According to the second-biggest US natural-gas producer, the state of Michigan was biased in terms of cherry-picking its internal emails to suggest that its ex-chief executive officer had invited its Canadian rival, Encana Corp, to collude in dividing up the oil and gas lease bids. Chesapeake Energy Corp and Encana were reportedly charged in March by the state with conspiracy to halve the counties in which each would seek rights to conduct resource exploration ahead of a scheduled May 2010 auction, Bloomberg said. The collusion allegedly resulted to an devaluation of bid prices from $1510 per acre to $40.
In a filing yesterday in a Chebiygan state court, lawyers for the state had said Chesapeake emails indicated that the the US company and Encana had thrown in 50/50 on the bids. The lawyers also mentioned several portions in the emails that supposedly showed former Chesapeake CEO Aubrey McClendon was open to the competition.
One email portion in question was a message sent on June 25, 2010, wherein McClendon had said that he was determined to compete and win the energy leases and that Encana won't be sharing them.
Another email, which was addressed by McClendon to an Encana executive, read, "Should we throw in 50/50 (on Michigan) rather than bash each other's brains out on lease buying."
A later note also read, "(The companies could save) billions of dollars in lease competition."
McClendon has since left after a shareholder revolt last year, Bloomberg said.
Chesapeake had argued that the email exchanges did not indicate any deal it had supposedly agreed with Encana.
The state of Michigan has slapped conspiracy to restrain trade charges against the Oklahoma City-based company under its antitrust laws. If guilty, Bloomberg said Chesapeake could pay a fine worth a million dollars each for the two conspiracy counts it currently faces.
Chesapeake's lawyers said in the filing, "The only evidence the state can point to is a select group of documents in the case, but the documents taken as a whole make abundantly clear that no agreement was reached. Theories and speculation are not evidence."
