Special Report: Chesapeake and rival plotted to suppress land prices Reporting

Special Report: Chesapeake and rival plotted to suppress land prices Reporting by Brian Grow and Joshua Schneyer in Gaylord, Michigan, and by Janet Roberts in New York; editing by Blake Morrison and Michael Williams, June 25, 2012, Reuters
In one email, dated June 16, 2010, McClendon told a Chesapeake deputy that it was time “to smoke a peace pipe” with Encana “if we are bidding each other up.” The Chesapeake vice president responded that he had contacted Encana “to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim.” McClendon replied: “Thanks.” … “The famous phrase is a ‘smoking gun.’ That’s a smoking H-bomb,” said Harry First, a former antitrust lawyer for the Department of Justice. “When the talk is explicitly about getting together to avoid bidding each other up, it’s a red flag for collusion, bid-rigging, market allocation.” … Each holds major land positions in several of the same shale-rich states. Their competitive streaks make the behind-the-scenes communications all the more striking. At least a dozen emails between top-level executives of the two firms address themes that competitors are warned not to discuss with each other, according to antitrust guidelines set by the American Petroleum Institute, the leading U.S. oil industry trade group. To avoid potentially illegal behavior when competitors meet at an industry conference, for instance, the trade group warns against discussing any number of topics, most of which Chesapeake and Encana covered in the emails reviewed by Reuters.

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