Encana's Board Concludes Company Didn't Engage in Collusion
Encana Corp. said Wednesday an internal investigation concluded that the natural-gas producer didn't engage in collusion with competitor Chesapeake Energy Corp. regarding Michigan land leasing in 2010.
The Calgary, Alberta, oil and gas producer also said it received a subpoena from the antitrust division of the U.S. Department of Justice and a civil investigative demand from the Michigan Attorney General regarding the collusion allegations.
The government investigation focuses on allegations that Encana and Chesapeake, two companies hurt by sharp drops in natural gas prices over the past year, agreed to split up bidding of shale leases between them at a public auction to avoid creating a bidding war that would drive up prices.
In June, Encana authorized Chairman David O'Brien to oversee the investigation. External legal counsels were retained in the U.S. and Canada to assist in the investigation, which was conducted independent of company management, the company said.
"We want to reiterate that Encana remains committed to acting ethically and in compliance with laws in all that we do," Mr. O'Brien said.
A Chesapeake spokesman declined to comment.
Oklahoma City's Chesapeake in August had also disclosed in a filing with the U.S. Securities and Exchange Commission that the Midwest Field Office of the Department of Justice's Antitrust Division had requested documents from the company for a grand jury investigation of possible violation of antitrust laws. Chesapeake said it also has received demands from state governmental agencies related to other investigations of its oil and gas rights leases and purchases.
Reuters reported in June that, in email exchanges, executives at Encana and Chesapeake discussed ways to avoid competing against each other for shale leases in Michigan. One email showed Chesapeake Chief Executive Aubrey McClendon directing a subordinate that it was time "to smoke a peace pipe" with Encana "if we are bidding each other up."
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