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Fracking Pioneer Dies In Car Wreck, A Day After Federal Indictment

Aubrey McClendon, the co-founder of Chesapeake Energy, helped lead a boom in U.S. energy production that reshaped the global oil market.

Posted on March 2, 2016, at 3:54 p.m. ET

Sean Gardner / Reuters

Aubrey McClendon, a major figure in the oil and gas industry, died in a car accident Wednesday, one day after the Justice Department charged him with conspiring to rig the price of oil and natural gas leases in his home state of Oklahoma.

McClendon, 56, "crashed into an embankment while driving at a 'high rate of speed' in Oklahoma City on Wednesday morning," Capt. Paco Balderrama of the Oklahoma City Police Department said at a news conference.

The billionaire former CEO of Chesapeake Energy Corp. and part-owner of the NBA's Oklahoma City Thunder "pretty much drove straight into the wall,” Balderrama said. “There was plenty of opportunity for him to correct and get back on the roadway and that didn’t occur.” McClendon was due to appear in court today.

His death comes the day after a federal grand jury indicted him on charges of orchestrating "a conspiracy between two large oil and gas companies to not bid against each other for the purchase of certain oil and natural gas leases in northwest Oklahoma" between December 2007 and March 2012.

The Justice Department alleged that a winner would be determined ahead of time, and then that winner would allocate an interest in the leases to the other party, effectively holding down prices paid to leaseholders. The indictment didn't name anyone else who was allegedly involved, and arose from an "ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the oil and natural gas industry," it said.

McClendon issued a statement late Tuesday, vehemently denying the allegations.

“The charge that has been filed against me today is wrong and unprecedented," he said yesterday. "I have been singled out as the only person in the oil and gas industry in over 110 years since the Sherman Act became law to have been accused of this crime in relation to joint bidding on leasehold."

On Wednesday, prior to news of the crash, one of the biggest investors in McClendon's new oil and gas ventures told investors it would cut ties with him, Reuters reported.

McClendon placed a central role in the U.S. oil and gas boom of the last two decades, which transformed American energy production and reshaped the global oil market. As CEO of Chesapeake Energy, which he co-founded in 1989, McClendon led an aggressive search for oil and natural gas deposits locked within shale rock formations, becoming a pioneer of the fracking industry.

McClendon built a vast empire of drilling leases, and by 2011 the company controlled as much land as West Virginia and employed 12,000 people. By the end of 2015, Chesapeake was the country’s second-largest natural gas producer and a major player in oil production, with estimated reserves equivalent to about 1.5 billion barrels of oil.

But the boom in U.S. energy production also contributed to plunging prices for oil and gas, which hit Chesapeake hard. The company is now struggling to deal with $11.6 billion in debt racked up during its expansion spree, and hired restructuring advisers late last year, the Wall Street Journal reported.

McClendon left Chesapeake in early 2013 after shareholders voted in a board that committed to reining in the company’s aggressive and often risky spending.

By then, the CEO had become a big-spending fixture in Oklahoma City, where the company is based. Along with his stake in the Thunder, he was a big donor to the University of Oklahoma. He was also politically active, donating $250,000 to Swift Boat Veterans For Truth, the group whose controversial TV ads help sink John Kerry’s 2004 presidential campaign.

Tuesday’s indictment was not the first time authorities took aim at Chesapeake’s business practices under McClendon. In 2015, the company settled antitrust, fraud and racketeering charges brought against it by the Michigan attorney general, agreeing to set up a $25 million compensation fund.

"All my life I have worked to create jobs in Oklahoma, grow its economy, and to provide abundant and affordable energy to all Americans," McClendon said yesterday in response to the federal indictment. "I am proud of my track record in this industry, and I will fight to prove my innocence and to clear my name.

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