Chesapeake, Encana face criminal antitrust charges in Michigan
By Joshua Schneyer, Brian Grow and Anna Driver
March 5 (Reuters) - Oil and gas giants Chesapeake Energy and Encana Corp. were charged on Wednesday with colluding to keep oil and gas lease prices artificially low in the state of Michigan, the state Attorney General Bill Schuette said.
The announcement follows a lengthy investigation by Schuette's office into whether the firms -- the biggest land leasers during a speculative oil and gas leasing boom in Michigan's Collingwood Shale region during 2010 -- colluded to avoid prices from rising as they acquired land leases from landowners.
Michigan began looking into the companies' activities in 2012 after a Reuters investigation found that executives from the two firms discussed proposals to divide bidding responsibilities in the state for nine private landowners and counties in Michigan.
"I will aggressively prosecute any company who conspires to break the law," Schuette said in a statement.
The companies were charged with one count each of antitrust violations "relating to a contract or conspiracy in restraint of commerce," and one count each of attempted antitrust violations.
The boards of both Chesapeake and Encana previously conducted internal investigations and said they found no collusion. In earlier statements, the companies have acknowledged holding talks about forming a joint venture in Michigan during 2010, but said no agreement was ever reached.
The charges are misdemeanors which carry penalties that can include prison terms and fines for individuals, and up to a $1 million fine for a corporation.
In emails reviewed by Reuters in its investigation, then Chesapeake CEO Aubrey McClendon and other high-ranking Chesapeake and Encana executives discussed in 2010 how to keep lease prices on both state and private lands from rising by avoiding "bidding each other up."(r.reuters.com/deg27v) Continued...