“It's just another distraction,” said Dollarhide, whose firm holds Chesapeake stock and corporate bonds. “Chesapeake stock had come so far and so fast with the new chairman and the new board. They had miraculously distanced themselves from the nasty headlines that were hanging around in the spring that drove the stock down to $13 a share.”
Dollarhide said it's still too early to say whether the investigation will amount to much or if it will be just a black eye for Chesapeake.
“The best-case scenario is they'll have to pay some fines, but as we know, Chesapeake doesn't have deep pockets at this point,” Dollarhide said. “In this regulatory environment, the government is going to pay very close attention if there are anti-competitive means being employed to harm interests of landowners.”
Following the Reuters report, Encana said in June its board opened an investigation into the land deals in Michigan.
An Encana spokesman declined to comment Thursday on Chesapeake's filing and whether the Canadian company had been contacted by U.S. officials.
CONTRIBUTING: Business writer Don Mecoy