McClendon-Founded Ascent Resources Looks to Launch $3.5B IPO

The Wall Street Journal is reporting rumors that the privately-held Ascent Resources, which targets the Utica Shale in Ohio, is shopping for bankers to help it with an initial public offering (IPO). Ascent reportedly is aiming for a stock market valuation of $3.5 billion. Ascent was formerly known as American Energy Partners (AEP), founded by Aubrey McClendon after he was unceremoniously dumped as CEO of Chesapeake Energy–the company he co-founded. AEP set up a number of subsidiary companies to target different shale plays. One of the largest was aimed squarely at the Ohio Utica (American Energy Partners–Utica LLC). That company later left the AEP fold, under pressure from investors, and became an independent company, renaming itself as Ascent Resources. Ascent, just like founder Aubrey, went on a money-raising binge after departing the AEP fold. In March 2016 Ascent floated 2.2 billion common units (think shares of stock) to raise $500 million (see Ascent Resources Sells More of Company to Pay Down Debt). Ascent planned to use that money to pay off existing notes, or IOUs. In August 2016, Ascent flirted with bankruptcy but pulled its bacon out of the fire by restructuring its debt (see Ascent Resources Talking to Creditors to Restructure $1.2B Debt). In November of last year, Ascent sold another 3.5 billion common units, hoping to raise $787 million to pay down outstanding debt (see Ascent Resources Sells Another 3.5 Billion Units for $787 Million). In March of this year, Ascent floated yet more IOUs, hoping to raise $1.5 billion (see Ascent Resources Continues Aubrey’s Borrowing Ways: $1.5B in IOUs). The company now plans to convert itself into a public stockholding company, in order to raise a staggering $3.5 billion…
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Duke Univ Shamed, Withdraws $10M Claim Against McClendon Estate

blowbackDuke University, as MDN has chronicled, has a long history of pumping out faux research that bashes fracking and fossil fuels, “research” that’s bought-and-paid-for by the Park Foundation, one of Duke’s major contributors (see What’s Missing in Latest Duke “Radioactive” Study? Real Science; Yet Another Duke University Study Smears the Marcellus Industry; Duke Hit Piece on Shale Water Usage from Same Park-Sponsored Prof; Duke U Study: Property Values Drop When Marcellus Drilling Begins; and Latest Case of Duke U Bought & Paid “Research” by Park Foundation). Higher education is a cesspool of such sponsored junk science. However, another Duke financial contributor (and alum) was Aubrey McClendon, who had personally contributed tens of millions of dollars over the years to the school. Before his death, Aubrey had committed to contributing nearly $10 million more to the school. As you know, Aubrey died in a fiery crash in March (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). So what did Duke U do? They filed a claim against the McClendon estate for the money Aubrey had promised before his death. Talk about gall. Once their sleazy move was exposed to the light of day, the university withdrew its claim with a feeble excuse and apology…
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Fitch Ratings: American Energy-Marcellus May Default on Loan

Fitch RatingsRatings agency giant Fitch Ratings maintains and periodically issues a “Loans of Concern” list. It is a list of companies Fitch considers to have “material, near-term default risks.” That is, the companies will likely default on repaying loans, which may lead to nastier things, like a bankruptcy. As of last week when Fitch issued the list, there were 53 companies on it. Of those 53 companies, some 49% of them (26 in all) are energy companies. You must be a Fitch subscriber in order to see the full report/list of companies. Alas, we are not. However, Argus got a look and lists a few of the names in the list. One of those names stood out for us: American Energy-Marcellus, which is one of the American Energy subsidiary companies founded by former Chesapeake Energy CEO Aubrey McClendon. American Energy’s Marcellus/Utica division later changed its name to Ascent Resources in June 2015 (see Big McClendon News: Sells 35K Utica Acres, Creates New Company). In August 2015 Moody’s, another ratings agency, downgraded Ascent’s credit profile (see Moody’s Downgrades Ascent Resources Credit Profile to Basement). Ascent has been working hard to stay afloat (see Ascent Resources Offers to Trade IOUs Due 2021 with IOUs Due 2021 and Ascent Resources Sells More of Company to Pay Down Debt). We are assuming Fitch’s name use of American Energy-Marcellus is the same company as Ascent Resources–but we don’t know for sure…
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Police Find No Evidence of Suicide in Aubrey McClendon’s Death

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Aubrey McClendon

We spotted an interesting article from Oklahoma about Aubrey McClendon’s death (God rest his soul). Everybody, including MDN, read the tea leaves and thought McClendon had committed suicide by vehicle (see McClendon’s Biggest Backer Backed Away the Day Before Car Cras). However, there has always been some doubt (see Aubrey McClendon’s Death Still a Mystery – Suicide or Distracted Driving?). A new report from the police investigating Aubrey’s death have pronounced they can’t find “any evidence” that it was actually suicide…
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McClendon’s American Energy Partners Shutting Down This Summer

AEP logoPerhaps it’s a good thing when one’s children leave the nest. As we’ve been reporting, even prior to Aubrey McClendon’s untimely death, the subsidiary companies he founded as part of his new venture, American Energy Partners, were running away from Aubrey as fast as they could (see McClendon’s New Empire Continues to Separate and Leave and McClendon’s Child Companies Continue to Run Away from AEP Parent). Aubrey died in a fiery car crash on March 2 that appears to have been (sorry to say) a suicide (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). Aubrey was leveraged to the hilt at the time (see WSJ: Aubrey McClendon was in Debt Up to His Eyeballs). So it’s no surprise to us to learn that his company, American Energy Partners, laid off 100 employees on Wednesday and announced it will permanently close its doors in the next three months. The children (i.e. subsidiary companies) will go on…
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WV Court Declares “Implied Right” to Pool Oil & Gas Leases

court-gavel.jpgA circuit court judge recently ruled on a case in West Virginia with implications for unitization or pooling. No, NOT forced pooling–or forcing landowners who haven’t signed a lease into a drilling unit, forcing drilling under their land. That’s not what this case was about. This case was about landowners with an already-signed lease for vertical wells now being used to allow that land to be pooled with other land and a horizontal well allowed to be drilled under it. The landowners, who wanted a new lease for horizontal drilling (and more money, which is reasonable in our opinion) said because the lease was silent on the matter of pooling or unitizing, it should not be allowed. The judge disagreed and found in favor of the energy company, in this case American Energy…
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McClendon’s Child Companies Continue to Run Away from AEP Parent

In June 2015 MDN observed that Aubrey McClendon’s American Energy Partners (AEP) subsidiary companies were leaving as fast as they could (see McClendon’s New Empire Continues to Separate and Leave). Among the first to go was the Utica/Marcellus division of AEP, American Energy Appalachia Holdings, renaming itself Ascent Resources (see Big McClendon News: Sells 35K Utica Acres, Creates New Company). Others have also left the fold. The latest to get out of Dodge is AEP’s Permian Basin company (located in Texas). Like the others, they want nothing to do with the AEP name. The new name is Permian Resources…
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McClendon’s Biggest Backer Backed Away the Day Before Car Crash

Details continue to drib and drab out related following the death of Aubrey McClendon on March 2nd (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). We previously told you that one of Aubrey’s biggest backers, Energy & Minerals Group (EMG), was about to hang Aubrey out to dry (see More Info Comes to Light About McClendon’s Last Days/Last Moments). We now have more details about EMG’s abandonment of McClendon the day before his death. We also have a comment from an analyst who says McClendon’s company, American Energy Partners, will likely declare bankruptcy within a year. They just aren’t producing enough cash to pay all of the debts…
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Aubrey McClendon’s Death Still a Mystery – Suicide or Distracted Driving?

AubreyMcClendon.jpgMore details are coming from an investigation into the one-vehicle crash that killed Aubrey McClendon on March 2nd (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). From the beginning, investigators have implied McClendon’s death was a suicide. They didn’t say it outright–but they certainly indicated it with their language. He was going “at a high rate of speed” and “didn’t hit his breaks” before driving into the concrete wall holding up a bridge. We later found out his friends wouldn’t give him any more money, which seems to support the suicide theory (see WSJ: Aubrey McClendon was in Debt Up to His Eyeballs). The black box in Aubrey’s SUV has been examined (did you know your vehicle has a black box?), and investigators say Aubrey was driving at speeds up to 89 miles per hour, and when he crashed into the bridge support, he hit it going 78 mph. Although he tapped on the brakes a few times in the moments before hitting, Aubrey never pressed down on the brakes hard. However, friends say Aubrey was known to drive fast and multi-task, using his cell phone. So we’re still left wondering–was it suicide? Or distracted driving?…
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WSJ: Aubrey McClendon was in Debt Up to His Eyeballs

We continue to learn more about what was going on behind the scenes with Aubrey McClendon and his new company and financial “empire.” It appears Aubrey’s new empire was built on a house of cards, and it was all starting to fall down. The Wall Street Journal ran an extensive article yesterday that outlines the intricate web of Aubrey’s financial dealings. Below is a small portion of that article…
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More Info Comes to Light About McClendon’s Last Days/Last Moments

We’ve spotted several new (to us) bits of information about Aubrey McClendon that may have bearing on his state of mind prior to the fiery crash that took his life on Wednesday. We now know who the likely second party was in the Dept. of Justice’s (DOJ) indictment of Aubrey on a single count of conspiracy. As we’ve pointed out from the beginning of the DOJ’s indictment, by definition you can’t have a conspiracy with just one person. You need at least two people. The problem was/is, the DOJ hasn’t indicted anyone else–which made this a witch hunt, not justice. You don’t get to say just one person is guilty in a conspiracy. We also have information about the state of Aubrey’s new business venture–American Energy Partners. It seems he was losing control of all the subsidiary companies spun off from AEP, and that his biggest backer, Energy & Minerals Group, was about to hang Aubrey out to dry. It may have seemed like with the indictment and his new venture slipping away and with old friends turning on him, that Aubrey’s world was closing in. First up, let’s begin our coverage with eyewitness accounts of the crash…
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Stirring Tributes Pour in After Aubrey McClendon’s Untimely Death

Right after news of Aubrey McClendon’s death, a number of people offered up their reaction, comments and condolences. We brought you some of the early/initial reaction yesterday (see Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash). Since then, many more have poured in, from people like his former business partner and co-founder of Chesapeake Energy, Tom Ward; the president of Duke University (Aubrey’s alma mater), Richard Brodhead; CEO of Continental Resources, Harold Hamm (a fellow giant in the fracking industry); and Jim Cramer, celebrity investor and host of CNBC’s Mad Money. Among the outpouring of glowing comments was one from corporate raider Carl Icahn–the man who fired McClendon from Chesapeake. When we read Ichan’s words, we puked…
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Stunned: Former Chesapeake CEO Aubrey McClendon Dies in Car Crash

AubreyMcClendon.jpgWe are still stunned at the news–news you’ve likely already heard elsewhere. Yesterday morning Aubrey McClendon, 56 years old and the sole person in his SUV, was traveling along a 2-lane road in/near Oklahoma City when he crashed into a bridge foundation/embankment while moving at “a high rate of speed.” He was killed in the crash. Yesterday afternoon MDN editor Jim Willis received a call from reporter friend Bob Downing from the Akron (OH) Beacon Journal to ask for a response to the news. “What news?” Jim asked. And Bob told him. The accident is still being investigated, but the guy in charge of investigating it, without prejudging what he will find, has already pronounced it pretty cut and dried. We find it hard (nearly impossible) to believe, but most people, including the investigator, seem to believe it was a suicide, perhaps because the day before Aubrey was indicted by the U.S. Dept. of Justice (see Aubrey McClendon Indicted by DOJ for Conspiracy in Bid Rigging). Aubrey was traveling at 50+ mph and was not wearing a seat belt when his SUV hit the bridge embankment–without applying the brakes. He could have fallen asleep. He could have been distracted. Or it may have been intentional. The investigator said Aubrey had plenty of time to correct course and not hit the embankment. Below we have the details as we know them, along with reaction from a number of people and organizations. We join others in saying our thoughts and prayers go out to Aubrey’s wife and three adult children…
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Aubrey McClendon Indicted by DOJ for Conspiracy in Bid Rigging

AubreyMcClendon.jpgcon·spir·a·cy – noun – a secret plan by a group to do something unlawful or harmful. Yesterday the U.S. Department of Justice indicted a single person–Aubrey K. McClendon, on a single count of conspiracy. He is alleged to have conspired to rig bids for oil and gas leases in Oklahoma, his home state, from 2007 to 2012. Do you see the obvious contradiction here? In order to have a conspiracy, you need more than one person. Yet the FBI and the DOJ have brought charges against only one person. It takes at least two people to have a conspiracy–so why has no one else been indicted? McClendon issued a statement (below) blasting the DOJ, pointing out he is the only person in 110 years to be prosecuted under the Sherman Act for bid rigging. What really hurts is that Chesapeake Energy, the company Aubrey co-founded, has been attempting to sell him out in return for not being prosecuted by the DOJ. Anyone else smell a rat in this whole thing?…
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McClendon Signs Deal with Argentina to Drill in “Dead Cow” Shale

One has to marvel at how Aubrey McClendon has done, and keeps doing it. The “it” being raising money for drilling holes in the ground. McClendon, as we and others have chronicled over the past several years, was unceremoniously dumped as CEO of the company he co-founded, Chesapeake Energy, by corporate raiders Carl Ichan and Mason Hawkins. Chesapeake is still in the crapper, financially, so we see how that’s turned out. McClendon went on to found American Energy Parnters (AEP), raising billions of dollars of investments for various drilling programs, notably in the Utica Shale. McClendon is about to pull another $500 million rabbit out of his hat. McClendon has just inked a deal with Argentina’s YPF SA to drill 20 wells in Argentina’s Vaca Muerta (translated “dead cow”) shale formation, located in the Patagonian Province of Neuquén. Argentina is the biggest shale gas producer outside of the U.S. In order to seal the deal, McClendon has to raise $500M in the next three months. If anyone can do it, Aubrey can!…
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Top 10 Marcellus/Utica Drillers by Number of Permits May-Aug 2015

MDN recently published Volume 2 of our 2015 Marcellus and Utica Shale Databook–a research book that chronicles who’s drilling and where in the Marcellus/Utica region. We thought it would be interesting to bring you some of the results from this latest volume. Below is a list of the top 10 Marcellus/Utica drillers based on the number of permits they were issued from May through August 2015. The numbers of permits shown are for discrete, individual wells. Each well drilled typically involves multiple permits–one to begin drilling, another to frack, etc. We toss out all of the multiples and show the numbers for discrete, individual wells. The top driller ranked by number of permits received may just surprise you–it did us. In addition to the list, we’ve included stock charts for each company to show you just how badly the industry has been hit over the past year. Stock prices for most of the top 10 have plunged…
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