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Ex-Chesapeake CEO McClendon raises $1.7 billion to drill in Utica Shale

Aubrey McClendon (Reuters)
Aubrey McClendon (Reuters)

(Reuters) - An energy firm run by Aubrey McClendon, the former Chesapeake Energy Corp chief executive, has raised $1.7 billion to drill on shale acreage in Ohio's Utica Shale, the firm said on Wednesday.

Proceeds will initially be used to acquire and drill on about 110,000 acres in the southern portion of the Utica Shale.

Drilling operations will begin with one rig in the fourth quarter of 2013, and the firm plans to increase drilling activity to at least 12 rigs over the next 2 to 3 years, the firm said.

McClendon, who co-founded Chesapeake in 1989, left in April after clashes over spending with the company's board and a series of Reuters investigations led to civil and criminal probes of the company.

An internal investigation by Chesapeake's board has cleared McClendon of any intentional wrongdoing.

American Energy Utica LLC's (AEU) lead equity investor is private equity firm Energy & Minerals Group and additional equity was provided by First Reserve Corp and the energy firm's management.

AEU's debt investors include GSO Capital Partners, the credit investing division of Blackstone Group LP , Magnetar Capital and BlackRock Inc .

McClendon is also embroiled in a land dispute in West Michigan involving holdings in the Saugatuck area. Environmentalists and conservationists are attempting to block construction of a luxury condo-resort complex on property a holding company of his owns near the mouth of the Kalamazoo River that they say consists of sensitive dune land.

(Reporting by Anna Driver; Editing by Jeffrey Benkoe)

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