HOUSTON — The Justice department announced Tuesday night the it had actually charged Aubrey K. McClendon, an Oklahoma wildcatter that turbocharged the shale revolution by buying increase gas fields throughout the unified States, v conspiring come suppress prices paid because that oil and also natural gas leases.

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The indictment claims that Mr. McClendon, who led Chesapeake Energy prior to he was compelled to step down 3 years ago, orchestrated a conspiracy in which 2 oil and also gas providers colluded no to bid versus each various other for the acquisition of number of leases in northwestern Oklahoma from so late 2007 to early on 2012.

According to the justice Department, the companies made decision who would win the leases, v the to win bidder allotting an interest in the leases come the other company.


“McClendon instructed his subordinates come execute the conspiratorial agreement, which included, amongst other things, withdrawing bids for certain leases and also agreeing ~ above the allocation of understanding in the leases between the conspiring companies,” the department claimed in a statement.



Indictment of Shale Baron in Rigging that Leases

The righteousness Dept. Fee Aubrey McClendon, the ex-C.E.O. The Chesapeake Energy, through conspiring come suppress prices paid because that oil and also natural gas leases.


“His action put agency profits ahead of the interests of leaseholders entitled to compete bids for oil and also gas civil liberties on their land,” said William J. Baer, assistant attorney basic for the antitrust division. “Executives that abuse their positions as leaders of significant corporations come organize criminal task must be organized accountable for your actions.”

The indictment to be filed ~ above Tuesday in United says District Court because that the Western district of Oklahoma. The department claimed this to be the very first case resulting from a continuing federal antitrust investigation right into price fixing, bid rigging and also other anticompetitive conduct in the oil and also natural gas industry.


It did not point out anyone rather or any kind of other company, no one did it speak how countless leases to be involved.

Mr. McClendon released a statement so late Tuesday denying all charges, arguing that for 35 year he has worked to create jobs and help Oklahoma’s economic situation while giving plentiful power for the entire country.

“The fee that has actually been filed against me this particular day is wrong and also unprecedented,” Mr. McClendon said. “I have actually been singled out as the only human being in the oil and also gas sector in end 110 years since the Sherman Act became law to have actually been accused of this crime in relation to joint bidding on leasehold.”


Gordon Pennoyer, a spokesman for Chesapeake, stated the company “has been proactively cooperating for part time” v the antitrust investigation. The added, “Chesapeake walk not intend to confront criminal beginning or fines relating come this matter.”


Mr. McClendon was nothing if no audacious as Chesapeake’s chief executive. He came to be a billionaire as the company he helped uncovered aggressively outbid rivals for floor leases and drilled highly fertile wells in practically every significant shale gas ar in the country.

Under Mr. McClendon’s leadership, Chesapeake and a grasp of various other companies reinvented the confront of power in the united States, turning the nation from an power importer to an exporter and pioneering hydraulic fracturing in recently explored shale fields with ample global financing.


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In the end, they created a glut of organic gas that sent Chesapeake and also several other companies come the brink of bankruptcy together gas prices collapsed.

Chesapeake’s stock price, i m sorry is now under $3 a share, has actually been sinking for many of the last 5 years, especially due to the fact that it was revealed the Mr. McClendon had taken a an individual stake in Chesapeake wells and then used those investments together collateral for up to $1.1 billion in loan used greatly to pay because that his re-superstructure of the cost of drilling those wells.


His understanding ranged far and wide, together he obtained trophy assets favor the Oklahoma City Thunder basketball team, understanding in a French winery and also a $12 million neck map collection.



Oil Prices: What to do of the Volatility

Over the last two and a fifty percent years, the oil industry experienced its deepest downturn due to the fact that at least the 1990s.


He was once fined $250,000 through the national Basketball Association because that bragging that he and his partner did not buy the Seattle SuperSonics to keep the team in Seattle — a statement that was in ~ odds v the N.B.A. Commissioner’s intentions. The Sonics moved to Oklahoma City for the 2008-9 season, and also they ended up being the Thunder. Lock play in Chesapeake power Arena.

Mr. McClendon donated numerous dollars to the Sierra society from 2007 to 2010, money the the environmental group neglected come disclose also as it advocated increased usage of organic gas to change coal burning.

The Sierra Club reduced its ties come the natural gas industry as environmentalists raised comes to over pollution caused by fracking and the handle of fracking fluids.

The indictment adheres to a four-year federal examination that started after Reuters revealed in 2012 that Chesapeake had discussed with Encana, a rival Canadian power giant, just how to suppress soil lease prices in Michigan.

Last year, Chesapeake resolved charges the antitrust, fraud and racketeering violate by agreeing to salary $25 million as compensation come landowners through leases.

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Mr. McClendon is now the chairman the American energy Partners, a private agency that seeks investments in shale fields globally. It freshly signed an covenant with YPF, the Argentine nationwide oil company, to aid develop a shale ar in Patagonia.