UPDATE 1-Chesapeake, Encana face criminal antitrust charges in Michigan

Wed Mar 5, 2014 8:43pm EST
 
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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 Michigan, state Attorney General Bill Schuette said.

The criminal charges follow 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 keep 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 are being 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.

Under Michigan law, an antitrust violation is considered a misdemeanor, which carries penalties that can include fines and prison terms of up to two years for individuals, and up to a $1 million fine for a corporation.

Encana and Chesapeake still face a separate, federal antitrust investigation by the Department of Justice.   Continued...