Chesapeake Energy Corp. founder Aubrey McClendon, who was forced to retire as CEO on April 1, has leased office space in Oklahoma City and lured two executives to what appears to be the start of at least one new company.
According to an Oklahoma City official, McClendon secured a $200,000 building permit to lease the sixth floor of the Harvey Parkway Building, which is near Chesapeake’s headquarters. Chesapeake had owned the building until January. The floor being leased has an estimated 16,000 square feet.
Arcadia Capital LLC and McClendon Energy Operating LLC have been registered for McClendon by former Chesapeake director Shannon Self, state records indicate. Arcadia was registered Jan. 17. American Energy Partners LP also was registered by Self and it is to be housed with the other two companies at the Harvey building, but it was unclear whether it was a McClendon entity.
If McClendon were to begin working in the U.S. energy industry again, his efforts may be complicated by a noncompete agreement with Chesapeake.
McClendon’s contract bars him from using for one year confidential information that he acquired from Chesapeake. He also is prohibited from acquiring, or from helping someone else acquire, oil and natural gas interests immediately adjacent to Chesapeake holdings while he continues to receive severance payments.
With drilling rights on close to 15 million net acres across most of the U.S. onshore basins, finding a spot to lease land not adjacent to Chesapeake may prove difficult.
McClendon likely would need to secure outside funding for any venture. He had pledged most of his Chesapeake shares in 2008, then estimated at $2.3 billion, as collateral for loans to buy more shares. When the price fell that year, the value of his collateral tumbled below the level required and he was forced to sell off most of his stock. Most of his personal fortune, including a 19% stake in the Oklahoma City Thunder National Basketball Association team, is pledged as collateral for loans.
Chesapeake Senior Vice President (SVP) Tom Price, who heads corporate development and government relations, as well as SVP Henry Hood, who runs the land operations, are leaving May 3. They plan to work with McClendon, according to Chesapeake officials.
Acting Chesapeake CEO Steve Dixon praised the departing executives.
“Tom and Henry have been valued members of our leadership team and have played important roles in the historic success of our company,” Dixon said. “Tom has been a leader in promoting our company and our industry in our host communities, trade groups and in Washington, DC, while under Henry’s direction, Chesapeake secured the No. 1 or No. 2 positions in 10 of the most prolific natural gas and liquids fields in America.”
Price, 61, who joined Chesapeake in 1992, reportedly has an office ready at the Harvey Parkway building.
McClendon had “kindly offered to provide me with an office, and I have accepted,” Price told The Oklahoman. “Aubrey and I have worked really well together on trying to do things that benefit Oklahoma City. I think we can continue to do that and hopefully enhance the prosperity of the state as well.”
Asked what he expected to do, Price said he wasn’t sure.
“That’s not defined at this point. We are just trying to see what there is to do, what it is that the city lacks, where we can do something together that will be value-added for all. Sometimes it takes time to step away and really figure that out.”
Hood, 52, joined Chesapeake in 1995. He served as general counsel from 2006 until last September.
“Chesapeake is a special, great place to work with wonderful, incredibly dedicated, hardworking people,” Hood told The Oklahoman. “I will miss working side-by-side with them every day, but I do look forward to pursuing new opportunities.”
Morningstar Inc.’s Mark Hanson said he wasn’t surprised by the news.
“I didn’t think this would be McClendon’s last act,” said Hanson. “It looks like he’s trying to reassemble his team.”
The land and government relations areas are places that Chesapeake’s board has targeted for cost cutting, he noted. “Those positions probably were on the verge of extinction. Given the company’s new focus on developing assets rather than buying leases, it sounds like they may be dismantling a bit there.”
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