Chesapeake to pay $25 million to settle Michigan charges
Michigan Attorney General Bill Schuette filed criminal charges against the company last year. He accused Chesapeake CHK, +0.00% of colluding with Encana, another oil and gas producer, to keep the price of natural gas leases in the state artificially low.
In a separate case, Schuette's office also filed racketeering and false pretenses charges against Chesapeake, saying the company had defrauded lease owners.
Chesapeake has previously called the cases meritless. On Friday a spokesman said the Oklahoma City-based company was happy to have settled the matter.
"We are pleased to have reached a mutually acceptable agreement with the Michigan Attorney General and to move past these legacy issues inherited from past management," said Gordon Pennoyer, a spokesman for Chesapeake.
The allegations date back to business done in 2010 under then-Chief Executive Aubrey McClendon, who was forced out of leadership in 2013.
Terms of the settlement call for Chesapeake to pay $25 million into a fund to compensate landowners. Schuette's office alleged the value of oil and gas assessments were held down when Chesapeake and Encana agreed not to bid against each other, which would have driven prices higher.
After claims are paid from that fund, $5 million will be doled out to the state, half to Michigan's Department of Natural Resources, and the rest to fund antitrust enforcement activities. ■