Last thoughts: My Perspective of McClendon as Royalty Owner & Entrepreneur

By Keith Mauck

I remember the 2008 conference call quite well. My wife and her three siblings have 320 acres of Louisiana farm land that they hold dear, and they were curious what this Haynesville Shale might possibly mean for their farm, their Louisiana kin and the region in general — and all we needed was for Aubrey McClendon to tell us the good news. He didn’t fail them.

In stark contrast to the good news delivered that day came the news on March 2nd that Mr. McClendon was killed in a car accident outside of Oklahoma City. Speed likely was a factor in his death. Police say it appears that his 2013 Chevy Tahoe drove “straight into a wall” and burst into flames. McClendon likely died instantly. The crash occurred less than 24 hours after a federal grand jury indicted McClendon for allegedly rigging oil and natural gas leases. He denied the antitrust charges, saying “Anyone who knows me, my business record and the industry in which I have worked for 35 years, knows that I could not be guilty.” He added, “All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans.”

I met McClendon several years ago during a Marcellus Shale event in Pittsburgh. I found him to be charismatic and hard-driving, an uber-entrepreneur who saw the potential of the advanced technologies transforming the energy industry. Coming from the mineral owner community, I wasn’t sure how I’d be received, but upon introducing myself, he exclaimed enthusiastically, “You’re that dude!” As I walked away from the friendly exchange, my joy for the recognition gave way to a slight uneasiness that CEO McClendon knew about “a dude” who had a website. Then, that gave way to wonderment that he had the capability and desire to see the industry from bottom to top.

At age 56, McClendon was a titan in the oil and gas industry. In 1989, he and his friend Tom Ward started Chesapeake Energy in Oklahoma City with $50,000, and turned it into a multi-billion dollar powerhouse. Brash and aggressive, he was a visionary who recognized the promise of hydraulic fracturing and moved quickly to buy up mineral rights leases in shale formations.

 Under his leadership as CEO, Chesapeake became one of the largest independent natural gas producers in the country. But McClendon also took risks. At one point he invested some of his personal wealth in Chesapeake wells and used them as collateral for $1.1 billion in loans for drilling.

The move was questionable, but McClendon’s impact on U.S. energy supplies was nothing short of remarkable. Chesapeake and a small number of similar companies turned America’s energy deficit into an abundance of oil and natural gas. Today the United States is the largest oil and gas producer on the planet.

McClendon, and other wildcatters like him, are responsible for America’s energy bounty, along with all of the mineral owners who signed leases to allow drilling. Millions of royalty owners, as they are called, are benefitting from the “shale gale” by receiving payments for the oil and gas being produced on their private lands. They have told me — the publisher of and — the stipends have helped them pay their bills, pay off college loans, and grow their families.

With that said, in the community where I come from, the mineral owner community, opinions of McClendon remain mixed at best—many feel taken advantage of by business practices that began under his leadership at Chesapeake. As the price of natural gas and oil dropped, royalty check deductions became burdensome despite the fact that many landowners had contract clauses prohibiting the practice. Royalty owners of all sizes have filed suit against Chesapeake alleging this practice violates their contracts. To this day, Chesapeake continues to fight these allegations and related lawsuits. My hope remains that Chesapeake corrects its practices and makes decisions that will make royalty owners financially whole. The verdict is still out on whether this will happen.

Professionally speaking, I was saddened by McClendon’s growing absence from the public energy debate. He was a tremendous communicator and salesman for shale and it’s potential — the heir apparent to T. Boone Pickens. But, as the controversies mounted and the clouds darkened, he moved away from the spotlight to take on less visible roles.

It’s still unclear just how history will remember Aubrey McClendon but one thing is clear. He was a savvy entrepreneur who helped America transition from energy dependence toward energy independence. For that, we are grateful. My prayers and condolences go out to his family and friends.

Keith Mauck, J.D., is Publisher of and Co-Founder of

This article was originally published in the Daily Caller.

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Keith, to a point I will agree with you but due to Greed, buying up too much Shale oil reserves, in fact played a negative role in what has happened in the Oil and Gas business. The extreme volumes that were being produce during the first few years after drilling and fracturing the formation, led to the price collapse of the Gas prices as did the oil prices. There is a lot of gas and oil in the UN fractured formations but these still need to be drilled and fractured before production. As a small royalty owner in the Haynesville formation area, it has hurt so many people in the long run. Using calculations based on the first month's, year production to borrow money that was used in other area's had really hurt the State of Louisiana, the State gave them the TAX relief to expand and help the State. Did that happen, no it did not, The State lost needed TAX money that was supposed to come down the road, did not and will not happen any time soon.  I will ask through this forum, how many royalty owners had TAX deductions taken out of your first 1 or 2 years of royalty checks? I know  Chesapeake took taxes out of my first years royalty checks. I sent mail to them and finally got them to refund some of the money back to me. It was very hard following their accounting of this.  Yes, I was sorry to hear about the "accident" that killed him but I would have preferred to see him  here to address in person what he did.

I trust you saw this portion of the piece?

With that said, in the community where I come from, the mineral owner community, opinions of McClendon remain mixed at best—many feel taken advantage of by business practices that began under his leadership at Chesapeake. As the price of natural gas and oil dropped, royalty check deductions became burdensome despite the fact that many landowners had contract clauses prohibiting the practice. Royalty owners of all sizes have filed suit against Chesapeake alleging this practice violates their contracts. To this day, Chesapeake continues to fight these allegations and related lawsuits. My hope remains that Chesapeake corrects its practices and makes decisions that will make royalty owners financially whole. The verdict is still out on whether this will happen.

Thanks for posting Larry.

Was there an autopsy performed on Mr. McClendon's body? Was there any determination as to whether his accident was related to a physical anomoli?

I have to agree with Larry G. Smith P.E. concerning the tremendous pain inflicted on the State of Louisiana.  As a Louisianian, this is being felt far and wide within the state budget. I wish the residents of the State of Louisiana understood this. Personally, I'm sick of hearing blame being unduly placed in the wrong areas.

As for other aspects of this man's dealings, I have no personal knowledge, however, it is my understanding he did a great many good things. If his accident was intentional, I am deeply saddened he took such a permanent option to what would inevitably be a finite problem.

I have long been called "Pollyanna" for my views on optimism at every turn. I can shoulder that. My opinion and $5 will buy you a cup of coffee.

My prayers for peace to those Mr. McClendon left behind.

Whatever happened to McClendon (accident or suicide) could not have happened to a more deserving person!!  I don't wish this to happen to anyone, with exception to him or any other person at CHK who devised (and continue) the scheme of stealing $$$$ from its partners.........its royalty owners!!!  Land owners who lease their land to oil companies become PARTNERS with that oil company.  From day one, and it continues today, CHK has frauded and schemed to screw its partners, its royalty owners, out of billions of dollars and its not getting better, just getting worse.  McClendon is the one who started this culture at CHK, and now it has spread to all the other oil companies, which has in turn changed the oil business forever.  The Publisher of this site has tried to defend CHK for them the benefit of the doubt over and over again.  But believe me, McClendon and his cronies at CHK were and are the biggest white collar criminals I have ever seen!! And it's not only its royalty owners, CHK has been screwing our state out of hundreds of millions of dollars for years.  And with the current problems with the state's budget, I have no clue why the state's Legal Dept. has not launched an investigation into CHK's practice of paying royalties!!  So, in my opinion, the world is in a better place without Mr. McClendon in it!!  Unfortunately, he didn't suffer like his royalty owners have been for years!!

Years ago, Chesapeake made big mistakes because of GREED. They offered tremendous bonuses for large parcels of land and bundled them. They did not even check to see who owned the mineral rights. Our property was sold but mineral rights were retained. When we were offered a tremendous bonus by another company we were very happy. One hour before closing the deal and picking up our check we found out that Chesapeake had already paid a large bonus to a large corporation who owned the land but not mineral rights. Our deal collapsed and we were left having to spend a great deal of money and 3 years in court trying to get Chesapeake and the corporation that owned the land to correct the problem they created by not doing due diligence. Pay us for our minerals was the right thing to do. But they would not. Through the courts we were able to recover only a small portion of what was legally ours. Chesapeake was unwilling to admit their mistake. Never in the years that have past have they returned a phone call when the small royalties we were able to pull out were calculated wrong. We lost millions of dollars not to mention the emotional distress and loss of any trust in these energy companies, ESPECIALLY CHESAPEAKE. We hoped they would do the right thing but they would not. Well, this man was Chesapeake. I say he's dead now.AND .....KARMA's A BITCH and you better believe KARMA WAS AT WORK HERE! YOU GET BACK WHAT YOU PUT OUT THERE NO MATTER IF YOU HAVE DONE SOME GOOD THINGS. I'M sure he and his family benefitted greatly from his good works. AND THE REST OF US PAID FOR HIS BAD WORKS. KARMA, YOU NEED TO TAKE CARE OF THE REST OF THE GREEDY CORPORATIONS AND ENERGY COMPANIES OUT THERE. I can wait. No problemo!

Reply by Gil Lawton 1 second ago


When we watch a Wimbledon Tennis championship game, we (the audience) get to see more than we are likely to grasp.  The subtleties of "good" play, versus "bad" play, at that level of expertise, are not even agreed on totally by other world class players.

When we watch a chess match between the world's greatest chess masters, we see more than we are likely to grasp.  And, again, the subtleties of whether this player or that player should have played differently than he/she did at a particular juncture, might take a super computer to play out the logical repercussions of the play that was made, versus some alternative play, might challenge a super computer. Why?  Because, within even three plays afterward, numerous other plays were possible on part of that player's opponent.  If this, then that... but if this, then that.  And no chess player is always certain what strategy the opponent may be setting up that may not become clear until several payments from the current one.

When it comes to things CEOs of mega-corporations do, many of them have both obvious and immediate positive repercussions and obvious and immediate negative repercussions.  Also, much wheeling and dealing that goes on beyond the view of law makers, regulators, shareholders, depositors (in the realm of banking at least), the public, the news media... and even their corporation's board of directors... can take place via personal relationships with other CEOs, relationships with legislators, relationships with regulators who only NOMINALLY are out to regulate them.

To say that a CEO is brilliant, or to say he/she has charisma, to say that he/she has a warm and winning and "honest" nature... nobody would ever become a CEO WITHOUT these qualities.

The DIFFERENCE between tennis champions and chess champions, on the one hand, and corporate CEOs, on the other, is that tennis contests and chess matches, don't have the potential to do gigantic harm to an industry, to trusting victimized customers, to millions of trusting stockholders...

It's unfortunate how, under the guise of seeking to make the costs of electrical power go DOWN, the ENRON insiders persuaded congress and the SEC and others to go along with allowing them to use government power to take away numerous small electrical utilities plants from communities who had paid for them, and had them built, and were enjoying very, very low rates of energy cost.  The blatant lie that companies run by "government" never run efficiently or at low cost was repeated thousands of time.  ENRON just wanted to PRIVATIZE these little utilities plants, so that the citizens could get the kinds of lower rates that only PRIVATIZED personal owner (corporate person) could run efficiently and fairly and well.  But no matter how well advertised that lie, the RESULT was that -- after those small utility companies had been forcibly TAKEN WITHOUT COMPENSATION from those communities, and GIVEN AT NO COST to ENRON, not only did the rates of home and business use of electricity in those communities GO UP, they went up as much as six to seven times what they had been before.  Millions of former owners (owners in common, through their communities who were the owners in common of those small electricity producers, were BANKRUPTED by what they became under 'privatized ownership, and even ENRON ITSELF, AFTER creaming all the benefit of all those FREELY RECEIVED assets, became worthless, and ITSELF collapsed.  Where did the money go?  Well, read some of the books that spell it out in detail.

Did government regulators fail to prevent this "takeover" of billions in community-bought, community- owned assets from being squandered, and from driving their prior owners to poverty with inflated rates? No.  And how did THAT come about?  Well, in a nutshell, corporate CEOs can (and do) funnel millions of dollars into campaign donations, lobbying and rewarding elected legislators who vote on bills co-written in words that take the teeth out of the regulator's bite.  And, as if that were not enough to render regulation a joke, regulators are appointed by elected officials.  The regulating agency's BUDGET can be cut if it gets too carried away with applying the teeth that remain in the bite, insofar as protecting the public, the nation's treasury, etc.

Was it "over-regulation" that collapsed Bernie Madoff's monstrous Ponzi scheme, wiping out the entire savings accounts of millions of "trusting" investors?  No, it was the FAILURE to effectively regulate that did it.  A single phone call, at one point, to verify the balance in one international account, would have exposed the entire fraudulent shell, and was not made.

What about the regulation that was supposed to have been done of Fannie Mae -- whereby, Jim Johnson, CEO during the enormous ballooning of false and fraudulent (to SEC documents) "book value" of Fannie Mae was being reported,

CEO'S of mega corporations, including mega banks, are in bed with elected officials and the regulators they appoint (and prevent from doing what their nominal just is on paper.).

But, hey, does that CEOs cannot be warm, personable, charismatic, friendly, courteous, believable, charitable, motivational friends, leaders family members??? 

You don't GET TO BE a CEO of an enormous, financially powerful, politically protected mega-corporation if you don't know that more flies can be caught with honey than with vinegar.

More often than not, when a highly respected, highly beloved, highly trusted former CEO gets exposed after much hard gets done, but public is the LAST TO KNOW... but the devil is in the details of the aftermath -- not in the time of that CEOs glory days.

Oh, and are any of them INNOCENT of any wrongdoing?

Well, that's what they all say, when the ship hits the sand.  So, let us wait and see.  Those details, I expect, will be coming out for quite a while to come...

I pray for his soul.  I know many people who are in a tight spot because of the drop in their royalty checks.  I hope none of them equate money and wealth or the loss of them with the value of their lives.

I have had wealth and lost it.  But I carry a deep faith in God and have joy in my heart and value life and friends.

I wish this poor man would have had more for himself and saved his family this heartbreak.

Well said, Krkyoldhag! 

Wow.  Bitter much, folks??

My favorite SMH comment - "I don't wish this to happen to anyone, with exception to him..."

I'm not sure how Mr. McClendon personally stole your minerals, or cost you leases, or somehow robbed the state's coffers except through means of existing laws on the books or otherwise passed through state legislatures.  But based upon your postings here, I would have to conclude that none have you have died in a fiery car crash, leaving your families without spouses, parents, siblings, or children.

You're still breathing.  Try to keep perspective people. 

I am all for keeping perspective. We have a candidate for the presidency, who as US Senator had a warm and abiding relationship with Mr McClendon's past and most recent company. I am certain he felt great loss with Mr McClendon's "untimely" death and would be appalled at the lack of compassion relating to Aubrey's "accident." This long time political operative and great legal mind will undoubtedly continue to garner votes, contributions, and fans for his conservative values. However, his past actions speak volumes as to what is considered justice in this "exceptional" legal system of ours. Let us ask if Aubrey were not whacked at his hand or by powerful others what kind of sentence would he had served? How about W's "Kenny Boy" Lay? What if Mr Lay had not had an "untimely" myocardial infarction? Surely he would not have had such a sentence as the following? Talk about perspective?


Possible alternate theory: Both men were under incredible amounts of pressure and over the age of 50.  Can we consider stress-induced massive MI until the shadow people in the black helicopters and SUVs claim responsibility?

That is not even important. I am talking perspective, as you requested we value. Regardless how the vermin met their "untimely" end, let us consider the perspective our "Solons" and "strict originalists" have on justice. I wonder what kind of perspective a US Senator (bought and paid for) would possibly have? Wonder how the ones currently employed as lobbyists for the noble industry are grieving for "Just call me Aubrey, sir." Wonder if they would care to rectify a 16 year sentence for a peon? Bottom line, I am keeping things in perspective and I have no compassion for McClendon. I do not know why but the old "knee capping" of the Provisional IRA comes to mind. That would be a better consequence but I shall settle for what fate provided. Too bad, so sad.


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