Michigan attorney general charges Chesapeake Energy with another - Beckley, Bluefield & Lewisburg News, Weather, Sports

Michigan attorney general charges Chesapeake Energy with another antitrust violation

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Chesapeake is now facing an additional antitrust charge in Michigan's Cheboygan District Court.

Sydney E. Allen, spokesman for Attorney General Bill Schuette, said the state has amended its complaint to reflect a second charge of antitrust violation relating to a contract or conspiracy in restraint of commerce.

Allen said Michigan case law states that, if evidence of a different crime or an additional crime comes to light during preliminary examination, the prosecution “may amend the complaint accordingly or the judge, on their own motion, could amend the complaint based on the evidence presented.”

In March, Schuette had complained that Chesapeake Energy and Delaware-based Encana Oil & Gas USA conspired in 2010 to rig prices for oil and gas leases on public and private properties in Michigan's Collingwood and Utica shale plays.

In Michigan, public auctions of state-held oil and gas leases are held twice yearly – in May and October – by the state's Department of Natural Resources. Both Chesapeake and Encana purchased natural gas leases during the May 2010 public auction, paying $1,510 per acre. Five months later they paid only $40 an acre, Schuette said.

In 2012 the Reuters news agency released emails that suggest executives of the two companies discussed divvying Michigan counties up to avoid driving prices up through a bidding war.

The amended complaint now cites the company's alleged conduct during two specific time periods – May 1 to June 30 and Aug. 1 to Oct. 31 – as grounds for the complaint.

Encana recently agreed to pay $5 million to settle the case against it, choosing to plead no contest to one count of criminal attempted antitrust violations without admitting to any wrong doing.

Chesapeake, however, insists it did nothing wrong, pointing out an internal investigation by independent counsel commissioned by Chesapeake's board had concluded there had been no antitrust violation.

Based on evidence presented during the preliminary exam, Allen said it was clear, following witness testimony, that two alleged conspiracies took place in addition to the alleged attempted anti-trust violation.

The first charge of anti-trust violations relating to a contract or conspiracy in restraint of commerce allegedly occurred between May - June 2010 with regard to private landowners; the second allegedly occurred between August - October 2010 with regard to the State of Michigan's oil and gas lease auction.

The amended complaint alleges two counts of antitrust violations relating to a contract or conspiracy in restraint of commerce, a high court misdemeanor punishable by up to $1 million fine per count for a corporation, and one count of attempted antitrust violations, a misdemeanor punishable by a $1,000 fine.

Cheboygan District Judge Maria Barton has requested closing briefs, after which Barton will decide if there's enough evidence to warrant binding the case over to trial.