Wednesday, March 2, 2016

Aubrey Indicted

The Justice Department yesterday indicted former Chesapeake Energy CEO Aubrey McClendon for violating anti-trust statutes.  The DOJ alleges that he conspired with another unnamed company to decide beforehand who would bid for certain leases in northwest Oklahoma between 2007 and 2012 to avoid a bidding war to keep the lease bonus prices down.  Down the road, the two companies would split the leases.

This feels a bit like a full circle for me:  Aubrey and Chesapeake were the ones who first shined a bright light on the Haynesville Shale and sparked more than a few lease bidding wars.  I'm sure competing companies that had to pay large Haynesville bonuses feel more than a little schadenfreude that the man who may have torpedoed the economics on many Haynesville leases got caught suppressing lease bonus prices elsewhere.

It appears that Chesapeake cooperated with DOJ and does not expect to be charged, probably furthering the ill will between Chesapeake and its co-founder.  Not sure about unnamed Company B, which is also based in OKC.  I haven't seen that they've been identified yet, but it won't be that hard to figure out.

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