Bid-Rigging Charges Nothing New for McClendon

Energy

Published: March 2, 2016 9:10 am

Last Updated: January 13, 2020 12:29 pm

Founder and former CEO and chairman of Chesapeake Energy Corp. (NYSE: CHK) Aubrey McClendon was indicted late Tuesday on charges of conspiring to rig the price of oil and gas leases in Oklahoma. McClendon resigned as CEO on March 31, 2013, after giving up his chairman’s role in May of 2012.

This is not McClendon’s first rodeo. In June of 2012, Reuters revealed emails indicating that McClendon directed one of Chesapeake’s vice-presidents to “smoke a peace pipe” with Encana Corp. (NYSE: ECA) in an effort to rein in the bidding on leases for rights to drill on properties in Michigan’s Utica-Collingwood shale play. The two companies admitted discussing the formation of an “area of mutual interest,” but that no joint venture was formed, nor did the two companies submit any joint bids.

In February of 2013, Michigan oil and gas field developer Northstar Energy filed a federal civil suit against Chesapeake and Encana for colluding to keep the price of leases low in the Utica-Collingwood shale play. The suit was settled in 2015 for $25 million.