McClendon remembered as energy 'visionary' despite controversy

By Jessica Resnick-Ault and Ernest Scheyder

NEW YORK/HOUSTON (Reuters) - Aubrey McClendon, an oil and gas entrepreneur whose outsized ambition and high tolerance for risk propelled him to become a leading figure in the American energy revolution, died in a single-car crash on Wednesday in Oklahoma City. He was 56.

McClendon was considered one of the most influential CEOs of his generation, revered by oilmen but despised by environmentalists for championing the extraction technique known as hydraulic fracturing, or fracking, that ushered in U.S. energy independence.

He was often compared to the titans of American commerce: an Andrew Mellon or John Rockefeller of his time.

But some investors viewed him warily for his reported lavish spending and mingling of personal and corporate investments that eventually led to his ouster in 2013 from Chesapeake Energy Corp (CHK.N), a company he founded in 1989 and turned into the No. 2 U.S. natural gas producer.

His death came one day after the U.S. Department of Justice indicted him for allegedly violating antitrust laws by colluding to rig bids for oil and gas acreage while he was CEO of Chesapeake. He denied the charges.

Police said they were investigating why his 2013 Chevy Tahoe slammed into an overpass.

Tom Price, a retired executive who worked alongside McClendon for decades at Chesapeake, said he was resilient.

“Every day was a day that Aub(rey) was going to make the best of it. He was a guy who could always find a way to make something positive out of something negative,” said Price, who exchanged emails with him Tuesday.

Price said McClendon had bounced back from numerous setbacks.

"I remember I once asked him – 'in the face of everything you’re going through, how can you be such a stalwart?'", Price recalled. "And he said: 'What’s the choice? I can continue to try to build the best company.'”

In addition to founding Chesapeake, he was instrumental in convincing the Seattle SuperSonics basketball team to move in 2008 as the Oklahoma City Thunder. McClendon himself held a nearly 20 percent stake in the team.

Oklahoma's governor and energy companies mourned the loss.

"He played an instrumental role in America’s energy renaissance," Oklahoma-based Devon Energy Corp (DVN.N) said in a statement. "His philanthropic efforts and other contributions have helped countless people."

McClendon is survived by his wife, Katie, a Whirlpool heiress, and their three children, Jack, Callie and Will.

DESTINED TO WORK IN OIL

Born in 1959, McClendon seemed destined to work in oil and gas. He was a great nephew of former Oklahoma Governor Robert Kerr, co-founder of U.S. oil-and-gas pioneer Kerr-McGee Corp.

Despite the appearance of privilege, friends said he worked long hours and weekends, and was fiercely competitive.

After attending Duke University, he returned home to Oklahoma and later became a "landman," an oil field real estate broker that puts together crucial but arcane leasing and royalty contracts between ranchers and crude producers.

At age 29, he co-founded Chesapeake with his young friend Tom Ward, who called McClendon's death "heartbreaking."

Tall and thin with a thick head of white hair, McClendon was a tireless booster who often sported a tie printed with tiny drilling rigs.

His leveraged deals and stirring speeches attracted followers - and a long list of investors from whom he raised billions of dollars.

His unrivalled drive to acquire and develop natural gas reserves across the country mean that by 2012, Chesapeake owned the drilling rights on more than 15 million acres, an area about the size of West Virginia.

Chesapeake called its rapid and expensive accrual of leases a "land grab," making McClendon the main character in the biggest resource-driven land rush the country had experienced since the 1800s Gold Rush.

His bold moves generated plenty of headlines. Forbes magazine went so far as to call McClendon "America's Most Reckless Billionaire" in a 2011 cover story.

CONTROVERSY

McClendon’s final years at Chesapeake were marked by frequent controversy. He helped cause Chesapeake's stock to plummet amid the financial crisis when he sold hundreds of millions of dollars in stock to raise cash for himself.

In April 2012, Reuters reported that a series of previously undisclosed loans to McClendon could once again put him and Chesapeake's shareholders at odds. McClendon had borrowed more than $1.3 billion by pledging his stake in the company's oil and natural gas wells - a controversial perk known as the Founder's Well Participation Plan - as collateral. He used that money, in part, to fund his share of the drilling costs of those wells. Some of the loans came from an investor that also did business with Chesapeake.

That report, as well as the company’s mounting debt load at a time of falling energy prices, helped turn the board of directors against him, and he was stripped of his role as chairman. The next year, he was out as CEO.

After leaving Chesapeake, McClendon quickly set up American Energy Partners to make his comeback, raising billions in new investments to acquire acreage in the United States, Argentina and Australia.

Tuesday's indictment of McClendon followed a nearly four-year federal antitrust probe that began as a result of a Reuters investigation which showed that Chesapeake had discussed with a rival how to suppress land lease prices.

In a statement on Tuesday evening, McClendon vowed to fight.

"The charge that has been filed against me today is wrong and unprecedented," McClendon said.

CHARITY

While McClendon's energy deals made him one of America's richest men and he bought fancy houses and wines, he was also generous and funded athletic, academic and philanthropic ventures around the nation.

Duke University and the University of Oklahoma have received more than $25 million for sports facilities and dormitories.

Using his own cash and revenue from his firms, McClendon helped rebrand Oklahoma City through philanthropy and real estate development. The state capital is now an emerging centre of sports and culture.

As part of his efforts to attract top talent to Chesapeake and its 50-acre red brick campus, McClendon had the company built a 72,000-square-foot fitness centre and a health centre that offered teeth whitening.

(Additional reporting by Brian Grow in Atlanta, Mike Stone in Houston and Joshua Schneyer in New York; Editing by Terry Wade and Lisa Shumaker)