UPDATE 1-Former Chesapeake CEO McClendon charged with bid-rigging of land leases

Tue Mar 1, 2016 7:14pm EST
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(Adds Chesapeake struck deal with DOJ, Reuters investigation)

By Brian Grow and Diane Bartz

March 1 (Reuters) - Aubrey McClendon, former chief executive officer of Chesapeake Energy Corp, was charged on Tuesday with conspiring to rig bids to buy oil and natural gas leases in Oklahoma, the Justice Department said.

Chesapeake itself is unlikely to face criminal prosecution, the company said.

"Chesapeake has been actively cooperating for some time with a criminal antitrust investigation by the Department of Justice regarding past land leasing practices," said Chesapeake Energy spokesman Gordon Pennoyer. "Chesapeake does not expect to face criminal prosecution or fines relating to this matter."

The indictment follows a nearly four-year federal antitrust probe into land-leasing during a shale-drilling boom, which began after a 2012 Reuters investigation found that Chesapeake had discussed with a rival, Canada's Encana Corp, how to suppress land lease prices in Michigan. The story sparked a federal antitrust investigation in that state, which was closed but led to evidence of alleged bid-rigging in Oklahoma. (reut.rs/1TPxUVy)

McClendon faces charges that he set up a conspiracy of two energy companies to not bid against each other in purchasing oil and natural gas leases in northwest Oklahoma from 2007 to 2012, said the department. Its indictment did not name either Chesapeake or Encana.

McClendon is now with American Energy Partners.

(Reporting by Brian Grow in Atlanta and Diane Bartz in Washington; Editing by Lisa Shumaker)