Federal investigators are probing whether Chesapeake
Energy Corporation (NYSE:CHK) violated antitrust laws when it purchased leases
to drilling rights in Michigan, the company said in a SEC filing Thursday.
Chesapeake said it had been subpoenaed by
the antitrust investigators belonging to the U.S. Department of Justice to
produce documents related to the purchase.
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The Atlanta-based natural gas producer has
to submit the documents for review by a grand jury in the Western District of
Michigan, it said in the filing. It added that it was co-operating with the
antitrust authorities in their investigations.
In the filing it also said it had received,
"demands for documents and information from state governmental agencies in
connection with other investigations relating to the company's purchase and
lease of oil and gas rights." The
company's board is also conducting its own investigations into the matter, it
said.
Reuters had reported about a possible collusion
between Chesapeake and Canada's Encana Corp to suppress land lease prices in
the Michigan area. The subpoena to the company was served on June 29, four days
after that news report.
Reuters had cited emails between the
executives of the two companies conspiring not to bid against each other for
the drilling rights.
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Chesapeake's shares have fallen 32 percent
so far this year amidst concerns over its business strategy, executive perks
and business decisions that have left i with a debt worth $14.3 billion. The
company is also going through a severe cash crunch.
Chesapeake shares fell more than 3 percent
to $19.68 on Friday and now down over 1% in the pre-market session.
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