A name you most likely know if you have spent any time in the oil and gas industry is Aubrey McClendon. Why have you heard of this man? Here are a few reasons:
- Former CEO and founder of Chesapeake Energy (CHK)
- Helped usher the Discovery the Haynesville Shale by Chesapeake Energy in 2008 and the Utica shale in 2011
- Founder of American Energy Partners LP in April 2013, less than a month after resigning at CHK
Today, we will focus on his latest venture.
American Energy Partners
American Energy Partners LP is headquartered in Oklahoma City at the Harvey Parkway office building – just a hop, skip and a jump away from Chesapeake headquarters. McClendon started American Energy Partners in April 2013 and has been actively raising capital and building an inventory. As of February 2014, McClendon has raised $4.1 billion (Forbes)
According to the Wall Street Journal, a subsidiary of the company called American Energy Utica LLC reached a valuation of $5 Billion dollars as of February of this year. Although McClendon’s company has filed for permits in both Oklahoma and Ohio, this valuation is for the Ohio business.
Drillinginfo’s website permit search of both Ohio and Oklahoma shows us where McClendon is looking for his golden egg.
Since February 2014, American Energy-Woodford LLC has filed 23 permits in Payne County and 2 permits in Lincoln County Oklahoma. According to the permitting data, McClendon intends to work in three intervals, the Woodford, Arbuckle, and Mississippian. In the map, several permits overlap spatially, but their target formations are different. I have labeled each permit with its target formation.
American Energy Utica LLC has filed 14 permits in Guernsey county and 26 permits in Harrison County. The subsidiary is targeting the Point Pleasant and Trenton formations. These counties may ring a bell. Big Utica player, Gulfport Energy, has assets in both of these counties. Gulfport lowered their 2014 production outlook for the Utica in their 1Q14 presentation and spoke of some communication problems between horizontal Utica wells. After the announcement, Gulfport’s stock dropped 18.7%.
Despite the negative news from a major player in the Utica, it appears in terms of funding that confidence remains high for American Energy Partners and McClendon. In both Oklahoma and Ohio leasing is full steam ahead for the new company.
Other Aubrey McClendon activity
American Energy Partners has been interacting several major players. Hess sold 74,000 dry-gas Utica acres to the company in January of this year. EV Energy Partners LP is expanding a gas processing plant in southwest Carroll County after an agreement with American Energy Partners. For his operations in the Utica, McClendon is renting 7 rigs from his old company, Chesapeake.
Investors and companies are taking Aubrey McClendon’s new endeavor seriously. It will be interesting to see just how well the company does once it produces its first results.
What do you think? Are you bullish on American Energy Partners? What are your predictions for the Utica? Leave a comment below.
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