Chesapeake Energy Corporation (NYSE:CHK) loves the spotlight, doesn’t it? Once again the energy behemoth has surfaced in the headlines over possible collusion with Encana Corp. According to a source familiar with the probe, the two top executives at the companies allegedly made a plot to avert bidding against each other in Michigan land deals in 2010.
The U.S justice department got wind of the scandal through a Reuters report. The insightful report also brought to light how the two natural gas heavyweights repeatedly made negotiations over email. Apparently, the negotiations were not primarily centered on one deal. The email negotiations actually touched on nine other prospective deals with private land owners within the state.
It didn’t come as a surprise that communication between the two companies commenced in 2010. This also happened to be the same year when Michigan’s Collingwood shale formation was deemed by many to be the most assuring new oil play. To add to it, EnCana Corporation (USA) (NYSE:ECA) and Chesapeake Energy Corporation (NYSE:CHK) were one of the high profile bidders on for land leases at that particular area at the time.
According to the source, a fixed time frame could not be placed on the probes. The source though restricted from public address only revealed that it would last for months if not longer.
Here is a sneak peek of some of the conversations in the emails; moreover between Chesapeake’s chief executive Aubrey McClendon and one of his deputies.
On June 16th 2010, McClendon told one of his deputies through an email, “It is time to smoke a peace pipe with Encana if we are bidding each other up”. The person contacted responded by noting that he had contacted Encana to discuss ways through which they could avert bidding each other up in the interim. McClendon then sent a ‘thank you’ email back to his deputy. This adds a new chapter to McClendon’s never ending scandals.
The justice department declined to give a comment as did the two companies.