A person familiar with the investigation countered that assertion, saying the emails between McClendon and Ward “are direct as they can possibly be.” Though the indictment doesn’t cite specific evidence, it alleges that the two men consummated the proposed rigging of bids.

Ward hasn’t been charged with any wrongdoing. Spokesmen for Ward’s new company, Tapstone Energy, and for Chesapeake did not return calls for comment. SandRidge and a Justice Department official declined to comment. AEP’s chief legal officer, Tom Blalock, did not respond to requests for comment.

Why Chesapeake Energy Shares Have Rallied Since Ex-CEO’s Sudden Death

During the Justice Department meeting, a person familiar with the discussion said, McClendon’s lawyers also argued that his contributions to the city, state and national economy should be taken into account. They expressed concern about the harm an indictment might cause to AEP, SandRidge, their employees, the Oklahoma City community and the natural gas industry. Baer asked questions, two sources said, and requested more information.

The day after McClendon died, prosecutors filed a motion to dismiss the indictment. But officials said their investigation of potential antitrust violations in the oil and gas industry is continuing.


McClendon is credited and sometimes cursed for championing the drilling technique known as hydraulic fracturing, or fracking. The technology led to a boom in U.S. oil and natural gas production from porous rock formations, known as shale, that had been hard to tap. And fracking made him a billionaire. By 2005, Chesapeake was the second-largest U.S. natural gas producer, after Exxon Mobil.

In 2012, Reuters reported in a series of articles that McClendon enjoyed controversial perks at shareholder expense, operated a secretive, $200 million hedge fund from inside Chesapeake’s offices, and received as much as $1.4 billion in loans against his well interests. In response to the news, his board stripped him of his chairmanship, and he resigned in 2013 to start AEP.

Some energy executives who did business with McClendon say they are puzzled by the charge that he conspired to suppress land prices. Brandt Temple, CEO of Sunrise Exploration in New Orleans, is one of them. Temple was negotiating a deal with McClendon that was supposed to close the day of the deadly crash.

“What he was indicted for, which is keeping prices down, that’s typically never what he did,” Temple said. “With my experience with Aubrey…, he was doing it the other way,” paying as much as $1,000 per acre for land others valued at $300.

Temple’s view was echoed by others in the industry. But emails published by Reuters in 2012 showed that McClendon had indeed tried to suppress land prices elsewhere. In one, McClendon wrote to a rival energy executive that it was time “to smoke a peace pipe” together “if we are bidding each other up.” In another, he wrote: “Should we throw in 50/50 together here rather than trying to bash each other’s brains out on lease buying?”

The Michigan Attorney General investigated, and last year Chesapeake settled criminal antitrust, fraud and racketeering charges, paying $25 million to a victims fund. Chesapeake pleaded no contest to one count each of attempted antitrust violation and false pretenses, both misdemeanors.


McClendon had a deep impact on Oklahoma City in the years he ran Chesapeake. He created tens of thousands of jobs and showered tens of millions of Chesapeake’s and his own dollars on the community. He helped bring the NBA’s Oklahoma City Thunder and an Olympic-class rowing venue to town. He secured the city’s first Whole Foods Market, brought upscale shopping and dining to the Chesapeake neighborhood and contributed to many charities, from local elementary schools to Boy & Girls Clubs.

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“When Aubrey left Chesapeake, there was an audible gasp from the nonprofit community in this city,” former governor Frank Keating, a past Chesapeake board member, said at the funeral.

In the March 2 edition of the hometown paper, The Oklahoman, McClendon’s indictment was played bigger than the local results in the previous day’s Super Tuesday U.S. presidential nominating contest, featuring upset wins by Senators Ted Cruz and Bernie Sanders.

His death dominated the next day’s front page and accounted for almost four full pages inside. A columnist wrote that if Oklahoma City ever chisels its own Mount Rushmore, “Aubrey is on it.”

For nearly a week following his death, flags flew at half staff at banks, churches and energy businesses. Stores near the Chesapeake campus closed so employees could attend the funeral, which was held in a mega-church and drew a standing-room crowd of more than 3,000.

Several hundred mourners also attended a sunrise memorial Saturday. They included Brant Briggs, an usher at Chesapeake Arena, who served McClendon and his old friend and fellow Thunder owner, Bennett, in their side-by-side front-row seats. “He had such a kind, generous heart,” Briggs said. “He will be missed by so many people.” The Thunder honored McClendon with a pregame ceremony this Wednesday that included video from his introduction into the Oklahoma Hall of Fame.

McClendon’s style wasn’t for everyone, acknowledged his friend and former Chesapeake executive Mike Stice, who attended the dinner at the Beacon Club the night of the indictment.

“He was a risk taker beyond most people’s comfort level,” Stice said.

Many people in Oklahoma are talking about the possibility that the car crash wasn’t an accident – that a despondent McClendon may have taken his own life. His family hasn’t commented on this talk, but at his funeral, his children spoke of his sunny optimism. Other people close to him dismissed the idea of suicide, saying the man they knew projected a positive, seize-the-day attitude.

They also noted that he’d withstood adversity before. In 2012, after Chesapeake removed him as chairman, he bucked up employees at a town-hall-style meeting, according to a recording.

“It ends by winning, at the end of the day, delivering on what you are doing, what you believe in and what you will continue to do,” he told the staff. “You just have to outlast it.”

Tom Price, who worked for McClendon for more than 20 years, described him as “the toughest guy I ever met. The notion that Aubrey in any way, shape or form (might) bring his life to an end voluntarily is insane.”

Several friends in Oklahoma City noted that McClendon had recently become a grandfather. As was his custom, every morning he sent AEP employees a quote of the day. On the day his grandchild was born, he wrote, “A baby is God’s opinion that life should go on.”


The indictment says the bid-rigging conspiracy started on Dec. 27, 2007, a time when the energy tycoon’s career was about to accelerate. Chesapeake’s share price closed at $39.12 that day, on its way to an all-time high of $69.40 six months later. The company was amassing drilling rights that would grow to more than 14 million acres, nearly the size of West Virginia.

In the first year of the alleged criminal conspiracy in Oklahoma, Forbes magazine put McClendon’s net worth at $3 billion. In 2012, he dropped off the Forbes 400 list of richest Americans. The magazine’s new estimate: McClendon had a net worth of $500 million.

As oil and gas prices tumbled over the past 18 months, eroding his wealth, McClendon scrambled to raise cash.

In the month before he died, for example, McClendon asked close friends and family members from whom he’d raised money before if they would like to invest again, two people familiar with the situation said. One of these people had participated in an investment round with individual buy-ins of between $50,000 and $100,000 for energy assets in the so-called Utica shale formation in the U.S. Northeast. The person said he turned down the offer this time because he had lost his job in the oil and gas bust.

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In late October, property records and creditor filings show, McClendon staked many of his personal assets as collateral for loans – including his 19 percent stake in the NBA team, property in Oklahoma and Connecticut, antique boats and investments in privately held companies. Some assets had previously been pledged as collateral to other lenders.

McClendon was dipping into his depleted assets to prop up AEP, his new company. Records filed in Oklahoma County Court show that McClendon and an AEP unit called Scoop Energy put up collateral for a loan to Scoop from investor Oaktree Capital. McClendon was personally guaranteeing the loan to Scoop, according to a person familiar with the matter. Oaktree declined to comment.

Another foundation of McClendon’s wealth was under pressure. For many years, he was able to raise cash thanks to an unusual incentive he enjoyed from Chesapeake. The perk, known as the Founder Well Participation Plan, granted McClendon up to a 2.5 percent stake in every well drilled by Chesapeake during his 24-year tenure.

When McClendon left Chesapeake in April 2013, he held onto his well interests through four companies he controlled. As Reuters reported in 2012, mortgage records show that McClendon had borrowed as much as $1.4 billion through those companies by pledging the Chesapeake well interests as collateral.

But as oil and gas prices fell, the cost of operating the wells began exceeding the returns McClendon got from the hydrocarbons they produced. Unable to keep up, he eventually lost control of three of the firms – and thus of any future cash they would generate. Control passed to one of his lenders, EIG Global Energy Partners, a Washington, DC-based private equity firm, Oklahoma County records show. A spokesman for EIG declined to comment.

He gave up another juicy holding last year, the filings show. Arcadia Resources, McClendon’s oldest means of financing his Chesapeake well interests, transferred its assets to Dorchester Resources, controlled by Bennett, his close friend. Bennett did not return a request for comment.

Meet Mr. Gas: Aubrey McClendon (Fortune, 2008)

Another setback hit McClendon the morning that he died – the announcement by EMG that it would cease new investments. This was a major blow: EMG had invested $3 billion with McClendon. Now the $17 billion fund was done with him.

In a letter sent hours before the crash, EMG informed its investors that, as of Feb. 26, McClendon was no longer the CEO or a board member of any EMG portfolio company. The letter also pointed to concerns about McClendon’s indictment.

“These are serious allegations that have been made against McClendon (and could have equally serious implications across the industry) and EMG takes this matter very seriously,” managing partner John Raymond wrote.

An EMG spokeswoman did not respond to requests for comment.

It’s unclear whether McClendon had been informed of the letter’s content before it went out. But the end of McClendon’s collaboration with EMG removed one of his main sources of capital to find and develop land.

McClendon faced at least one more looming debt.

According to three people familiar with the matter, he had tentatively agreed to settle a claim by Chesapeake alleging that he took confidential oil-and-gas-related data with him when he left the company and used the information when he started AEP. AEP has called the claim “meritless.” McClendon too had denied the accusation, and the case was about to be resolved in arbitration. The sources said McClendon, as founder and principal of AEP, had recently agreed to pay Chesapeake more than $3 million.


When the Justice Department announced the indictment March 1, it also issued a statement strongly critical of McClendon.

“Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions,” wrote Baer, the Assistant Attorney General.

McClendon skipped the Beacon Club dinner and issued a response that evening. He called the single conspiracy count against him “wrong and unprecedented.” He added, “I will fight to prove my innocence and to clear my name.”

He was still working close to midnight, a person familiar with the matter said.

McClendon’s movements the next morning could not be confirmed. Three people who received emails from him said the messages revealed nothing amiss.

“He was unfazed,” said one recipient, Franco Hamdan of EIM Capital, who’d attended the Beacon Club dinner the night before as the business partner of former Mexican President Fox. “He was determined and well on his way to make a global shale revolution in Australia, Mexico and Argentina.”

Chesapeake Accuses Founder McClendon of Stealing Secrets to Start

Shortly after 9 a.m., McClendon drove his Chevy Tahoe north along Midwest Boulevard, a two-lane country road. He likely knew the route well: It is a scenic drive from AEP’s offices to Pops, a soda-and-burger joint he opened beside a futuristic gas station on Route 66.

“He loved navigating back roads,” son Will McClendon said at the funeral. “He was definitely not a Google Maps kind of guy.”

McClendon was also known for driving fast and without a seat belt.

Beneath a bridge for Interstate 44, Midwest Boulevard narrows slightly. Police have said McClendon was speeding as he approached the bridge, well in excess of the 50 mph limit. His SUV crossed the yellow dividing line and directly hit the western bridge support. Dispatchers took the first in a series of emergency calls at 9:12 a.m.

“It looks like a Tahoe and it looks pretty rough…”

“The cab is completely crushed…”

“That vehicle just exploded….”

Oklahoma City authorities have said McClendon likely died instantly from the collision. Authorities said they intend to release a full report on the accident next week.

“As to his state of mind, we know how it happened, but not why it happened,” said Oklahoma City Police Captain Paco Balderrama. “Someone under so much pressure: Maybe he didn’t get enough sleep. Is it possible he dozed off? It is possible he suffered a medical emergency? Why did it happen? We may never know.”

Shale Legend McClendon Indicted Over Bid Rigging


McClendon’s security team at AEP called police at about 10 a.m. to report him missing.

A short while later, Temple, the New Orleans energy executive, checked his bank account online, expecting to see a payment. AEP and McClendon had agreed to buy mineral rights in Oklahoma from Temple’s Sunrise Exploration for an undisclosed amount. The deal was scheduled to close at noon.

Noon came and went. No payment.

Suddenly, Temple recalled, emails flooded in. Before he could read them, he answered a call from a childhood friend.

“Did you see what happened to Aubrey?”

“Yeah,” Temple said. “He got indicted.”

“No, he’s dead.”

Temple said he felt goose bumps, then sadness.

The next day, the money came through. AEP had honored what may have been Aubrey McClendon’s final deal.