Another Big Loan for Chesapeake CEO Aubrey McClendon

• Joe Wertz
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  Joe Wertz was a reporter and managing editor for StateImpact Oklahoma from 2011-2019. He reported on energy and environment issues for national NPR audiences and other national outlets. He previously worked as a managing editor, assistant editor and staff reporter at several major Oklahoma newspapers and studied journalism at the University of Central Oklahoma.

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Chesapeake Energy CEO Aubrey McClendon and Oklahoma City Thunder owner Clay Bennett chat during an Oklahoma City Thunder game.

Chesapeake CEO Aubrey McClendon arranged a $450 million loan from an investment-management firm just weeks before he was stripped of his chairmanship, Reuters reports.

The loan came from EIG Energy Partners, which was simultaneously helping the Oklahoma City natural gas giant secure $1.25 billion in financing.

An unnamed source tells Reuters:

It was secured by McClendon’s personal stakes in wells that have yet to be drilled by Chesapeake – and by his own life-insurance policy.

News broke last month that McClendon had used his well interests — which he received through a controversial CEO perk — to borrow up to $1.1 billion in personal loans. EIG provided most of those loans, Reuters reports.

Neither McClendon, Chesapeake nor EIG would comment to the news service’s Jennifer Ablan.

Reuters recently reported that McClendon was running a $200 million hedge fund that traded the same commodities produced by Chesapeake. The hedge fund operated for years out of Chesapeake’s Oklahoma City headquarters, according to the report.

Analysts have raised questions about conflicts of interest and concerns about EIG financing both Chesapeake and its CEO. The investment-management firm has defended its role.

In an April 23 letter to investors in two of EIG’s investment funds, EIG chief executive officer R. Blair Thomas said it is “simply untrue” that there was any conflict of interest in its loans to McClendon and dealings with Chesapeake, Reuters reports.

“The crux of the story as it relates to EIG seems to be that we got too good a deal for our investors.”