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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) 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.
"We have made a collective decision to wind down the operations of American Energy Partners," according to the statement.
The spinoffs "each have a bright future and will not be affected at all by this decision," the statement said.
The companies had contracts with AEP for management services, but the relationship was no longer necessary once each of the companies grew enough to have its own independent management team, according to a statement from EMG.
"While AEP initially provided G&A services and personnel to the EMG portfolio companies, they no longer use any services provided by AEP and each EMG portfolio company now directly employs their personnel," according to the statement.
On March 1, the U.S. Department of Justice indicted McClendon for breaking antitrust laws when bidding for land during his days at Chesapeake. He denied the charges.
The next day, Energy & Minerals told investors it would stop entering new deals with McClendon, with chief John Raymond citing the indictment as the main reason for pulling back.
Hours later, McClendon died in a fiery single-car crash when his Chevy Tahoe ran into a concrete embankment.
Energy & Minerals has made clear to its investors that it always had direct control over entities it invested in and that the plan was to always spin them off.
Reporting by Terry Wade in Houston and Heide Brandes in Oklahoma City, additional reporting by Jessica DiNapoli in New York City; Editing by Lisa Von Ahn, Bernard Orr