According to a Reuters article, Chesapeake Energy is the subject of a U.S. government investigation over possible criminal antitrust violations related to the purchase and lease of oil and gas properties in Michigan.
Reuters reported that the company will have to produce documents before a grand jury after receiving a subpoena from the antitrust division of the Justice Department’s Midwest field office.
The actions follow a June story from Reuters who reported that Chesapeake plotted with its top competitior Encana Corp. to suppress land prices in the Collingwood shale in Northern Michigan.
According to Reuters, emails between the companies showed them discussing how to avoid bidding against one another in a public land auction two years ago in Michigan and in nine other possible deals with private land owners.
Reuters reported that Chesapeake’s disclosure indicates the Justice Department has moved swiftly on the matter. The initial story about Chesapeake was published by Reuters on June 25 and four days later the subpoena was served.
Encana and Chesapeake both declined to comment to Reuters.
Chesapeake said in the filing with the U.S. Securities and Exchange Commission that it has also received demands for documents and information from state governmental agencies in connection with other probes relating to oil and gas rights transactions, Reuters reported.
The company said it plans to provide information in response to the investigations. It also said its board of directors is conducting an internal review on the matter.
Chesapeake has been operating under a cloud of legal and governance issues following Reuters investigations showing potential conflicts of interest on the part of McClendon as well as the collusion allegations.
Shares of Chesapeake fell to $20.10 from a New York Stock Exchange close of $20.31 in post market trading.