Chesapeake Paid Up Front Before DOT Started New Interchange at El Reno

The Oklahoma Department of Transportation made sure it received millions up front from financially-struggling Chesapeake Energy in the construction of a new Interstate 40 interchange at El Reno before Chesapeake’s financial situation started down hill.

It was four years ago when the state announced construction of the Radio Road interchange and the construction is expected to be completed in November of this year. Total cost, according to a DOT spokesman will be around $17 million. Chesapeake Energy, then under the leadership of Aubrey McClendon as CEO, agreed to contribute to the financing of the project. Chesapeake paid for the purchase of the right of way, engineering costs and the relocation of utilities and also contributed cash to the overall construction costs. It also contributed another $2.5 million toward the total construction cost. The remaining $14.5 million came from the federal government. The interchange will be at the site of several energy firms that relocated to the east side of El Reno and did so when the oil and gas boom was underway.

That was before the oil and gas downturn hit Chesapeake hard, leaving it $15 billion in debt just two years after reporting a $586 million profit. In the past several months, the company laid off hundreds of workers, unloaded 8,500 wells in a major divestiture move and hopes to sell $1 billion more in assets this year, and recently stopped drilling in Pennsylvania and Ohio. Executives at the company say they will not file for bankruptcy.

As for the new interchange, an overpass bridge and diamond-shaped interchange are under construction with on-and-off ramps at Radio Road.