American Energy Partners Business Practices (Aubrey McClendon)

[metro]

Obviously we knew Aubrey's days were numbered as CEO, but what if he pulls a Tom Ward, go buys another up-and-coming O&G company, moves it to OKC, and grows it ala Sandridge, although hopefully with better fiscal policy. Think of the impact it could have on OKC including the much revered "mystery tower". Just a thought.

[LakeEffect]

If he really wants to run things his way, he'd need to have the capital or private additional capital to keep it from going public. He has many other personal investments and companies, so he's bound to try and grow some of them.

[BoulderSooner]

i would be shocked if AKM doesn't get back in the game so to speak ..

[ou48A]

It would not be hard for AKM to start buying and selling lessees or even drill them as a junior partner.
There are companies who do exactly this^ and only employ a hand full of employees.
For a billionaire this would only take a minimal amount of money to start.

[onthestrip]

At this point in his life Im not sure Aubrey would be too keen on being a junior partner or going to work on small time leasing and drilling activities. I can picture him thinking hes a little bigger than that.

[ou48A]

At this point in his life Im not sure Aubrey would be too keen on being a junior partner or going to work on small time leasing and drilling activities. I can picture him thinking hes a little bigger than that.

Why?
CHK was a junior partner on some projects.
Even the largest corporation in the world XOM is a junior partner on some projects.

This is about making money and not about feelings. AKM knows he needs to be making money so he can make more money so he can make even more money, then he can make the big money. He knows this and he know he has time in his life to do this.

[Rover]

Seems like there is plenty of acreage of near expiring leases that Aubrey could put together a nice portfolio for a start-up or to buy an existing company to agressively grow. The low gas prices won't last forever and he knows it. Reserves are relatively cheap.

Notice his non-compete is only 6 months. It would take that long to form or negotiate a company. I just can't see AM eating bon-bons and going to Thunder games every night. He is a A+++++ personality.

[ou48A]

At this point in his life Im not sure Aubrey would be too keen on being a junior partner or going to work on small time leasing and drilling activities. I can picture him thinking hes a little bigger than that.

There are companies who trade on the NYSE who act as near 100% junior partners with their drilling activities and own the rights to leases. Check out NOG.

[ou48A]

Seems like there is plenty of acreage of near expiring leases that Aubrey could put together a nice portfolio for a start-up or to buy an existing company to agressively grow. The low gas prices won't last forever and he knows it. Reserves are relatively cheap.

Notice his non-compete is only 6 months. It would take that long to form or negotiate a company. I just can't see AM eating bon-bons and going to Thunder games every night. He is a A+++++ personality.

+ He would have the advantage of hopefully of learing that he should not become too over extended.
There are good opportunities for a man of his skills.
I wish him well and future prosperity.

[metro]

Seems like there is plenty of acreage of near expiring leases that Aubrey could put together a nice portfolio for a start-up or to buy an existing company to agressively grow. The low gas prices won't last forever and he knows it. Reserves are relatively cheap.

Notice his non-compete is only 6 months. It would take that long to form or negotiate a company. I just can't see AM eating bon-bons and going to Thunder games every night. He is a A+++++ personality.

Yep, if you're an entrepreneur, it's in your blood to go out and make the kill so to speak, the thrill of the hunt is what keeps guys like this going.

[Rover]

Cramer says he will be back in the game.

Cramer Quick Take: Don't Buy Chesapeake on Takeover Rumors - TheStreet

[zookeeper]

I don't think I would trust him. What he does next may not even be up to him as he's still under federal criminal investigation by the Department of Justice.

[DowntownMan]

I wonder if Aubrey starts a new company...will he keep it private and not go public that way he doesnt have to answer to shareholders?

[Teo9969]

I wonder if Aubrey starts a new company...will he keep it private and not go public that way he doesnt have to answer to shareholders?

I'm not saying he couldn't, but he'd be heavily heavily scrutinized if he went public with a new company. He would likely not get any benefit of the doubt. I would think at this stage of the game that he's connected enough that he could build quite a large company without getting shareholders involved.

[bombermwc]

He's 53, and has a crapton of money. At this ponint, he could happily retire and never work again if he wanted. Since he's decided to get into the whole world of developement lately, i'd be more likely to see him leading a real estate firm for his special projects than anything. No, it won't rake in the cash like his other ventures, but his days of a waterfall of money coming in are over.

However, he has plenty in terms of stock assets as well. He's not going to be running around in an old Chevy pickup folks, so don't start shedding tears. The way he's treated his employees over the years, it's sort of a just desert that he got tossed. All his project-based employment structure was a crock. He thought nothing of laying off (and did) several hundred people at a time because that project was done. What a horrible way to run things.

[Just the facts]

If he gets into real-estate development I hope he is better at it then the people who were working for him are. If he needs someone to help provide a vision I would like to apply.

[Rover]

Aubrey's vision in real estate was about building a community around the campus which would offer a lifestyle to attract the best and brightest to the company. He wanted all the employees at all levels to be able to work and live in proximity to the company. I don't believe real estate development is his real love, and it probably moves too slowly for his interest. O&G is big, moves fast and offers huge upsides. Real estate in OKC not so much in comparison.

[Teo9969]

He's 53, and has a crapton of money. At this ponint, he could happily retire and never work again if he wanted. Since he's decided to get into the whole world of developement lately, i'd be more likely to see him leading a real estate firm for his special projects than anything. No, it won't rake in the cash like his other ventures, but his days of a waterfall of money coming in are over.

However, he has plenty in terms of stock assets as well. He's not going to be running around in an old Chevy pickup folks, so don't start shedding tears. The way he's treated his employees over the years, it's sort of a just desert that he got tossed. All his project-based employment structure was a crock. He thought nothing of laying off (and did) several hundred people at a time because that project was done. What a horrible way to run things.

His days of making a waterfall of money are only over if he's done trying. 53 is not very old for a CEO like AKM. He could build another billion-dollar company before he's 65.

[catch22]

His days of making a waterfall of money are only over if he's done trying. 53 is not very old for a CEO like AKM. He could build another billion-dollar company before he's 65.

Heck, Larry Nichols is 70 and is just now starting to hand over the keys at Devon. AKM has plenty of time to get another business started, and with his personality, it could be more to save face and make CHK look stupid for firing him. Remember he does have quite the ego.

[PhiAlpha]

He's 53, and has a crapton of money. At this ponint, he could happily retire and never work again if he wanted. Since he's decided to get into the whole world of developement lately, i'd be more likely to see him leading a real estate firm for his special projects than anything. No, it won't rake in the cash like his other ventures, but his days of a waterfall of money coming in are over.

However, he has plenty in terms of stock assets as well. He's not going to be running around in an old Chevy pickup folks, so don't start shedding tears. The way he's treated his employees over the years, it's sort of a just desert that he got tossed. All his project-based employment structure was a crock. He thought nothing of laying off (and did) several hundred people at a time because that project was done. What a horrible way to run things.

I think you are going way too far on this. If you're talking about something like hiring a bunch of contract landmen to run a leasing or title project and then endind the contract when the project is finished, you are being way over critical. That is standard practice in the oil and gas industry. You hire a bunch of contract workers when you need a bunch of people for a project but do not need them full time. At my company we have hundreds of contract landmen working on projects all the time, but there is a mutual understanding that they may get a call any day to pull the plug and stop all work immediately. That is the life of a contract oil and gas industry employee, it sucks, but they all know the risks. If they don't, they are kidding themselves. Contract employees are just that and when the contract is up, they are unemployed.

As far as full time employees of CHK, the vast majority of friends and family I know over there loved working for AKM. While not the best business manager and very demanding at times, they all say he provided the best working environment, salary, and benefits that they've ever experienced. In fact, I've heard that part of the philosophical differences between AKM and the board that led to him stepping down were related to how much they wanted to reduce the work force. the board wants to cutback on the staff and AKM did not. So you can blast him all day for poor business practices (especially with natural gas prices being so low) because those criticisms are definitely warranted, but its tough to knock how he treated his employees.

[zookeeper]

I think you are going way too far on this. If you're talking about something like hiring a bunch of contract landmen to run a leasing or title project and then endind the contract when the project is finished, you are being way over critical. That is standard practice in the oil and gas industry. You hire a bunch of contract workers when you need a bunch of people for a project but do not need them full time. At my company we have hundreds of contract landmen working on projects all the time, but there is a mutual understanding that they may get a call any day to pull the plug and stop all work immediately. That is the life of a contract oil and gas industry employee, it sucks, but they all know the risks. If they don't, they are kidding themselves. Contract employees are just that and when the contract is up, they are unemployed.

As far as full time employees of CHK, the vast majority of friends and family I know over there loved working for AKM. While not the best business manager and very demanding at times, they all say he provided the best working environment, salary, and benefits that they've ever experienced. In fact, I've heard that part of the philosophical differences between AKM and the board that led to him stepping down were related to how much they wanted to reduce the work force. the board wants to cutback on the staff and AKM did not. So you can blast him all day for poor business practices (especially with natural gas prices being so low) because those criticisms are definitely warranted, but its tough to knock how he treated his employees.

Do you read the newspapers or watch TV? This has to do with stuff that's got the company under SEC investigation and Aubrey McClendon is personally being investigated for criminal violations, including some potentially very serious crimes, and it has nothing to do with the company wanting to lay off more people than McClendon believes they should.

Also, it's really very easy to treat your employees well when you're doing it as CEO of a public company with shareholder's money. It can make you very popular, but in the long run was it best for those employees? You can't separate the bad business practices from the way he treated the employees, one fed the other. My guess is in 6 months or so many of those same employees would probably argue they would have been better off had he been more responsible.

[PhiAlpha]

Do you read the newspapers or watch TV? This has to do with stuff that's got the company under SEC investigation and Aubrey McClendon is personally being investigated for criminal violations, including some potentially very serious crimes, and it has nothing to do with the company wanting to lay off more people than McClendon believes they should.

Also, it's really very easy to treat your employees well when you're doing it as CEO of a public company with shareholder's money. It can make you very popular, but in the long run was it best for those employees? You can't separate the bad business practices from the way he treated the employees, one fed the other. My guess is in 6 months or so many of those same employees would probably argue they would have been better off had he been more responsible.

Yes, I'm aware of all of that and I'm very aware of what has been going on there for the last few years from a variety of sources inside the company. If it was just everything you mentioned, he would've been gone 7 months ago when the board was shuffled. AKM didn't want to inact many of the changes the new board suggested and that was the last straw for both parties. Nothing much is going to come of all the crap reported in the media, you can think what you want but don't believe everything you read or see on TV. It turned into a smear campaign then a criminal investigation. AKM's undoing had far more to do with the drop in natural gas prices, betting the company on one comodity, high debt, and the 2008 margin call then anything reported by Reuters. If natural gas hadn't dropped below $7, CHK and AKM wouldn't be plagued by most of the issues facing them today.

In the scheme of things, most of the improvements on campus were a fraction of the cost of the company's drilling budget and comparatively don't cost that much to maintain. Again, the reason for CHK's issues are low commodity prices, not the upkeep of 2 restaurants and a gym. Many of employees that you say would've been better off had he been more responsible probably wouldn't have been employed in the first place if CHK was being run more responsibly. Devon has near the same asset base and less than half the employees as do many other companies. At least many of them had the benefit of employment for 5-10 years or howeve long they were there.

[bombermwc]

PhiAlpha - Actually, i'm talking about HQ people. He just laid off 125 people in downtown OKC ovenight with no notice to them. The folks that are on-campus fall under the same category. They are known for using people in their "probation" period and tossing them out...basically treating them as temps. I've also been told by people that work there, that they really abuse you and your time as well....expecting you to do 1.5 or 2 people's worth of work on a daily basis, and not be compensated for it. If they simply wouldn't fire people so often, they might get somewhere in that manpower shortage....unless they're just trying to screw people over. I've had friends and family both work there in various areas. Given the stores I've heard, the all-awesome world of CHK seems to be a myth.

[Rover]

I am sure this is why Fortune/CNN Money every year names them one of the top 100 companies to work for (#18 last year).

I think that sometimes many here in OK are unaware/ignorant of the effort it takes to succeed at top companies in most highly competitive companies. Most are not 40 hr per week jobs. You can't have all the perks and go home at 5. And security only comes after proven results and always subject to business levels. Many industries fluctuate heavily by projects and work levels.

When you get that $150,000 a yr job that is no pressure, full of perks, fun, and secure as long as you want it.....stay there, because there aren't that many. Lol

[Just the facts]

Sadly, this is what happens when you become beholden to private equity firms and fund management companies. They only care about two things, money and how they can get more of it. In a world of nano-second trading Wall Street increasing couldn’t care less about 6 month plans, let alone 5, 10, or 20 year plans. The money literally has to be made this second. Up to 70% of all trading is now high frequency trading. Your employee sees on-site daycare while the private equity guy sees $10 that could have been his, and guess who gets to decide now – that’s right – the private equity guy and guess which option he is increasingly choosing.

Think I am wrong, walk into any company in America and in the lobby you will likely see a monitor with the company's stock price on display which serves as a reminder why you 'really' came to work that day.