Two months after a bombshell lawsuit accused former chief executive Aubrey McClendon of stealing trade secrets, Chesapeake Energy has settled with a key defendant: an Ohio drilling venture that McClendon founded.
In a surprise announcement Tuesday, the privately held drilling entity American Energy-Utica and the natural-resource investor Energy & Minerals Group, one of AEU's major investors, announced a "confidential settlement" with Chesapeake.
The settlement, which the companies said involved the assignment of 6,000 acres of land in a key Ohio county and a combination of cash and "contingent cash payments" amounting to no more than $25 million, effectively removed AEU from the case. Litigation remains against McClendon, his privately held drilling operator American Energy Partners and other defendants, the announcement said. EMG, the biggest investor in AEU, helped broker the settlement.
McClendon, who was forced to retire as head of Chesapeake in April 2013, was replaced as CEO of AEU in December but continues as a director of the parent company and chairman of American Energy Partners' other subsidiaries.
News of Tuesday's deal drove up shares of Chesapeake to more than $15 per share. At the same time, it removed a legal risk that has put a damper on fundraising efforts for McClendon and his subsidiary drilling companies, including AEU.
But within minutes of the Utica announcement, McClendon fired back, asserting he had not approved the settlement and had been shut out of the negotiations.