American Energy Partners is shutting down, just over two months after its founder and CEO Aubrey McClendon died in a car crash in northeast Oklahoma City.
AEP issued a statement Wednesday saying it decided to wind down operations, and that the five independent companies it launched would not be affected.
The Oklahoman’s Adam Wilmoth reports the company laid off half of its 100 employees on Wednesday:
The remaining employees have begun closing the company through a process expected to take two to four months, according to a source knowledgeable of the situation. American Energy Partners' actions Wednesday follow a series of bankruptcies and layoffs in the oil and natural gas industry as nearly two years of low prices have reduced revenues and led to budget cuts throughout the oil patch. American Energy Partners and Aubrey McClendon in November 2015 were involved in an attempt to raise up to $2 billion, but scrapped the effort after just $11.2 million was raised.
McClendon started AEP in 2013 after stepping down from Chesapeake Energy, the company he started three decades ago. At one point Chesapeake was the second-largest natural gas producer in the United States, but left due to what he described in an email to employees as “philosophical differences” with the company’s board of directors.
He started AEP almost immediately. The private affiliates manager built smaller units with the goal of spinning them off. McClendon raised $15 billion and hired 800 employees for his new venture, according to The Wall Street Journal’s Bradley Olson:
Most of those workers have joined subsidiary companies created by private equity backers includingJohn Raymond of the Energy and Minerals Group that were then spun off into stand-alone entities. Those companies include Ascent Resources LLC, White Star Energy LLC, Permian Resources LLC, Traverse Midstream LLC and Heritage Resources Management. None of them will be affected by the decision to close American Energy, the company said. American Energy in January struck a deal with Argentina’s state-run oil company, YPFSA, to help develop a large shale field in that country. At the time, YPF said Mr. McClendon’s company would make a $500 million commitment to energy exploration in Argentina. Mr. McClendon had also obtained a vast lease in Australia.
After McClendon died in March, the company announced plans to continue. But Wednesday’s statement from AEP’s leadership teams says the decision to close was made after consulting McClendon’s family.
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