American Energy Partners LP, created by Aubrey McClendon in 2013 after he left Chesapeake Energy Corp., will be closed in the next few months, the company said.
Exploration and midstream companies spun off by the Oklahoma City-based onshore independent -- Ascent Resources LLC, White Star Energy LLC, Permian Resources LLC, Traverse Midstream LLC and Heritage Resources Management LLC -- would not be impacted.
McClendon, who co-founded Chesapeake in 1989, died in a car crash in early March in Oklahoma City, one day after he was indicted on one count of conspiring to rig the price of oil and gas leases (see Shale Daily, March 2a; March 2b).
"After considerable thought and discussion with Aubrey McClendon's family, and our employees, we have made a collective decision to wind down the operations of American Energy Partners LP (AELP)," management said Wednesday. "Aubrey's vision was to incubate independent, stand-alone companies from this platform and we have achieved the successful launch of five independent oil and gas companies (consolidated from seven startups), which employ hundreds of Oklahomans. These companies...each have a bright future and will not be affected at all by this decision."
Reports that the parent company would close its doors began to surface this week after AELP laid off about half of its 100-member workforce. McClendon was forced out at Chesapeake in early 2013 and soon launched the privately held partnership (see Daily GPI, April 17, 2013).
The partnership, designed like Chesapeake to focus on exploration opportunities in the U.S. onshore, raised more than $15 billion and created 10 businesses that employed 800 people. Most of the employees initially hired then joined the subsidiaries that were created by private equity backers, which included The Energy and Minerals Group.
Ascent Resources LLC, which became independent last year, is the largest of the spun-off companies and is focused on Appalachian exploration (see Shale Daily, June 10, 2015; Jan. 5, 2015). White Star, formed as a Woodford Shale-focused subsidiary, in April paid $200 million to buy Devon Energy Corp. properties in northern Oklahoma (see Shale Daily, April 20). Permian Resources, designed to take advantage of opportunities in West Texas, officially was launched in March after McClendon's death (see Shale Daily, March 23). Traverse initially was launched with stakes in Energy Transfer Partners LP's Rover Pipeline and Ohio River System gas pipeline projects in Appalachia, and it was spun off last summer (see Shale Daily, July 23, 2015). No information was available regarding Heritage Resources.
"We are proud to have had the opportunity to work with Aubrey," AELP management said. "Through his strategic vision and tireless efforts, along with the most dedicated employees in the industry, the numerous businesses we founded together have shown tremendous resiliency in the face of the historically difficult industry environment. Aubrey's legacy will be carried forward by each of these businesses as they continue to grow, by the numerous landmarks all over our city in which he had a hand in developing and by the many philanthropic organizations to which Aubrey gave generously. We owe a debt of gratitude to each of our hard-working employees and most importantly to our founder, friend and mentor, Aubrey K. McClendon."
McClendon's estate entered probate after his will was filed in April.