Energy corporations sued in antitrust action

Northstar Energy, a major Michigan landowner, is suing Chesapeake Energy Corporation and Encana Corporation alleging that the two colluded to rig bids for oil and gas rights in 2010.

Chesapeake, which is the second largest United States producer of natural gas, faced criminal and civil probes last year following a series of Reuters investigations.  In June, Reuters reported that Chesapeake and Encana worked to suppress land prices in Michigan three years ago.  Northstar was one of the private landowners discussed.

In a lawsuit filed in a Michigan federal court on Friday, Northstar claims Chesapeake and Encana agreed to avoid bidding against each other for oil and gas rights on Northstar’s acreage.  The companies “formed an anti-competitive agreement and shared competitive and proprietary information” which is a violation of the United States federal antitrust law and Michigan statutes, according to the lawsuit.  Northstar’s also seeks treble damages, or triple the amount the plaintiffs say they lost out on due to the alleged collusion.

Last year, Reuters broke a report saying top executives at the firms discussed working together to prevent “acreage prices from continuing to push up”.  This was according to a June 15,2010 email from a top Chesapeake executive to a senior official with Encana.

Encana said it conducted its own probe that was completed in 2010 and concluded that the firm hadn’t engaged in collusion during the land leasing in Michigan in 2010.  Last week, Chesapeake’s board of directors said an internal review found the company did not violate antitrust laws.

Chesapeake announced in January that Aubrey McClendon will step down as chief executive on April 1s and Encana Chief Executive Randy Eresman retired unexpectedly earlier this year on January 11th.  He agreed to stay on in an advisory role until February 28th.  Both companies said the departures of their CEOs were unrelated to the ongoing antitrust investigations.

 

Posted in AntiTrust Law |