Chesapeake faces new charges on Michigan leasing; Encana settled criminal charges by paying 5 times the maximum penality

Chesapeake faces new charges on Michigan leasing by Bloomberg, June 5, 2014, Fuel Fix
Chesapeake Energy Corp., already facing antitrust claims in Michigan over bids on gas exploration rights, was charged with racketeering and fraud for allegedly lying to landowners about leases it took out on their property.

Michigan Attorney General Bill Schuette said in a statement Thursday that Chesapeake, the second-biggest U.S. natural gas producer, tied up landowners in 2010 by telling them existing mortgages were no barrier to leasing their properties, then citing those same mortgages as justification for canceling almost all the leases after competition for them ceased. “Chesapeake, therefore, obtained uncompensated land options from these landowners by false pretenses and prevented competitors from leasing the land,” the attorney general said.

The allegations announced Thursday follow earlier accusations that the company colluded with a unit of Calgary-based Encana Corp. to divide the Michigan counties in which they’d bid for exploration rights in 2010, driving down prices from $1,510 an acre for a May auction to less than $40 an acre in October.

Chesapeake, based in Oklahoma City, has denied those allegations. It has withdrawn from exploration in Michigan. “Theories and speculation are not evidence,” its lawyers said in a state court filing last month after a hearing over whether the state had sufficient cause to pursue the case.

“This action has no merit and we will vigorously contest these baseless allegations,” Gordon Pennoyer, a spokesman for Chesapeake, said of the new charges in an emailed message Thursday. The charges were filed in state court in Cheboygan, Schuette said. The town lies on the northern edge of Michigan’s Lower Peninsula. Chesapeake representatives must appear at an arraignment there on June 25, the attorney general said.

The single racketeering charge lodged against the company is a felony punishable by a fine of as much as $100,000. Chesapeake also faces eight counts of false pretenses, each subject to a fine of $10,000 or three times the value of money or property involved, whichever is more. The antitrust charge levied earlier carries a top penalty of $1 million. Encana last month agreed to pay $5 million to settle civil litigation over its leasing activities and to not contest a charge it tried to collude with Chesapeake. [Emphasis added]

[Refer also to:

May 10, 2014: After Encana agrees to pay $5Million fine in antitrust case, Michigan’s Attorney General dismisses second criminal charge against Encana

May 9, 2014: B.C. horse breeder recounts fracking sour gas leak scare caused by Encana

May 5, 2014: Starts Today to May 8, 2014: Encana and Chesapeake Criminal Anti-trust Hearing in Michigan: Encana pleads “no contest” and buys its way out on the first day with $5 Million Settlement

March 6, 2014: Feds investigate Plains Midstream after Alberta spill report, but not Encana frac’ing Rosebud’s drinking water aquifers

January 14, 2014: Judge stops US-record frack wells in Michigan

2013: Energy lobbyist, Ex Encana VP Gerard Protti, appointed as Alberta’s new top energy regulator

2013: Chesapeake, Encana sued in civil antitrust action filed by Northstar Energy

2013: Encana wants embarrassing audio file erased from Internet

January 14, 2013: Encana CEO Randy Eresman retires suddenly, News release confirms top executive stepping down after 35 years

September 14, 2012: Encana Reaches Compensation Deal for Sour Gas Leak

September 12, 2012: $250000 in community safety projects following Encana deadly sour gas leak

September 5, 2012: Ewart: Encana’s in-house exoneration only goes so far

September 5, 2012: Encana’s denial of collusion charges leaves many questions unanswered

September 28, 2010: EnCana Corporation facing criminal charges in BC for deadly sour gas leak

February 4, 2010: Failure Investigation Report: Failure of Piping at EnCana Swan Wellsite A5-7-77-14 L W6M [Frac sand implicated in Encana’s deadly sour gas leak]

September 28, 2007: EnCana to cut $1-billion if royalties rise

September 20, 2007: EnCana faces California gas price-fixing trial ]

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