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Thursday, July 10, 2014

Chesapeake faces trial on bid-rigging in Michigan lease sale, (NYSE: CHK)

A judge in Michigan has ruled that Oklahoma-based Chesapeake Energy Corp must face a criminal trial on a charge of bid-rigging with competitor Encana Corp at a 2010 state land lease auction, citing evidence of a conspiracy between the companies that drove state lease prices down sharply.The ruling, issued on Wednesday by Judge Maria Barton of Michigan's Cheboygan County District Court, dismissed two other criminal charges brought against Chesapeake by the office of Michigan's Attorney General. The other charges alleged that the company struck a deal with Encana to avoid competing for land leases from private landowners in Michigan, and had attempted antitrust violations against those landowners."The direct and circumstantial evidence established that the parties did in fact strike an agreement to bid-rig the State sale," Barton's ruling says.It cites evidence including an email sent by Encana USA Chief Executive Officer Jeff Wojahn to a landman bidding on Encana's behalf on the morning of the October, 2010 auction. The email makes reference to a lease area on offer, stating that "This is a Chesapeake area and we will not be bidding."

Chesapeake Energy Corporation (Chesapeake) is a natural gas and oil exploration and production company. Shares of CHK fell by 0.99% or $-0.29/share to $29.02. In the past year, the shares have traded as low as $19.93 and as high as $29.92. On average, 9148640 shares of CHK exchange hands on a given day and today's volume is recorded at 7077720.