April 30, 2014 / 10:41 PM / 6 years ago

UPDATE 1-Justice Department ends antitrust probe of Chesapeake, Encana

(Adds Encana statement and recasts to reflect.)

By Brian Grow

ATLANTA, April 30 (Reuters) - The U.S. Department of Justice has ended a probe of possible antitrust violations by Chesapeake Energy Corp and Encana Corp related to their land-leasing activities in Michigan, the companies said.

Spokesmen for the two companies said Chesapeake and Encana have received closure letters from the Department of Justice, ending the government’s criminal probe into alleged antitrust violations in Michigan. The letters were not made available for review.

The news was reported earlier by Bloomberg News.

The Justice Department investigation began in 2012 after a Reuters report found that executives from Chesapeake and Canadian energy company Encana Corp discussed dividing up bidding responsibilities in Michigan involving nine private landowners and nine counties in Michigan. Chesapeake and Encana were the biggest leasers of land during an oil and gas rush in Michigan’s Collingwood Shale region during 2010.

The boards of both Chesapeake and Encana previously conducted internal investigations and said they found no collusion. The companies have acknowledged holding talks about forming a joint venture in Michigan during 2010, but said no agreement was ever reached.

“We are very pleased with the confirmation by the U.S. Department of Justice Antitrust Division that it has closed its grand jury investigation,” Encana spokesman Jay Averill said in a written statement. “The conclusion of their investigation is consistent with the findings of our independent investigation, and of our Board of Directors, that Encana did not engage in collusion with competitors in Michigan in 2010.”

A Justice Department spokesperson did not immediately respond to a request for comment.

Chesapeake and Encana still face state charges in Michigan. In March, Michigan’s attorney general, Bill Schuette, charged Chesapeake and Encana with colluding to keep oil and gas lease prices artificially low in the state. The companies were charged with one count each of antitrust violations “relating to a contract or conspiracy in restraint of commerce,” and one count each of attempted antitrust violations.

Both companies denied the Michigan charges and said they would fight the allegations.

A spokeswoman for the Michigan Attorney General said any federal investigation would be “independent of our state case.” (Edited by Michael Williams)

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