Recent reports by Reuters and other by major media outlets document evidence of possible collusion in a previous Michigan state minerals lease auction. According to the Reuters article, “In emails between Chesapeake and Encana Corp, Canada’s largest natural gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago…”. In early September, 2012 the Calgary, Alberta, oil and gas producer reported that it received a subpoena from the antitrust division of the U.S. Department of Justice and a civil investigative demand from the Michigan Attorney General regarding the collusion allegations.
If such allegations have merit, the effects would strike at the heart of the founding principle of state natural resources management and mineral exploitation in Michigan. That principle is an agreement in which the people of Michigan sell the right to exploit finite natural resources in exchange for compensation that can be invested into protecting, preserving, and enjoying Michigan’s other natural resources into perpetuity. If there has been collusion to drive down state mineral lease auction prices, then the people of Michigan have been stolen from and the bedrock principle underlying Michigan’s mineral management eroded.
Included is Encana’s press release related to the subpoena.
CALGARY, ALBERTA — (Marketwire) — 09/05/12 — Encana’s (TSX: ECA) (NYSE: ECA) Board of Directors announced today that it has completed its investigation into allegations of collusion with competitors regarding land leasing in Michigan in 2010. Based on the results of the investigation, the Board has concluded that Encana did not engage in such conduct.
In June 2012 Encana’s independent Directors authorized its Chairman, Mr. David O’Brien, to oversee an investigation into the allegations. External legal counsel were retained in both the United States and Canada to assist in undertaking a thorough investigation, which was conducted independent of company management.
“We have taken this matter very seriously and over the past eleven weeks have conducted a very rigorous investigation,” says David O’Brien, Chairman of Encana’s Board of Directors. “We hope that the results of this thorough and independent investigation will help to assure our shareholders, staff and the public that they can continue to place their confidence in Encana. We want to reiterate that Encana remains committed to acting ethically and in compliance with laws in all that we do.”
The company has received a subpoena from the Antitrust Division of the United States Department of Justice and a civil investigatory demand from the Michigan Attorney General. The company will continue to fully cooperate with the investigations of both agencies.
Encana is a leading North American energy producer that is focused on growing its strong portfolio of diverse resource plays producing natural gas, oil and natural gas liquids. By partnering with employees, community organizations and other businesses, Encana contributes to the strength and sustainability of the communities where it operates. Encana common shares trade on the Toronto and New York stock exchanges under the symbol ECA.
SOURCE: Encana CorporationContacts: Encana Corporation Ryder McRitchie Vice-President, Investor Relations (403) 645-2007 Encana Corporation Lorna Klose Manager, Investor Relations (403) 645-6977 Encana Corporation Jay Averill Media Relations (403) 645-4747 www.encana.comSource: Encana Corporation
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