By Daniel Gilbert
Wildcatter Aubrey McClendon has been all but absent from the
public eye since his ouster as chief executive of Chesapeake Energy
Corp. last year. Now he is easing back into the spotlight.
Mr. McClendon, whose flair made him a fixture at the energy
industry's marquee events, is working feverishly to build a new
energy empire, raising $10 billion in the last nine months for his
American Energy Partners LP. On Wednesday, he joined the head of
the Environmental Protection Agency and the governor of Delaware at
a Goldman Sachs energy conference in Manhattan.
The executive's appearance at the event marked a re-emergence
after a quiet period. Just over a year ago, Mr. McClendon was shown
the door at Chesapeake, the company he co-founded and built into
the nation's second-biggest natural-gas producer, behind Exxon
Mobil Corp. Regarded by many as a visionary early to grasp the
potential of American shale, Mr. McClendon eventually lost favor
with Chesapeake's largest shareholders because of his aggressive
spending, appetite for risk and mingling his personal finances with
the company's drilling.
Mr. McClendon has kicked off his second act with characteristic
speed and billion-dollar purchases, setting up shop less than a
mile from Chesapeake's headquarters in Oklahoma City. American
Energy Partners on Monday said it had snapped up oil and gas
holdings from West Virginia to West Texas for $4.25 billion: about
$1 billion shy of Chesapeake's capital-spending budget for this
year.
"I represent an industry which today is the largest producer of
natural gas in the world," a low-key Mr. McClendon said at
Wednesday's conference. Wearing a bright-pink necktie, his long
white hair tucked behind his ears, he held forth on a favorite
subject: the economic and environmental benefits of natural
gas.
The U.S. drilling boom has catapulted the country ahead of
Russia on the natural-gas leaderboard, thanks in part to the
prowess of companies like Chesapeake at wringing the fuel from
shale-rock formations through hydraulic fracturing and other
techniques.
Mr. McClendon acknowledged that the industry has made mistakes,
including poor construction that led to leaky wells. But he argued
against the more muscular regulation that is under consideration as
the EPA and some states study the environmental impacts of
fracking.
"We have such powerful internal motivation to get things right
that we can fix things on the fly pretty quickly without, frankly,
heavy-handed approaches to our problems," he said.
American Energy Partners is bulking up in some of the areas that
Chesapeake pioneered. But this time around, Mr. McClendon is
running five closely held affiliates, each focused on drilling in
distinct locations.
The approach offers an appeal similar to fantasy baseball,
allowing investors to bet on their favorite oil and gas fields,
from Ohio's rust belt to the red-hot Permian Basin in Texas. For
now, the various units are owned by a few big investors each, with
investment firm Energy & Minerals Group in Houston putting up
the most cash.
Mr. McClendon hasn't made clear whether he intends to take
American Energy or any of its affiliates public. The unit focused
in Ohio, American Energy--Utica LLC, in April sold debt that would
convert into shares with a public offering. The deal implied a
value of $5 billion for the venture.
For now, American Energy's financing arrangements aren't public.
Some analysts question whether the terms are as onerous as deals
Chesapeake struck under Mr. McClendon, which raised cash but
saddled the company with a huge debt load and expensive
requirements to drill.
The new company's frenzied pace of spending on oil and gas
leases has prompted some analysts to question whether the company
is moving too quickly. "Are you optimizing what you hold? That's
the name of the game right now," said Mark Hanson, a Morningstar
Inc. analyst.
The company and Mr. McClendon declined to comment for this
article.
Mr. McClendon hasn't lost his appetite for complexity. In
addition to American Energy Partners, he is managing operations for
a separate energy outfit with a similar name: American Energy
Capital Partners LP. The company is backed by real-estate investors
who have hired Mr. McClendon to acquire interests in oil and gas
properties. Mr. McClendon receives a percentage of such deals,
including purchases from companies he runs.
The U.S. Securities and Exchange Commission in March sought
expanded disclosures from American Energy Capital Partners about
potential conflicts of interest. The regulator also demanded that
the firm delete a passage from Mr. McClendon's biography that
referred to his "long history as a successful manager."
"The biography should be limited to factual information, not
evaluative statements," the SEC wrote in March.
The company made the change.
Write to Daniel Gilbert at daniel.gilbert@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires