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Thursday, April 19, 2012

WSJ on McClendon/Chesapeake

What more could the media ask for?


Rich guy.  Oil and gas company.  Shale gas.  Huge amounts of debt.  Appearance of something slightly unseemly.  Here is the WSJ on Aubrey:


Firms controlled by Aubrey McClendon, the high-profile founder and chief executive ofChesapeake Energy Corp., CHK -0.44% were in debt to a private equity group for as much as $1.4 billion while Chesapeake was negotiating with the same firm to sell it hundreds of millions of dollars of assets.
According to documents reviewed by The Wall Street Journal and a person familiar with the matter, an entity created by Mr. McClendon received a loan of up to $1 billion from an affiliate of EIG Global Energy Partners last November, on top of an earlier loan of $375 million. The November loan was to Jamestown Resources LLC, which lists Mr. McClendon as president and shares an address with Chesapeake in Oklahoma City, Okla.
Earlier in November, EIG bought $500 million in Chesapeake assets and in December led a group of private firms that bought an additional $750 million, the company announced at the time. Earlier this month, EIG was again part of a private-equity group that purchased a stake in a Chesapeake subsidiary for $1.25 billion.
Mr. McClendon used loans from EIG to pay for his participation in a controversial company program that gives him the right to benefit from every oil and gas well Chesapeake drills, but requires him to contribute to the well costs, according to people familiar with the matter. Chesapeake, the second-largest gas producer in the U.S., has had to raise billions of dollars recently as the price of gas has plunged because there is a glut of the fuel.
The existence of the loans was first reported last month by the Pittsburgh Post-Gazette and then on Wednesday by Reuters.
Link to entire article:

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