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SandRidge, McClendon, And Yes, Even Some Energy Industry Optimism As 2016 Ends

Sue Ogrocki

Throughout 2016, the fallout continued from the downturn in energy prices that started more than two years ago. Commodity prices bottomed out at a 13-year-low earlier this year, but it’ll still be a long time before Oklahoma’s oil and gas sector fully recovers.

Several Oklahoma energy stories made national headlines earlier this year, from bankruptcies, stock exchange de-listings, and even the unexpected death of an industry godfather.

SandRidge Energy in downtown Oklahoma City.
Credit Brent Fuchs / The Journal Record
The Journal Record

SandRidge Saga

Nearly a year ago, the New York Stock Exchange formally delisted SandRidge Energy, and the company’s fortunes only seemed to go further downhill from there. The company went to an organized, prepackaged bankruptcy in May, and emerged in much better shape a few months later.

“Through that agreement, they were able to eliminate several billion dollars in debt. I think it was about $3 billion in debt, which is good for them, said The Journal Record’s senior reporter and digital strategist Sarah Terry-Cobo. “They got back on the stock exchange. Their stock prices are in the low-to-mid-$20s right now, and that has really created some momentum for SandRidge.”

Chesapeake Energy Corp. CEO Aubrey McClendon speaks during the opening of a compressed natural gas filling station in Oklahoma City, Sept. 8, 2009.
Credit AP
Chesapeake Energy Corp. CEO Aubrey McClendon speaks during the opening of a compressed natural gas filling station in Oklahoma City, Sept. 8, 2009.

McClendon’s Loss Closes Rocky Chapter Of Chesapeake History

One of the most surprising stories of 2016 was the March death of Chesapeake Energy founder and former CEO Aubrey McClendon.

“Aubrey's death really shocked everyone. He kind of seems to have this Steve Jobs effect on people,” Terry-Cobo said.

McClendon’s death affected not only the company he led at the time of his death - American Energy Partners, which now no longer exists - but his personal holdings as well. Individually, McClendon owed a lot of people a lot of money, and his probate case became more interesting with every development – everything from multi-million dollar wine auctions to a half-million-dollar claim based on a document that may be forged, The Journal Record’s Dale Denwalt reports:

A Tulsa businessman used a document created in 2007 as proof that he loaned $500,000 to Aubrey McClendon in 1991, according to a court filing by attorneys for the McClendon estate. In a motion for summary judgment against Thomas Quinn’s claim, the estate said two forensic examiners determined there is no way that the document purportedly signed by McClendon is authentic. A template using nearly identical language and formatting can be found with a Google search. That document, offered as a free template on the website of television personality Suze Orman, was created about 16 years after Quinn agreed to lend half a million dollars to the young oilman who had just founded Chesapeake Energy.

“The font that was used in this purported letter was a font called Tahoma, which really wasn't even released until 1995,” Terry-Cobo said. “These [court] documents said there's no possible way that he could've written this in 1991.”

Oil & Gas Optimism

As commodity prices continue to recover, Terry-Cobo says there are reasons for the industry to be optimistic heading into 2017. Oil and gas drillers are hedging production at current prices, which means they’re locked into that figure even if the price drops again.

“It's a really good risk management strategy, a lot of energy analysts and industry watchers think,” Terry-Cobo said.

She also says Chesapeake Energy has upward momentum as CEO Doug Lawler continues to sell assets in order to pay down debt and remain focused on recovery.

The Business Intelligence Report is a collaborative news project between KGOU and The Journal Record.

As a community-supported news organization, KGOU relies on contributions from readers and listeners to fulfill its mission of public service to Oklahoma and beyond. Donate online, or by contacting our Membership department.

The Journal Record is a multi-faceted media company specializing in business, legislative and legal news. Print and online content is available via subscription.

Brian Hardzinski is from Flower Mound, Texas and a graduate of the University of Oklahoma. He began his career at KGOU as a student intern, joining KGOU full time in 2009 as Operations and Public Service Announcement Director. He began regularly hosting Morning Edition in 2014, and became the station's first Digital News Editor in 2015-16. Brian’s work at KGOU has been honored by Public Radio News Directors Incorporated (PRNDI), the Oklahoma Association of Broadcasters, the Oklahoma Associated Press Broadcasters, and local and regional chapters of the Society of Professional Journalists. Brian enjoys competing in triathlons, distance running, playing tennis, and entertaining his rambunctious Boston Terrier, Bucky.
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