Calgary gas producer says internal probe shows no wrongdoing

Calgary gas producer says internal probe shows no wrongdoing by Dan Healing, September 5, 2012, Calgary Herald
Encana Corp. reported Wednesday it has received a subpoena from the antitrust division of the U.S. Department of Justice in connection with alleged collusion with Chesapeake Energy Corp. on Michigan land deals in 2010. In a news release, the Calgary-based natural gas producer also said for the first time it is facing a “civil investigatory demand” from the Michigan Attorney General. The company has been silent on the situation since June, when it announced it would begin an internal investigation into allegations it plotted with Oklahoma-based Chesapeake to lower land prices in Michigan. The claims stemmed from a Reuters report that included alleged e-mails that suggested top company officials discussed ways to divide counties in Michigan so that neither company would bid against the other for what they then considered prime oil-and gas-acreage. Some of the e-mails were between Chesapeake CEO Aubrey McClendon and Encana USA president Jeff Wojahn, the story said. Reuters did not say where it obtained the e-mails.

In its release Wednesday, Encana said its internal investigation showed no improper conduct. “We have taken this matter very seriously and over the past 11 weeks have conducted a very rigorous investigation,” said chairman David O’Brien in the release. “We hope that the results of this thorough and independent investigation will help to assure our shareholders, staff and the public that they can continue to place their confidence in Encana. We want to reiterate that Encana remains committed to acting ethically and in compliance with laws in all that we do.” He was not available to give details of the investigation. Reporters were warned before the second quarter conference call in July that Encana executives would not answer questions about the issue.

Spokesman Jay Averill said Wednesday’s release was the first confirmation of a subpoena, adding he doesn’t know when Encana was notified. “What I do know is that it wasn’t disclosed earlier because we wanted to wait until we had a substantial update prior to releasing any further statements on this matter,” he wrote. Chesapeake has revealed in U.S. filings that it received a subpoena from the U.S. Department of Justice on June 30 requiring that it produce documents before a Michigan grand jury conducting “an investigation into possible violations of antitrust laws in connection with the purchase and lease of oil and gas rights.” Chesapeake spokesman Jim Gipson previously told the Canadian Press Encana and Chesapeake discussed forming an “area of mutual interest” joint venture in Michigan during the time of the e-mails, but no deal was reached. He also said the two companies did not make any joint bids. He added the company has invested some $400 million to acquire leases in Michigan. [Emphasis added]

[Refer also to: EnCana faces California gas price-fixing trial ]

This entry was posted in Case Related, Global Frac News. Bookmark the permalink.