Did Chesapeake Energy plot with a rival?
Reports claim the company colluded with EnCana to keep land prices down in Michigan.
Chesapeake Energy (CHK), the natural-gas and oil exploration and production company, and CEO Aubrey McClendon may be in hot water again. A Reuters report Monday says Chesapeake may have colluded with Canadian competitor EnCana (ECA) to keep land prices down in Michigan.
The news service examined a series of emails that appeared to suggest that the two companies were plotting to avoid "bidding each other up."
In response to an email from McClendon, a Chesapeake vice president said he had contacted Encana "to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim."
It has been a tough year so far for McClendon, and it will get even tougher if he and his company are found guilty of price fixing, a crime that carries fines into the millions of dollars.
A Chesapeake spokesman said that, while there have been conversations between the two companies, no agreement was ever made.
That may be hard to prove, and the emails seem to suggest that even though a deal was not reached, there was an element of plotting and planning going on.
The potential scandal is the last thing that McClendon needs after the Chesapeake board stripped him of his chairmanship earlier this month. McClendon came under fire after it was revealed that he took out over $1.3 million in personal loans from a company that also finances Chesapeake.
Before that, McClendon was the major cause of a Chesapeake stock free-fall after he sold hundreds of millions of dollars in stock to raise personal funds.
At this point, it is fair to say that McClendon is earning himself a shaky reputation. As the co-founder of Chesapeake, he is obviously a savvy businessman, but Forbes did not name him "America's most reckless billionaire" last year for nothing.
After the year that he's had, you'd think McClendon would have made an extra effort to keep his nose clean. Unfortunately, that has not been the case.
Chesapeake shares were down 8% Monday to about $17.
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