AEP says spinoffs will not be hit by closure of McClendon's firm

Thu May 19, 2016 6:41pm EDT
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By Terry Wade and Heide Brandes

Oklahoma City (Reuters) - The closure of American Energy Partners after the sudden death of founder Aubrey McClendon will not affect companies it formed and spun off with Texas-based private equity firm Energy & Minerals Group, according to a statement from AEP.

McClendon, a U.S. fracking pioneer, started AEP to make a comeback after being ousted as chief executive officer of Chesapeake Energy Corp (CHK.N: Quote) in 2013. He received crucial support for his new venture from Energy & Minerals.

AEP, based in Oklahoma City, was deserted mid-day Thursday, except for a secretary. The company grew quickly until McClendon's death in a fiery single-car crash in March, which left behind a vast web of business and personal investments.

Restructuring experts anticipate that untangling McClendon's estate and business interests, a process starting with the closing of AEP, will be complex. It may span both probate court in Oklahoma and potentially also a separate corporate proceeding.

Bank lenders to AEP are working with legal and financial advisers, according to people familiar with the matter. AEP is also working with restructuring attorneys, the people said.

McClendon's will was filed in Oklahoma last month, and Thomas Blalock, the chief legal officer at American Energy Partners, was appointed special administrator, according to court records.

A spokeswoman for AEP referred comment to the statement the company issued.

AEP set up and then spun off five oil and gas companies, now known as Ascent Resources, White Star Energy, Permian Resources, Traverse Midstream and Heritage Resources Management. At least two of the companies were spun off after McClendon died.   Continued...

File photo of Aubrey McClendon walking through the French Quarter in New Orleans, Louisiana March 26, 2012.  REUTERS/Sean Gardner