Aubrey McClendon comes home to the Utica and Magnum Hunter Resources cashes out of the Eagle Ford to drill in the Utica

Sid Richardson was a legendary Texas wildcatter with an insatiable appetite for risk. Leveraged right up to the cup of coffee in front of him, Richardson made and lost three fortunes. Stories abound of him with egg stains on his shirts living in a boarding house not only when he was down on his luck but also when he was in the chips. He died before he could lose his fourth fortune. A bachelor, with no time for anything but drilling wells in his younger life, he devoted time to philanthropy and bank rolling Texas politicians especially Lyndon Johnson in his later years. He bequeathed his estate to his nephew Perry Bass and that is how the famous Bass family of Fort Worth made its fortune. The oil industry has produced more unforgettable characters than Readers Digest. Names such as Armand Hammer, who took tiny Occidental Petroleum from a tiny over-the-counter stock to the twelfth largest company in the country after he had retired from his previous career. T. Boone Pickens, who for a long time ran an independent drilling company, Mesa Petroleum and H.L. Hunt the bigamist who inflicted his own brand of anti-communism on the country through his Life Line radio broadcasts are recognized by average Americans not so much for their wealth but rather their achievements and eccentricities but what all of them have in common is the ability to take incredible risks and  being clever enough to prevail. There are legions of unknown and drillers who, like Pickens, Hammer, and Hunt took grave risks and died broke. This brings us to Aubrey Kerr McClendon, the founder and former CEO of Chesapeake Energy who shares the dubious honor with Steve Jobs of being fired out of the company he created. He agreed to retire from Chesapeake in April of this year.

McClendon is anything but risk adverse. Forbes Magazine describes him as "America's most reckless billionaire". His tolerance for risk exceeded that of both the shareholder and the board of directors at Chesapeake but he believes in the Utica Shale. He said that Ohio's Utica Shale could be the "biggest thing economically to hit Ohio, since maybe the plow" and that it could be worth "half a trillion" dollars. He also went on to say that the play "is likely most analogous, but economically superior to the Eagle Ford Shale in South Texas." That is a mouthful! Being of the "go big or go home" school of thought he insisted that Chesapeake go big on the Utica to the tune of $20 billion. Chesapeake is now unwinding some of it Utica exposure but not McClendon. He is back with a vengeance with money raised from fellow oil men. He has already acquired through his new company, American Energy Partners 50,000 acres from Shell in the Ohio portion of the Utica and maybe about to acquire another 22,000. American Energy Partners is about the ruthless business of stealing McClendon's brain trust from Chesapeake. This week Chesapeake’s new CEO Doug Lawler announced the immediate departures of operating chief Steve Dixon, production chief Jeff Fisher, drilling head Steve Miller and HR boss Martha Burger. Chesapeake’s  general counsel Henry Hood left in May, along with public affairs chief Tom Price. Price reportedly said he intended to go to work with McClendon. T. Boone Pickens once quipped in a television interview I happened to see that you could go broke betting against Aubrey McClendon.
Magnum Hunter Resources of Houston, Texas seems to be betting with McClendon. It cashed in its chips in the Eagle Ford and is shifting its money to the Utica. Its CEO Gary Evans stated;

We've taken that money, and we've paid down our debt. But we've also made a strategic decision to significantly enhance our existing position in the Utica ... And we've strategically been accumulating acreage in these plays for the past 3 years ... And we have derived a comfort level of the acreage that we already owned, and we have felt and our board has felt that we needed to increase that position ... So what we see with respect to this region of the Utica is extremely exciting to us.

After about three years of exploration, the Utica is showing that it will not be another Eagle Ford in oil production but the mixture of oil, gas, and those very valuable natural gas liquids, propane, butane and ethane that it has a lot to offer drillers who aren't looking for big oil production. The Marcellus Shale located under Pennsylvania is a straight natural gas play and lower gas prices have hurt drilling in the Keystone state. Last week there were 52 rigs working in Pennsylvania; a year ago there were 66. In Ohio it's 34 working last week as opposed to 17 a year ago.
To me, Aubrey McClendon is cast in the same mold as Pickens, Hammer, Hunt, and Richardson. He's not afraid of winning and losing is not an option. It's good to see him back.