Chesapeake facing new charges in Michigan

Prosecutors in Michigan have filed nine felony charges against Chesapeake Energy Corp. stemming from its dealings with Michigan landowners during 2010 lease negotiations.
by Jay F. Marks Modified: June 5, 2014 at 9:32 pm •  Published: June 6, 2014
Advertisement
;

photo - Chesapeake Energy Corporation main campus at NW 63rd and Western, Friday, February 14, 2014. Photo by Doug Hoke, The Oklahoman
Chesapeake Energy Corporation main campus at NW 63rd and Western, Friday, February 14, 2014. Photo by Doug Hoke, The Oklahoman

Chesapeake Energy Corp. secured oil and natural gas leases from up to 800 landowners in northern Michigan in 2010 when the industry flocked to what was believed to be a lucrative area for new development.

It ended up honoring less than 30 of them, according to prosecutors who Thursday filed racketeering and fraud charges against the Oklahoma City-based oil and natural gas producer.

“We believe this action has no merit and we will vigorously contest these baseless allegations,” Chesapeake spokesman Gordon Pennoyer said.

Michigan Attorney General Bill Schuette contends Chesapeake and its agents used a scheme known as “cold drafting” to obtain lease options by false pretenses, preventing competitors from leasing land while not compensating the property owners.

Chesapeake allegedly directed its agents to lease land in northern Michigan, indicating the landowners’ mortgages would not be an obstacle. When competition for leasehold ceased, the company canceled nearly all of its leases, using mortgages as the purported basis, prosecutors said.

“I will defend and protect the taxpayers of Michigan in the face of fraudulent business practices,” Schuette said. “Scamming hardworking Michigan citizens is not how we do business in this state.”

Continue reading this story on the...

by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
+ show more


Trending Now


AROUND THE WEB

  1. 1
    Erasing Your Bad Memories May Soon Be Possible
  2. 2
    Supermarket Donates Ice Cube Sales To ALS, Challenges Competitors To Do The Same
  3. 3
    China is now using drones to catch “terrorists” in Xinjiang
  4. 4
    Exorcising a Phobia, One Stroke at a Time
  5. 5
    American Dream turned nightmare: 40 hour work week grows to 47-60 hours
+ show more