[NE W YORK] Investors who sold oil and natural gas land leases to Chesapeake Energy Corp and now-bankrupt SandRidge Energy Corp sued Chesapeake and Tom Ward, SandRidge's former CEO, alleging that they conspired to depress the market for those leases.
Chisholm Partners LLC, an investment firm that owned leases in Kansas, and other leaseholders said the alleged conspiracy started around Dec 27, 2007 and continued until at least March 31, 2012, according to a complaint filed in federal court in Kansas on July 13.
Chisholm said in the filing its investors lost more than US$10 million due to the alleged conspiracy and are seeking treble damages from the court.
On March 1, 2016, Aubrey McClendon, a former executive of Chesapeake, was indicted along with other unnamed co-conspirators, on federal charges of bid-rigging. Mr McClendon died in a car accident on March 2.
Chisholm said in the complaint that many believe the other unnamed co-conspirators were Chesapeake, SandRidge and Mr Ward. Before Mr Ward founded SandRidge in 2006, he co-founded Chesapeake with Mr McClendon in 1989.
Officials at Chesapeake, SandRidge and Tom Ward's new company, Tapstone Energy, were not immediately available for comment.
Chisholm said it acquired numerous oil and gas leases covering thousands of acres in Kansas in 2010. The company entered into discussions with several companies, including Shell Oil, SandRidge and Chesapeake.
Chisholm said the main competitors for the leases became Chesapeake and SandRidge, whose bids caused prices to increase. Then SandRidge stopped all communication with Chisholm.
Chisholm entered into agreements to sell leases to Chesapeake on several dates in 2011. Ultimately, on Dec 1, 2011, Chisholm said Chesapeake bought 100 per cent of the membership interest in Chisholm and subsequently sold the leasehold interests acquired to SandRidge.
Chisholm alleged Chesapeake and SandRidge divided the area covering the Anadarko Basin in Kansas and other states and agreed not to compete, which drove down prices for the leases.