Chesapeake Receives DoJ Subpoena on Accounting for Asset Purchase

Chesapeake Energy Corp said it received a subpoena from the U.S. Department of Justice seeking information on the accounting methodology for the acquisition and classification of oil and gas properties.

 

Shares of the company fell as much as 9.3 percent in morning trading.

 

The No. 2 U.S. natural gas producer said in May that it had received subpoenas and demands for documents from the DoJ and some state government agencies in connection with investigations into possible violations of antitrust laws relating to the purchase and lease of oil and natural gas rights.

 

Chesapeake had also received subpoenas from the DoJ, the U.S. Postal Service and states, seeking information on how the company pays royalties to landowners.
 

The company said in a regulatory filing on Thursday it had engaged in discussions with the DoJ, the U.S. Postal Service and state agency representatives and continue to respond to such subpoenas and demands. (http://bit.ly/2dnnsWM)

 

Chesapeake had come under scrutiny when former Chief Executive Aubrey McClendon, who helped transform the U.S. energy industry with shale gas, was investigated and charged in March with conspiring to rig bids to buy oil and natural gas leases in Oklahoma.

 

McClendon died a day later, when his car slammed into an overpass.

 

Reuters reported in 2012 that McClendon had taken out more than $1 billion in loans using his personal stakes in thousands of company wells as collateral.

 

Chesapeake shares were down 4.2 percent at $6.46 on Thursday. Up to Wednesday's close, they had risen 50 percent this year.


(Reporting by Arathy S Nair in Bengaluru; Editing by Don Sebastian)