The Talent

February 25, 2011 6:00 AM

Dealmaker of the Week: C. Ray Lees of Commercial Law Group

Posted by Tom Huddleston Jr.


C. Ray Lees, a member and M&A partner at Oklahoma City firm Commercial Law Group P.C.


Australian mining giant BHP Billiton's $4.75 billion purchase of Chesapeake Energy Corporation's Fayetteville Shale interests, announced Tuesday.


Chesapeake Energy Corporation, the Oklahoma City-based oil and gas producer that owns assets across the U.S.


The transaction would give BHP all of Chesapeake's Fayetteville Shale interests, which produce more than 400 million cubic feet of natural gas a day. BHP would control 500,000 acres of natural gas producing properties in northern Arkansas. The deal is expected to close in the first half of 2011.

Lees and Commercial Law Group led the way for longtime client Chesapeake, along with cocounsel Wachtell, Lipton, Rosen & Katz and Wilmer Cutler Pickering Hale and Dorr. Morgan, Lewis & Bockius is advising BHP. 


Chesapeake announced this month that it is selling properties in order to raise $5 billion to pay down its debt. In addition to this deal, the company sold oil and gas assets to the China National Offshore Oil Corporation in two transactions worth $1.08 billion and $1.3 billion, in October and February.

BHP expects the deal to increase its net reserve and resource base by 45 percent, the company said.


Commercial Law Group, along with Wachtell and Wilmer, has advised on each of Chesapeake's recent deals. The 11-lawyer Oklahoma firm serves as Chesapeake's primary outside counsel on corporate deals, according to Douglas Jacobson, Chesapeake's executive vice president of acquisitions and divestitures.

"For anyone that's familiar with Chesapeake, they know that we're a very transaction-oriented company on the acquisition/divestiture side," Jacobson says, adding, "and in the last few years we've had a number of divestiture vehicles."

Jacobson has worked with the firm and with Lees on such matters for as long as he's been with Chesapeake, 11 years. Larger firms are called on to advise Chesapeake on specific aspects of a deal--antitrust issues, for example--that fall outside of Commercial Law Group's specialty.

Still, Lees says his firm never has been at a competitive disadvantage due to its size. The firm has represented Chesapeake, "since before there was a Chesapeake," he says. He credits the firm's relationship with the company to Shannon Self, who was a name partner with Lees at Commercial Law Group's predecessor firm, Self, Giddens & Lees. Self, now a consultant with the firm, has a relationship with Chesapeake CEO Aubrey McClendon that goes back to high school, Self has represented the company  since before it formed in 1989, Lees says. 

(Note: The firm changed its name when Self cut down on practicing and Jared Giddens left the firm in 2001. "We just decided to get rid of the names and just stop having to mess with the letterhead every time somebody got added or somebody left," Lees jokes.)


Considering the number of similar Chesapeake deals that Lees has worked on of late, this one did not present him with much in the way of unique challenges, he says. His team has grown accustomed to working with outside counsel at larger firms, who provide added resources and expertise in areas where Lees's firm does not generally focus. "We've worked with [Wachtell's] David Katz now on several transactions, going back several years," he says. "They've helped us with the [Hart-Scott-Rodino Antitrust Improvements Act] filings, they've helped us with other regulatory matters--especially with the [Chinese companies]."

When it comes to working on a high-stakes, high-profile deal with a relatively small roster, Lees says it is "a joint effort." He normally has about four other attorneys from his firm working at his side, and will pull others onto the work when necessary. "It's obviously pretty high pressure when you get down to the end and you're rushing around trying to get things signed up," he says, adding that the work and the payoff are ultimately worth the stress. "It can be a lot of pressure, but it can also be a lot of fun. Chesapeake is a fun client. They're always doing something new, something innovative."


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Why is the "dealmaker of the week" almost aways a man? I don't believe that there are so few female "dealmakers."

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