Bloomberg News

Chesapeake Energy, Encana Face U.S. Probe Over Land Deals

July 03, 2012

Chesapeake Energy Corp. (CHK:US) and Encana Corp. are under investigation by the U.S. Justice Department for possible collusion, according to a person familiar with the probe.

The Justice Department is examining whether the two companies coordinated to avoid bidding against each other for land deals in 2010, said the person, who declined to be identified because the investigation is confidential.

The Justice Department probe was reported earlier by Reuters. The alleged collusion involved discussions between the two natural gas companies over how to avoid bidding against each other for drilling rights in a public land auction in Michigan and in nine prospective deals with private land owners in the state, according to the report.

Jim Gipson, a spokesman for Oklahoma City-based Chesapeake, declined to comment. Chesapeake is the second-largest U.S. natural gas producer.

Belinda de Wolde, a spokeswoman for Calgary-based Encana, said she couldn’t comment on the Justice Department probe mentioned in the story.

“I can tell you Encana takes compliance with all laws very seriously and, as previously stated, our board chairman has initiated an investigation of this matter,” de Wolde said in an e-mail.

Encana, Canada’s largest gas producer, said on June 25 that it began an internal review of e-mails from 2010 between Encana and Chesapeake executives concerning bidding strategies for Michigan drilling rights.

To contact the reporter on this story: Sara Forden in Washington at sforden@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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Companies Mentioned

  • CHK
    (Chesapeake Energy Corp)
    • $19.84 USD
    • -0.45
    • -2.27%
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