Two of Oklahoma's largest oil and natural gas companies are feuding over an aborted $28 million land deal in Michigan.
Enid's Continental Resources Inc. has filed a breach of contact lawsuit against Oklahoma City's Chesapeake Energy Corp. after the companies failed to complete a deal for Continental's Collingwood acreage.
Continental spokesman Brian Engel declined to comment on the pending litigation, while Chesapeake spokesman Jim Gipson said the lawsuit is the result of an “unfortunate commercial dispute” between the two companies.
The unconsummated deal was struck in June after an e-mail exchange between Continental CEO Harold Hamm and Chesapeake CEO Aubrey K. McClendon.
The lawsuit contends Continental passed up opportunities with other potential buyers when it agreed to sell its Michigan acreage to Chesapeake.
Continental accuses McClendon of failing to disclose that his company had “overcommitted” its land acquisition budget, according to the lawsuit.
Chesapeake has refused to negotiate with Continental since August, when it claimed there were some title defects in the Enid company's leases.
Chesapeake has delayed or refused to complete other purchases in that region as well, the lawsuit states.
“Chesapeake has convinced numerous leasehold owners in Michigan to sell leases to Chesapeake instead of other prospective purchasers, and then manufactured alleged title defects or other alleged justification not to close the agreements after discovering negative information concerning the zones within the Collingwood range,” according to the lawsuit.
Continental is seeking damages in excess of $75,000.
The lawsuit was filed in Garfield County District Court in August.
Continental filed an amended petition in the case last month, court records show.
Chesapeake had until Wednesday to file a response to the new petition, but the courthouse was closed due to heavy
“This is an unfortunate commercial dispute between two highly regarded Oklahoma-based companies that in all other respects share a great deal of mutual admiration for each other from the CEOs on down,” Chesapeake spokesman Jim Gipson said.