He rose from his beginnings as an ambitious landman to CEO of a $13 billion natural gas giant over the past 25 years, driven by the daredevil approach that led to the label of America’s Most Reckless Billionaire.
Now Aubrey McClendon is poised to leave the company he co-founded nearly 25 years ago, leaving many to wonder what comes next for the only man ever to serve as CEO at Chesapeake Energy Corp.
McClendon, 53, is stepping down from his position fronting the company he started in 1989 with former partner Tom Ward, who is now CEO of SandRidge Energy Inc.
McClendon cited “philosophical differences” with Chesapeake’s reconstituted board of directors Tuesday in the news release announcing his impending departure from the Oklahoma City-based company.
The board is wrapping up a review of his personal finances, spurred by questions about his dealings with lenders doing business with Chesapeake, but the company said that had nothing to do with its move to find a new chief executive. The review so far has not found any signs of wrongdoing by McClendon.
McClendon, who will leave Chesapeake on April 1, has not spoken publicly about his plans, but his employment contract bars him from competing with the company for at least six months.
The six-month noncompete period begins when all severance payments have been made, which is scheduled for Dec. 31, 2016, according to a person familiar with the matter.
McClendon easily could busy himself during that time with his commercial real estate and philanthropic ventures.
Morningstar analyst Mark Hanson said McClendon’s departure from Chesapeake was no surprise given the turmoil at the company for much of the past year.
“McClendon was stripped of his chairman title after a boardroom takeover last spring, and given his increasingly tenuous grasp on the levers of power of the firm he controlled since 1989, we can’t say we blame him for wanting to hit the reset button,” Hanson wrote this week in a research note for clients.
Another industry analyst predicted McClendon will remain in the oil and natural gas business after leaving Chesapeake, but he may find it harder to attract investors because of his reputation as a gambler.
“I’ll have to be very fair and brutally honest. I am not sure many people would want to invest because ... his track record is a big gambler,” Oppenheimer analyst Fadel Gheit said. “He makes big calls.
“He can win big, but he can also lose big. Very few investors want to do that.”
An October 2011 article in Forbes magazine labeled McClendon as America’s Most Reckless Billionaire. The article described him as the most admired and feared man in the oil patch but also the most reckless, “with an off-the-charts risk tolerance.”
Gheit praised McClendon for what he was able to accomplish at Chesapeake.
“You have to give the guy credit,” he said. “He created an incredible, phenomenal company, grabbed more headlines than any other company of its size.”
One person who hopes McClendon doesn’t leave behind his industry roots is Rich Kolodziej, president of natural gas vehicle advocacy group NGV-America.
Kolodziej said McClendon has been a huge player in growing the market for natural gas as a transportation fuel.
He said Chesapeake stands to gain from increased use of natural gas, “but this is the right thing to do for the United States.”
“His contributions really can’t be overstated,” he said.
State Chamber of Oklahoma CEO Fred Morgan lauded Chesapeake as a “pure Oklahoma success story.”
“Aubrey built an extraordinary company often on the forefront of technological advances. He deserves credit as a visionary and inspirational leader,” Morgan said. “His company and industry have contributed greatly to our state’s economy, employing thousands of Oklahomans and will continue to do so.”
Gheit said he is sure McClendon will do something interesting after he leaves Chesapeake because of his unorthodox and controversial approach.
He said he expects McClendon, whose great uncle was legendary Oklahoma oilman Robert S. Kerr, to stay in the oil and gas business.
“He’s been in the business all his life,” the New York-based analyst said. “He really doesn’t know any other business.”
McClendon is a good salesman, with lots of contacts in the industry, who should have no trouble raising money for his future endeavors, Gheit said.
“Aubrey was a very colorful guy,” he said. “I’m sure he will land on his feet doing something else.”