A mixed legacy for Aubrey McClendon
Filed by KOSU News in Feature.
April 1, 2013
Aubrey McClendon. To some, he’s the guy who revitalized Oklahoma City through Chesapeake Energy…to others, he’s the one leaving the company to figure it all out after it took on billions in debt. There’s agreement on one thing – he had an outsize impact. How many CEOs in the world, never mind Oklahoma City, would host a Rolling Stone correspondent one week and field questions on CNBC another? But as McClendon steps down today from the company he co-founded in 1989, his legacy remains unfilled…
The Chesapeake campus wouldn’t look out of place in Cambridge Massachusetts, Dartmouth New Hampshire, or any of the other homes of Ivy League schools. But behind the mix of traditional brick buildings and modern architecture is a company with an uncertain future…
“The big problem that oil producers is, particularly in the 1920’s, is they have too much oil. They’ve glutted the market and the price has dropped. So, that seems to be happening with natural gas.”
Brian Frehner is an associate professor of history at Oklahoma State, focused on the energy industry. Frehner says under McClendon, Chesapeake got bold, and that may have hurt them.
“There’s nothing wrong with collecting production, if you recognize there are markets for it. But this is the riddle of capitalism, right?”
“Well I think a lot of Oklahoma City’s ascension mirrored Chesapeake’s.”
Oklahoma City Mayor Mick Cornett takes the rosy view of McClendon’s role at Chesapeake.
“They kind of came of age and became a public company in the early 1990′s. And Oklahoma City kind of progressed at the same time Chesapeake started putting together a very impressive energy company.”
The company has been through a lot – national attention when questionable deals were revealed by media reports, a serious slide in stock price, and a near cleaning out of the Board of Directors. But Cornett doesn’t detect any shift in attitude in Oklahoma City.
“But I don’t think anything has happened in the last twelve months has disturbed Aubrey’s legacy among the minds of the people of Oklahoma.”
Go down to Texas, where Diana David Hinton is. She’s a professor at UT Permian Basin in Odessa.
“It’s the attitude, I think. It’s a willingness to take risks. And willingness to diversify geographically.”
That kept on coming up. McClendon was more aggressive than competitors, especially in the Barnett Shale, the Texas natural gas field where discoveries popped up month after month. All of it came crashing down.
“From high prices of between 13 and 14 dollars an MCF in the autumn of 2008, gas prices began to slide, and they kept sliding. So that by the time you get to the middle of 2009, here Chesapeake has spent an enormous amount of money buying up leases.”
Stop for a second though. We’re still talking about Chesapeake the company under Aubrey McClendon. Those in Oklahoma City want to talk about Chesapeake the corporate champion too.
“Aubrey communicates to his employees, he sends out emails, he sends out letters, he has meeting with his top leadership just to make a presentation, and to make sure they know the importance, so that they can send it down from their organization, from their different department heads”
As Executive Vice President at United Way of Central Oklahoma, Nina Daylor watched McClendon push his employees towards volunteering there. Just as Mayor Cornett described the growth of Oklahoma City falling in lock step with Chesapeake’s ascension, same with the United Way. But when I ask about McClendon the CEO:
“I just think that I’m probably not going to answer this the way you want me to. Aubrey, he’s passionate about his employees and about his company.”
In a statement, Chesapeake said McClendon created one of the most valuable and innovative companies in the energy industry, calling him a pioneer and leader.
“In terms of whether people will remember McClendon the way they remember John D. Rockefeller, or the way they remember Dad Joiner, or the way they’ll probably remember George Mitchell, that’s harder to answer. If he’s like Boone Pickens, McClendon may be down but he isn’t necessarily out.”
Thirty years from now, it may be impossible to think there was confusion about Aubrey McClendon’s legacy. But for now, we’re stuck somewhere between the shrewd businessman who helped build the brick and glass Chesapeake campus, and the one who expanded his company’s reach too far, forcing it to sell nondescript office buildings at a loss.