Aubrey McClendon pursuing $100 million deal for drilling rights in Australia

Aubrey McClendon, CEO of Chesapeake Energy Corp., is pictured during the second half of Game 6 in the NBA basketball Western Conference finals, in Oklahoma City on June 6, 2012.  (AP Photo/Sue Ogrocki, File)
Aubrey McClendon, CEO of Chesapeake Energy Corp., is pictured during the second half of Game 6 in the NBA basketball Western Conference finals, in Oklahoma City on June 6, 2012. (AP Photo/Sue Ogrocki, File)

U.S. shale gas explorer Aubrey McClendon is negotiating a $100 million acquisition of Australian drilling rights in a move that marks the former Chesapeake Energy Corp. chief’s first foray overseas.

McClendon’s American Energy Partners LP signed a letter of intent and a three-month exclusivity agreement with Armour Energy Ltd. to acquire a 75 percent stake in 21.5 million acres of drilling rights, Brisbane, Australia-based Armour said in a statement on Thursday. Armour rose the most in three years.

Terms of the preliminary deal require American Energy to pay Armour as much as $18 million in signing bonuses and to spend $100 million on oil and natural gas drilling over five years. American Energy also has the option to acquire a 5 percent stake in Armour and a seat on the board of directors, according to the statement.

Work on the project should begin by May, Armour Chief Executive Officer Robbert de Weijer said in a phone interview. Separately, the company is seeking buyers for a stake in 7.8 million acres it holds in the same region, he said. Armour soared 49 percent to 7 Australian cents in Sydney.

The deal “vindicates Armour’s view that the McArthur Basin represents one of the worlds great opportunities for the discovery of a new frontier oil and gas province,” Nicholas Mather, Armour’s executive chairman, said in the statement.

McClendon, who co-founded Chesapeake in 1989 and built it into a U.S. gas titan before his ouster in a 2013 investor revolt, is showing confidence in Australian shale even asmajor international explorers such as Chevron Corp., ConocoPhillips and Statoil ASA have abandoned projects.

Northern Territory

John Raymond’s Energy & Minerals Group private equity firm, a key backers of McClendon’s post-Chesapeake activities, last week agreed to acquire an 18 percent stake in Australian shale rights held by closely-held Pangaea Resources Pty. McClendon and Raymond are investing in the county’s Northern Territory region.

In his home country, McClendon’s efforts to build a new shale empire since his forced departure from Chesapeake have foundered. American Energy has struggled under low energy prices and heavy debts incurred to amass a portfolio that stretches from the Great Plains to Appalachia.

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