Aubrey McClendon

Aubrey Kerr McClendon
Born	(1959-07-14) 14 July 1959 Oklahoma City, Oklahoma, U.S.
Died	2 March 2016(2016-03-02) (aged 56)
Occupation(s)	Entrepreneur, energy executive
Known for	Co-founder, CEO and chairman of Chesapeake Energy; founder of American Energy Partners; ownership stake in Oklahoma City Thunder

Aubrey Kerr McClendon (July 14, 1959 – March 2, 2016) was a prominent American entrepreneur specializing in natural gas exploration. He co-founded Chesapeake Energy (currently known as Expand Energy), where he also held the positions of CEO and chairman. After departing Chesapeake due to a possible conflict of interest, McClendon established and led American Energy Partners, LP. He was an outspoken proponent of natural gas as a cleaner fuel alternative and played a key role in advancing hydraulic fracturing technology.

McClendon held a 19% stake in Professional Basketball Club, the ownership group behind the Oklahoma City Thunder, and was instrumental in moving the Seattle SuperSonics franchise to Oklahoma City in 2008.

On March 1, 2016, a federal grand jury charged McClendon with conspiracy to manipulate bids on oil and natural gas leases in northwest Oklahoma. He tragically died the following day in a single-car accident.

Early life and education

McClendon was born in Oklahoma City to Carole Kerr and Joe Connor McClendon. He was the great-nephew of Robert S. Kerr, a former governor and U.S. senator from Oklahoma who co-founded Kerr-McGee.

Raised in the Belle Isle neighborhood, he attended Belle Isle Elementary School and graduated from Heritage Hall School in 1977, serving as senior class president and co-valedictorian. During his teenage years, he launched a lawn mowing enterprise.

He earned a Bachelor of Arts degree in history from Duke University in 1981, with a minor in accounting. His academic focus was on the Reconstruction Era following the Civil War. While at Duke, McClendon joined the Sigma Alpha Epsilon fraternity and met his future wife, Kathleen Upton Byrns.

Starting his professional journey as an accountant, McClendon transitioned into the energy sector after learning about a profitable Anadarko Basin well stake sale. He initially worked as a landman for Jaytex Oil and Gas—founded by his uncle Aubrey M. Kerr Jr.—before leaving in November 1982 to pursue his own oil ventures.

Chesapeake Energy

In 1983, at age 23, McClendon teamed up with Tom L. Ward after competing for land bids to launch their first oil and natural gas project. Following the oil market downturn in the late 1980s, McClendon briefly relocated to New York but soon returned to Oklahoma City. In 1989, when he was 29 years old, he and Ward co-founded Chesapeake Energy. McClendon assumed the roles of chairman and CEO while Ward served as president and CFO. The company commenced drilling its initial two wells in Garvin County, Oklahoma in May 1989.

McClendon concentrated on exploiting unconventional reservoirs such as fractured carbonate rock and shale, adopting innovative methods like directional drilling and hydraulic fracturing early on—strategies that propelled rapid expansion. His pioneering efforts earned him acclaim as an industry "visionary leader."

Chesapeake went public through an initial public offering in 1993, with its stock appreciating by 274% from 1994 to 1997. In 2005, Forbes recognized McClendon among top executives for his leadership performance.

During the financial crisis of 2008, Chesapeake's share price dropped by three-quarters, compelling McClendon to liquidate 94% of his holdings—31.5 million shares (approximately 6% ownership)—to settle a margin loan. The following year, Chesapeake extended a five-year retention agreement including a $75 million cash bonus.

In 2011, Forbes dubbed McClendon "America's most reckless billionaire" due to his aggressive risk-taking and leveraged share sales during the 2008 downturn. That same year, he earned a spot on Forbes' "20-20 Club," honoring CEOs who delivered over 20% annualized returns over two decades.

Under McClendon's direction, Chesapeake's natural gas output soared from five million to approximately 2.5 billion cubic feet daily between 2009 and 2013, contributing significantly to the reduction of U.S. natural gas prices.

Potential conflicts of interest during McClendon's tenure as Chesapeake Energy CEO

• McClendon appointed several close associates to Chesapeake's board of directors, where they became the highest-compensated directors within the petroleum industry. Subsequently, the board approved a compensation package for McClendon totaling $112 million, which included $75 million over five years for acquiring interests in Chesapeake wells, a $20 million stock award, and $12 million to purchase his personal map collection. The board also permitted McClendon to engage in commodity trading and operate a hedge fund, despite the inherent conflicts this posed.
• The company developed a retail center near its headquarters under McClendon's direction, leasing space to restaurants partly owned by him, which Chesapeake patronized extensively for catering services.
• When liquidity was needed, McClendon persuaded the board to buy his rare maps for $12 million; he later agreed to repurchase them with added interest and legal expenses to resolve a shareholder lawsuit.
• A division named "AKM Operations" was dedicated to McClendon's personal projects, including home repairs following hail damage. Allegations arose that Chesapeake employees performed approximately $3 million worth of personal work in 2010, providing engineering and accounting assistance. McClendon also utilized company aircraft for private travel but reimbursed all costs except $250,000; his contract allowed personal use of company jets citing safety and efficiency considerations.
• Chesapeake paid $3 million annually for naming rights to the Chesapeake Energy Arena, home venue of the Oklahoma City Thunder, and committed to purchasing $3 million in tickets each year; McClendon held a 19% ownership stake in the team.
• Reflecting his personal interests, McClendon employed a company historian and hired the World's Strongest Man, both earning over $100,000 yearly to enhance corporate culture and wellness initiatives.
• Through the Founders Well Participation Program, McClendon acquired a 2.5% interest in every well Chesapeake drilled, borrowing up to $1.1 billion secured by these stakes from banks that also lent to Chesapeake. This arrangement raised conflicts of interest by potentially placing personal financial benefit above company priorities. After public criticism, Chesapeake discontinued the program. The U.S. Securities and Exchange Commission investigated McClendon's borrowing activities but did not pursue enforcement actions.

In June 2012, shareholders voted against two board members and approved expanded proxy access. McClendon stepped down as chairman but continued as CEO. An internal board investigation in February 2013 found no evidence of misconduct or increased costs linked to McClendon’s actions. He resigned from his CEO position on April 1, 2013.

Following his departure, McClendon retained options to invest in wells through July 2014; these interests were managed by three entities—two were transferred to banks amid potential foreclosure proceedings, while one was assigned to Clay Bennett.

In February 2015, Chesapeake filed suit against McClendon alleging theft of company data during his exit and misuse of trade secrets at American Energy Partners, which he had established. McClendon asserted rights under separation agreements. By April 2015, American Energy–Utica reached a settlement with Chesapeake involving land transfers and a $25 million payment. The litigation involving McClendon's estate concluded in February 2017 with an agreement on $3.25 million in legal fees.

American Energy Partners, LP

In April 2013, McClendon established American Energy Partners, LP, a hydrocarbon exploration firm headquartered in Oklahoma City. Throughout 2013 and 2014, he expanded the workforce by recruiting more than 600 employees, predominantly from Chesapeake Energy, while securing approximately $15 billion in combined equity and debt financing. The company was dissolved following McClendon's passing.

Federal indictment for violating antitrust laws

On March 1, 2016, a federal grand jury charged McClendon with antitrust violations, accusing him of conspiring to depress prices paid for oil and natural gas leases through manipulated bidding processes. The indictment detailed a scheme allegedly coordinated by McClendon involving two oil and gas firms in northwestern Oklahoma from December 2007 to March 2012, where participants prearranged bid winners and divided interests to circumvent competitive bidding. One implicated entity was SandRidge Energy. This prosecution represented the initial result of a federal probe into price fixing and bid rigging within the oil and natural gas industry. In a related matter, Chesapeake Energy resolved similar allegations in 2015 by paying $25 million to affected landowners.

Following the charges, McClendon refuted all accusations, highlighting his three-and-a-half decades of dedication to job creation and supporting Oklahoma’s economy while contributing to national energy supply. He asserted his innocence but tragically died in a single-vehicle accident the following day, March 2, 2016.

Other business ventures and investments

McClendon held investments in various food service enterprises and dining establishments, including Jamba Juice. His portfolio included several restaurants in Oklahoma City such as Irma's Burger Shack, Deep Fork Grill, The Coach House, Republic Gastro Pub, Metro Wine Bistro & Bar, Provision Kitchen, and Pops. Notably, he launched Pops—a burger and soda eatery—on historic Route 66 in Arcadia, Oklahoma in 2007.

Between 2004 and 2008, McClendon co-directed Heritage Management Company LLC alongside Tom Ward; the firm operated as a $200 million hedge fund.

In 2008, he made a $35 million investment in ProCure Treatment Centers Inc., which managed three proton therapy facilities for cancer treatment.

Land ownership

From 2004 through 2006, McClendon purchased nearly of primarily undeveloped dune land along Lake Michigan’s eastern shoreline and the Kalamazoo River for $39.5 million after initially acquiring a half-interest in 2004. In 2006, the Saugatuck Township Board unanimously approved rezoning that complicated development efforts amid local environmental concerns. Despite opposition, McClendon continued acquiring land and initiated discussions in 2007 aimed at relaxing zoning restrictions. He sold to the Western Michigan Land Conservancy in 2009. After filing a federal lawsuit in 2010 seeking to overturn the zoning changes, a settlement reached in 2012 nullified the 2006 rezoning ordinance.

Between 2008 and 2013, McClendon was among the top private landowners in the United States with holdings exceeding .

Oklahoma City Thunder

As an original partner of the Professional Basketball Club owning the NBA’s Oklahoma City Thunder, McClendon played a key role in relocating the Seattle SuperSonics franchise to Oklahoma City in 2008. At that time, he held a 20% ownership interest. In 2007, McClendon publicly disclosed that the ownership group did not intend to keep the team in Seattle—a statement that resulted in a $250,000 fine from the NBA for contradicting official league communications. In April 2014, he expanded his stake by acquiring additional shares from G. Jeffrey Records Jr.

Philanthropy and community engagement

McClendon contributed generously and held board positions with various organizations in Oklahoma City, such as the Boathouse District and Boathouse Foundation, The McClendon Family Boys and Girls Club of OKC, the Oklahoma City Chamber of Commerce, Oklahoma State Fair, and Oklahoma City Public Schools. His patronage extended to cultural institutions including the Lyric Theatre, Oklahoma City Ballet, Oklahoma City Museum of Art, Arts Council of Oklahoma City, Oklahoma Heritage Foundation, and the Oklahoma City Philharmonic.

Beginning in 2011, McClendon annually hosted a gathering for local Boy Scouts of America at his Arcadia Farm. He made substantial donations amounting to roughly $15 million to Duke University and $12.5 million to the University of Oklahoma.

Recognition and accolades

In 2007, McClendon was inducted into the Oklahoma Heritage Foundation's Oklahoma Hall of Fame. Two years later, in 2009, he was named a leading finalist for CEO of the Year at the Platts Global Energy Awards.

The Chief Roughneck Award was bestowed upon him in 2010 by U.S. Steel Tubular Products, a division of U.S. Steel, honoring his lifelong contributions to the petroleum sector.

In 2011, he earned the Ernst & Young National Entrepreneur of the Year award for Energy, Cleantech, and Natural Resources. The Heritage Hall School Alumni Association acknowledged him with their Distinguished Alumni Award in 2013.

Advocacy and lobbying for natural gas

During his tenure as CEO in 2004, McClendon donated $450,000 to Tom Corbett’s Pennsylvania attorney general campaign. Corbett’s later support for Chesapeake’s hydraulic fracturing initiatives helped keep Pennsylvania as the only state without a severance tax on drilling companies despite education budget reductions.

McClendon established the American Clean Skies Foundation in 2008, a nonprofit advocating for natural gas advantages, financed by both Chesapeake and himself. The foundation attracted criticism for lobbying efforts perceived as aligning with corporate interests.

As a founding member of America's Natural Gas Alliance (ANGA), he championed expanded domestic natural gas usage. He backed campaigns opposing coal-fired power plants and contributed to the Sierra Club's "Beyond Coal" initiative, which had successfully prevented over 150 coal plant projects by 2013.

On 60 Minutes in 2010, McClendon highlighted natural gas as an environmentally friendly fuel source and job creator. He defended hydraulic fracturing as a strategy to diminish OPEC’s influence, generate American employment opportunities, and reduce energy expenses.

Personal background and interests

Residing in Oklahoma City with his wife Kathleen Upton Byrns, McClendon was father to three grown children: Jack, Callie, and Will. Kathleen is related to Sports Illustrated supermodel Kate Upton and Louis Upton, founder of Whirlpool Corporation.

He curated an extensive wine collection exceeding 100,000 bottles; much was sold off for liquidity and capital gains while the remainder was auctioned after his passing. Additionally, he collected antique maps of Oklahoma along with vintage motorboats.

An adherent of the Episcopal Church, McClendon occasionally incorporated scripture into workplace communications and employed chaplains during his leadership at Chesapeake.

He was the principal investor in Magnises, a credit card startup associated with convicted fraudster Billy McFarland, co-creator of the notorious Fyre Festival fraud.

Known for his optimistic outlook and willingness to embrace risk, McClendon's mindset deeply influenced his business strategies and leadership approach.

Death

At 9:12 a.m. on March 2, 2016, McClendon was killed instantly when his 2013 Chevrolet Tahoe SUV, traveling at approximately 88 mph, collided with a concrete overpass on the Turner Turnpike in Oklahoma City. This single-vehicle crash happened just one day following his indictment by a federal grand jury for alleged antitrust violations spanning 2007 to 2012 during his leadership as CEO of Chesapeake Energy. No court hearings were scheduled for McClendon on that date.

Identification was confirmed through dental records on March 4, 2016, due to extensive burn injuries. The medical examiner determined the cause of death to be multiple blunt force trauma. Within 48 hours of the indictment, the Justice Department filed a motion to dismiss the charges. On June 8, 2016, the incident was officially classified as an accident; toxicology tests revealed no presence of alcohol but detected Doxylamine, an over-the-counter antihistamine and sedative, in McClendon's system. He was not restrained by a seat belt at the time, consistent with his past habits.

Oklahoma City Police reported that McClendon veered left of center into a grassy median before striking the embankment, despite having several chances to correct his trajectory which were not utilized. Investigators found no indication of suicide, though they could not exclude the possibility of a medical episode contributing to the crash.