A New Twist For Aubrey McClendon

   (FROM THE WALL STREET JOURNAL 4/15/15) 
   By Erin Ailworth 

Aubrey McClendon's biggest financier broke ranks with him on Tuesday over allegations that he started a new energy venture using trade secrets he took as he was forced out at Chesapeake Energy Corp. in 2013.

In a lawsuit filed in mid-February, Chesapeake accused Mr. McClendon -- its co-founder and former chief executive -- of making off with confidential data and maps of oil and gas prospects. The company said Mr. McClendon's new venture, American Energy Partners LP, used the information to buy drilling rights on acreage Chesapeake had hoped to acquire.

The Energy & Minerals Group, an investment firm headed by John Raymond that has put billions of dollars into American Energy, initially defended Mr. McClendon, calling Chesapeake's suit meritless.

On Tuesday, an affiliate of American Energy controlled by Mr. Raymond said it had agreed to assign approximately 6,000 acres in Ohio to Chesapeake and pay it up to $25 million. In exchange, Chesapeake agreed to drop the affiliate -- American Energy-Utica LLC -- and 20 unnamed investors from the suit, according to a statement from Energy & Minerals and American Energy-Utica.

Mr. McClendon is no longer an officer of American Energy-Utica, the statement said. Mr. Raymond and EMG had no comment.

In response, Mr. McClendon said he has the right to possess the disputed data, and remains a director of American Energy-Utica's parent company and an officer of many other affiliates. He has denied any wrongdoing.

American Energy-Utica "apparently chose to settle with Chesapeake before any discovery was taken, evidently for the business purpose of mitigating further damage that Chesapeake's litigation is having" on its business and financing, Mr. McClendon said in a statement. "This resolution should not be mistaken as reflecting an informed view of the merits of Chesapeake's claims or a concession of any liability by any party to Chesapeake."

The settlement does point to cracks forming in Mr. McClendon's relationship with Energy & Minerals and Mr. Raymond.

It also could be a sign that American Energy Partners is struggling after spending billions of dollars to acquire acreage in Ohio, Oklahoma, Texas and West Virginia, said Jason Wangler, an analyst at Wunderlich Securities Inc.

Since these deals, crude and natural-gas prices have fallen sharply.

"It certainly doesn't bode well that your partner that has billions of dollars behind you is stepping away," Mr. Wangler said.

Mr. McClendon founded American Energy Partners two years ago, shortly after being ousted from Chesapeake by big investors upset with his willingness to spend much more money than the company's operations generated.

He struck a partnership with Energy & Minerals: Mr. McClendon would build up an oil and gas business, and Mr. Raymond would stake him the money and control the purse strings.

Mr. McClendon now seems to be looking for new sources of financing. A firm he controls last week filed for a public offering, seeking to raise about $200 million to make acquisitions. The company, Avondale Acquisition Corp., lists Mr. McClendon as chairman and has the same address as American Energy Partners.

Chesapeake is still suing American Energy, its general partner, McClendon Energy Operating LLC, and two other affiliates. Mr. McClendon isn't named in the suit, but Chesapeake disclosed in a March court filing that it is pursuing arbitration against him, as required by Mr. McClendon's separation agreement with the company.

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