Chesapeake and Encana settle on Michigan collusion probe

Wooden gavel with American dollars
Source: DollarPhotoClub

Oklahoma City-based Chesapeake Energy will have to pay $25 million in a civil settlement with the state of Michigan for conspiring with Encana Oil & Gas to fix bids in oil and gas lease sales in the state in 2010 – Platts reports. Calgary-based Encana reached a $5 million settlement with the state in exchange for Michigan dropping charges against the producer.

The two companies agreed not to bid against each other which resulted in reducing leasing prices in the state’s Collingswood Shale play in early 2010. The state claimed that the plunge of the price for leasing acreage from $1,500/acre in May 2010 to $40/acre in October of that year was a direct result of the collusion of the two firms.

In addition to agreeing to the civil settlement – which also addresses the accusations that the shale company defrauded hundreds of private citizens by fraudulently cancelling their oil and gas leases in 2010 – Chesapeake entered two no contest pleas before Judge Scott Pavlich in Cheboygan Circuit Court to two misdemeanor charges, one count of criminal attempted antitrust violations and one count of false pretences.

“This is a victory for Michigan taxpayers and a victory for all the Michigan land owners who took deep hits to their pocketbooks following the October 2010 private land auction,” Michigan Attorney General Bill Schuette said in a Friday statement announcing the settlement.

Encana and Chesapeake – the two top lease-buyers in Michigan’s Collingwood Shale during a speculative land boom in 2010 – have been the subject of state and U.S. Department of Justice antitrust probes since 2012.

Article continues below this message

Have your opinion heard with Shale Gas International

We accept interesting, well-written opinion and analysis articles of up to 1,500 words, that offer unique insights into the shale industry. The articles cannot be overtly promotional in nature and need to fit into at least one of our content categories.

If accepted, the article must be exclusive to Shale Gas International website and cannot appear on any other websites, publications, etc. Each article may contain up to three links to external websites relevant to the content discussed in the piece.

If you would like to contribute to Shale Gas International website, please contact us at: editor[at]