Calgary-based Encana says it has launched an investigation into accusations in a news report that it colluded with a U.S. rival in order to keep land prices low in Michigan.
“In accordance with Encana’s policies, an investigation of this matter was immediately initiated,” David O’Brien, chairman of Encana’s board of directors, said in release.
“Encana therefore will not provide any further information at this time.”
The company’s shares closed down 81 cents, or four per cent, at $19.61 on the Toronto Stock Exchange Monday after Reuters reported the company allegedly plotted with U.S. rival Chesapeake Energy Corp. of Oklahoma City to keep land lease prices down.
Reuters said antitrust lawyers say a dozen emails it reviewed suggested there’s possible evidence that the two companies violated federal and state laws by seeking to keep land prices down.
The report alleges the companies talked about ways to avoid bidding against one another for land in Michigan’s Collingwood shale region, both at a land auction two years ago and in at least nine prospective deals with private landowners.
Chesapeake spokesman Jim Gipson says Encana and Chesapeake discussed forming an “area of mutual interest” joint venture in Michigan, but no deal was reached.
In an email to The Canadian Press, he also says the two companies did not make any joint bids.
In February, Gunnison Energy and SG Interests paid $275,000 US each to settle a case with the U.S. Department of Justice in which the government accused the two firms of rigging bids for land leases in Colorado.
Chesapeake has already been the focus of investor anger, which on Thursday resulted in the resignation of chairman and founder Aubrey McClendon, after a report that McClendon had taken a personal loan from a firm that conducted business with Chesapeake. McClendon continues as CEO of Chesapeake.
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