Just days after Chesapeake brought in a new chairman and a host of new board members in an attempt to quell shareholder unrest over CEO Aubrey McClendon’s unconventional personal finances and the US$ 10 billion funding gap faced by the company, rumours have emerged that could see Chesapeake, along with rival Encana, in a significant breach of antitrust laws.
Emails between the Aubrey McClendon and a vice president of the company mentioned that Encana had been contacted “to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim.” According to Reuters, at least a dozen more emails on the subject could be sufficient evidence that the companies had broken the Sherman Antitrust Act, which forbids price fixing between competitors.
The penalties for breaking the Antitrust act can be severe with fines of up to US$ 1 million for individuals, US$ 100 million for companies and (rare) prison sentences of up to 10 years.
A spokesman from Chesapeake has denied the allegations of price fixing, saying that, “There were discussions between Encana and Chesapeake about forming an ‘area of mutual interest’ joint venture regarding leases in Michigan,” however no deal was ever made and the companies never made any joint bids.
Encana and Chesapeake own a combined total of 975 000 acres of land in Michigan.
Edited from various sources by David Bizley