Crain’s Cleveland Business. An oil-and-gas exploration company that has made a big bet on Ohio is preparing for an initial public offering or a sale, The Wall Street Journal reports.
Oklahoma City-based Ascent Resources LLC, founded by late oilman Aubrey McClendon and two big energy-investment firms, “is interviewing bankers to shepherd an offering and aiming for a stock-market valuation of more than $3.5 billion,” the newspaper reports, citing people familiar with the matter.
A multibillion-dollar valuation of Ascent “would represent a sharp turnaround from a year and a half ago when the company lost its famous founder in a fatal traffic wreck, was mired in debt and suffering slumping commodity prices,” according to the story.
McClendon died in a car accident in March 2016. After that, The Journal says, private equity firms Energy & Minerals Group and First Reserve Corp. “doubled down on their investments in the company, infusing it with roughly $1.5 billion of new cash that was used to pay down its debt.”
In turn, The Journal says, Ascent “drilled one gusher after another on its 300,000 acres in eastern Ohio and West Virginia. During the first half of this year, for instance, Ascent drilled 20 of the top 25 producing oil wells in Ohio in addition to several of the largest gas wells, according to state data.”
Ascent’s interest in Ohio was consistent with that of McClendon’s former company, Chesapeake Energy Corp. His final years at Chesapeake “were marked by his enthusiasm for and huge gamble on Ohio’s Utica Shale,” The Journal notes. “Under his direction, Chesapeake spent more than $2 billion acquiring rights to drill 1.3 million acres in Ohio, or roughly 5% of the state’s land area. He promised state officials and investors that the Utica would be the ‘biggest thing to hit Ohio since the plow.’ ”
After he left Chesapeake in 2013, McClendon returned to Ohio and put Ascent — formerly known as American Energy Partners — on the rise here.
By Scott Suttell