Aubrey McClendon is back in the big leagues with $4.2B in new deals


Mac is back, as former Chesapeake Energy (CHK) CEO Aubrey McClendon's American Energy Partners announces $4.2B in acquisitions across shale formations in Texas, West Virginia and Ohio.

The biggest deal is a ~$2.5B acquisition of ~63K net acres of oil and gas properties in Texas' southern Permian Basin from Enduring Resources.

In two other acquisitions totaling $1.75B, he’s acquiring 27K net acres (with 40M cf/day of natural gas production) in the Utica shale region of Ohio, and he’s taking 48K acres (with 135M cf/day of nat gas production) in the Marcellus shale of West Virginia, both from Shell's (RDS.A, RDS.B) East Resources division and an unnamed private company.

“He’s making bets on the same type of assets he did at Chesapeake," Oppenheimer's Fadel Gheit says. "The guy is consistent.”

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Comments (31)
  • 153972
    , contributor
    Comments (1268) | Send Message
     
    Without knowing the quality of the assets but based upon his track-record, McClendon will either hit a lot of HRs for him and his partners or strike out a lot but he will swing for the fences.
    9 Jun 2014, 01:09 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    When he fails, he fails big time.

     

    Based upon CHK, he overpays and over extends both himself and any company associated with him.
    9 Jun 2014, 01:23 PM Reply Like
  • FoolIggy
    , contributor
    Comments (22) | Send Message
     
    He is predictable but so are the results for the common shareholder!
    9 Jun 2014, 01:35 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    He is like Balmer overpaying for the Clippers, when he buys land. Except that he doesn't have billions upon other billions of dollars to fall back upon, only other people's money.
    9 Jun 2014, 01:46 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    I wish they would stop trying to link what ever A does with CHK.

     

    He clearly was fired and let go for his incompetence at CHK.
    9 Jun 2014, 02:26 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    "He clearly was fired and let go for his incompetence at CHK. "

     

    One doesn't even know where to start with this statement.
    10 Jun 2014, 12:26 PM Reply Like
  • THECHEMIST
    , contributor
    Comments (42) | Send Message
     
    I think I know who the private company is. It's the Kimble company according to our local newspaper here in east central Ohio. They've been in the gas business for any years, mainly in southern Tuscarawas county and Guernsey county. It's family owned and operated. I know some of them personally and the founder (now deceased) was a lot like McClendon.
    9 Jun 2014, 02:32 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    I heard it was HG Energy, according to Upstream. Either way he is paying a very high price for the leaseholds, which is fantastic news for MHR, GST, PDCE, GPOR, and AR. They're all clearly in a great position, especially since it seems McClendon might be starting to force consolidation in the basin.

     

    Long MHR
    9 Jun 2014, 03:24 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    It's HG Energy. They already did a deal with Kimble dba RHDK a while back. HG Energy is a bunch of old managers from East Resources.
    10 Jun 2014, 12:27 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    Thanks Michael! Any idea if its all contiguous in Monroe? Or how the price per acre is allocated between the two deals?
    10 Jun 2014, 03:21 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    The HG deal is (allegedly) $23,333/ac, which if true, holy $h!t. Don't know anything verifiable about the Kimble deal. I know the Kimble people have found new and inventive ways to make enemies of all their old landowners, but I'm sure there will be some forgiveness once Aubrey starts making these people rich.
    10 Jun 2014, 03:32 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    Yea I mean $1.75 bil / by the acreage gets you the $23k, but there's production that should be taken into account too. I'm just trying to get some more data on all the Ohio and WV acrage, but since neither company is public I don't think I'll get much.

     

    Agree though Aubrey seems to have paid quiet a bit deal more than he needed to.
    10 Jun 2014, 04:15 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    There's ~22,000 MCF/d from four wells, so it isn't a big part of the total deal. Other than that there isn't much available to us.
    11 Jun 2014, 08:55 AM Reply Like
  • WPSPIKER
    , contributor
    Comments (1149) | Send Message
     
    Agree with others that A M is great at using shareholders $ to pay up for properties while rewarding himself & his cronies. Not many companies will buy & build giant buildings sports teams etc using shareholders $ and get away with it. Then we DID get the $ back when he old "ART" to the company much higher cost than any of it was worth when he used market to buy up shares when he figured others would see his buying and double down. I'm sure all that margin $ was used figuring to inspire lots more buying driving the share price up (so he could dump it I'm sure was his plan.) Too bad the market timing for him was almost perfect (worst time possible) unless you were short (CHK) which I was not at the time :/

     

    M
    9 Jun 2014, 02:32 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    He's a destroyer of any common share holder value.

     

    His record speaks for itself.

     

    Look at the chart of CHK, it wasn't until they dumped his sorry behind that the company fended off bankruptcy.
    9 Jun 2014, 06:17 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    The company came public in 1993 at an adjusted price of $1.33. Aubrey founded and built the company into the second largest producer of natural gas in the country. Your statement that he did not create shareholder value from CHK's founding until he left the firm is grossly inaccurate.
    9 Jun 2014, 06:53 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    Aubrey acted like the company was all his and that it never went public, often blurring the lines between what was Chesapeake's and what was Mcclendon's.

     

    He should be ashamed and black balled rather than any praise given to him.

     

    He had as part of his gross employment contract almost an entire army of people assigned at Company expense to work on materials not related to his CEO job at CHesapeake.

     

    The guy was more a bum than any contributor, especially how the company almost went under during his reign.
    9 Jun 2014, 07:41 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    How many bums start a company from nothing and turn it into a multibillion dollar leader in the industry? Sure, he paid himself too much, and the firm had governance issues from the get go, but everyone should have known that before buying shares in the $40s, $50s, $60s, and $70s.
    9 Jun 2014, 08:28 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    "He should be ashamed and black balled rather than any praise given to him."

     

    He revolutionized the way this country views natural gas and the way companies aggressively go after assets. He got foreign companies to invest billions in American shale fields. He created thousands of jobs and made untold thousands more millionaires overnight. Let me know when I've gotten to the part where he should be ashamed.
    10 Jun 2014, 12:30 PM Reply Like
  • shaky seller
    , contributor
    Comments (7) | Send Message
     
    If the crash of 08 hadn't happened AM would still be hailed as a genius. His issue lyes in the fact that he made a few bad decisions after the crash that didn't pan out as he planned.
    9 Jun 2014, 09:28 PM Reply Like
  • GamCap LLC
    , contributor
    Comments (504) | Send Message
     
    Taking off the gas hedges in the fall of 2012 sealed his fate. The selective email dump to the reporter at Reuters was an inside job but had to happen in order to save the company from Aubrey(he kept delaying the Miss. Lime deal because of what he considered to be a low-ball bid). Aubrey failed to realize that the foreign sov. energy companies, euro-majors were done overpaying for acerage in this cycle. Greatest wildcatter of his generation, he'll survive.
    9 Jun 2014, 09:58 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    "Aubrey failed to realize that the foreign sov. energy companies, euro-majors were done overpaying for acerage in this cycle."

     

    Except they weren't. His last big deal before his unceremonious exit? Securing huge sums of cash and drilling carries from Total S.A. for the (still speculative at the time) Utica acreage.
    10 Jun 2014, 12:32 PM Reply Like
  • GamCap LLC
    , contributor
    Comments (504) | Send Message
     
    Utica was the last, he couldn't get the bid he wanted for the Miss. Lime acerage and was laughed off Wall Street when he went on the road to pitch the services div. w/a $10B valuation. It was time to go, he suffered from "founders disease"...unable to live within cash flows, sell off marginal land...the landscape changed and he was unable to adapt.
    10 Jun 2014, 11:11 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    He's still a bum and only a fool would trust him given his near annihilation of CHK.
    10 Jun 2014, 12:47 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    I see this is the "facts be damned, I have my opinion and I'll take it to my grave" portion of the discussion.
    10 Jun 2014, 03:33 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    What seals the deal is that the bald headed former homeless guy on CNBC is praising Audrey on his show. Fact a lot of shareholders got burned investing in CHK, fact when Mcclendon personally screwed up and had his entire CHK shares called away on margin at substantial higher prices than many other long time holders of CHK, Mcclendon was granted a ridiculous compensation from CHK to help him out, a compensation that very few shareholders felt was justifiable or even close to being equitable. Just love how he forced the company to buy his map collection and then allow him to retain it just the same.

     

    As a CHK shareholder, I want to vomit every time someone brings up that name and associates it with CHK.
    10 Jun 2014, 07:08 PM Reply Like
  • GamCap LLC
    , contributor
    Comments (504) | Send Message
     
    Minuscule price paid for a map collection which was eventually voided is the least of his misdeeds. Going unheadged in the fall of 2012 cost the company hundreds of millions, playing hardball with the sov's in 2011/2012 for a better Miss. Lime deal...likely cost them hundreds of millions more.
    10 Jun 2014, 11:16 PM Reply Like
  • obicat
    , contributor
    Comments (17) | Send Message
     
    Not mentioned in the column is American Energy's success in Noble Co. Oklahoma.. The company has brought in a number of wells there recently. Some testing over 1000 bpd. That is a good starter for that organization. You can forget what happened in the past, we are living in the now.
    11 Jun 2014, 08:04 AM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    Those who forget the past have a good chance of repeating it.
    11 Jun 2014, 01:59 PM Reply Like
  • Michael Phillips
    , contributor
    Comments (757) | Send Message
     
    Says the guy who's going out of his way to forget select parts of the past that don't jive with his narrative.
    11 Jun 2014, 02:59 PM Reply Like
  • l.zimmermam@coxinet.net
    , contributor
    Comments (4) | Send Message
     
    I love people who are so sure and have never accomplished anything great, but are quick to explain everything minuscule and great...
    13 Jun 2014, 01:45 PM Reply Like
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