Encana says internal probe found no evidence of land sale collusion

Encana says internal probe found no evidence of land sale collusion by Lauren Krugel, The Canadian Press, September 5, 2012, Canadian Business Magazine
CALGARY – Encana said Wednesday its board of directors has found no evidence the company colluded with a U.S. rival to suppress land prices in Michigan. … Encana hired outside legal counsel in Canada and the United states to undertake the investigation, which it says was done independent of company management. Encana spun off its oil assets in late 2009, making it focused almost exclusively on natural gas. The current period of stubbornly low natural gas prices has been particularly trying on Encana, and in order to cope, the company has been selling non-core assets, entering into joint-venture deals and focusing on more lucrative liquids-rich areas. During the second quarter, it posted a loss of US$1.48 billion, compared to a profit of $383 million a year earlier. Oklahoma-based Chesapeake was dogged by governance concerns in the months leading up to the collusion allegations. CEO Aubrey McClendon was stripped of his title as chairman in May following shareholder complaints that his personal business interests could conflict with those of the company he runs. As part of his compensation package, McClendon was allowed to purchase stakes in the oil and gas company’s wells. Investors had long complained about the program and the freedom Chesapeake’s board has allowed him to pursue his personal interests. Those complaints intensified earlier in the spring following reports that McClendon took out more than $1 billion in loans to pay for his stake in the wells. He got the money from a group to which Chesapeake was negotiating to sell assets. That raised concerns that McClendon’s private dealings with the group could have influenced Chesapeake’s decision to sell those assets.

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

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