The new board members at Chesapeake Energy (CHK) have just settled into their seats, but they’ve got quite a bit of work to do. In fact, they’re knee-deep in it.
Today, Reuters came out with some more revelations about Chesapeake. Emails reviewed by reporters indicate that Chesapeake and Canadian natural gas giant Encana (ECA) may have discussed an agreement to hold down the price of land they were considering buying in the Collingwood shale play in Michigan. The two companies were considering a joint venture, but decided against it. The emails that Reuters obtained indicate that the companies wanted to avoid a bidding war on the potentially lucrative shale play. If there was collusion or price-fixing, the companies could be vulnerable to antitrust charges.
Jim Gispon, a spokesman for Chesapeake, told Barrons.com in an emailed statement: “While there were discussions between Encana and Chesapeake in 2010 about forming an “area of mutual interest” joint venture (an “AMI”) regarding leases in Michigan, no such agreement was reached between the parties and no AMI was formed.� Nor did Encana and Chesapeake make any joint bids.� Chesapeake has invested approximately $400 million to acquire leases in Michigan.”
Encana told Reuters they are undertaking an internal investigation, but did not immediately respond to our request for comment.
Update: Encana sent us the following statement:
Encana is aware of�the Reuters article regarding land leasing in Michigan in 2010.� Encana takes compliance with all laws very seriously and is committed to ethical business conduct�in all that we do.
�In accordance with Encana’s policies,�an investigation of this matter was immediately initiated,� says David O�Brien, Chairman of Encana�s Board of Directors.��Encana therefore will not provide any further information at this time.�
Chesapeake was recently down 9.2% and Encana was down 5.4%.
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