Reports: Chesapeake, Encana Charged With Antitrust Violations In Michigan

(RTTNews) - Chesapeake Energy Corp. (CHK) and Encana Corp. (ECA.TO, ECA) colluded to keep lease prices low during an auction in Michigan in 2010 and thus violated anti-trust laws, state Attorney General Bill Schuette reportedly said.

The state of Michigan says the companies held discussions before a public auction in 2010. They planned to split up lands between themselves in the Collingwood Shale to avoid a bidding war.

Lease prices fell from $1,510 per acre to less than $40 per acre in the five months after the auction in May 2010, which might have been due to the alleged conspiracy.

The companies are being charged with one count each of antitrust violations and one count each attempted antitrust violations. While the antitrust violations carry a fine of $1 million, the attempted antitrust violations can be fined by $1,000 for each.

Encana has reportedly denied the charges. The firm said a board investigation found that no agreement was reached and no violation of antitrust law occurred. Chesapeake is said to be planning to fight the charges.

CHK ended down 0.7 percent on Wednesday at $25.50.

ECA closed up 0.3 percent at $19.58. The stock fell 0.4 percent on the TSX to settle at C$21.61.