Energy Leasing Practices | Russell T. Rudy Energy LLC
Aubrey McLendon was no stranger to controversy. “Rigzone” reports that one controversy that involved him will survive his demise. The day before his death, McClendon had been charged by the U. S. Justice Department with violating the Sherman Antitrust Act. Allegedly, he had been co-ordinating a scheme in which oil companies agreed not to bid against each other for oil and gas leases in Oklahoma. While the feds have moved to dismiss the charges against McClendon due to his death, they are apparently still investigating the practice.
Industry observers are watching the investigation with interest. Informal agreements not to compete for leases in certain areas were common when McClendon started in the industry, according to Charles Maxwell, former senior energy analyst at Weeden & Co. LP. There is disagreement among industry observers as to how common the practice is now. Lance Astrella, who specializes in energy litigation at Astrella Law P. C., observes, “I don’t think it’s uncommon”. On the other hand, John Lowe, an energy law professor at Southern Methodist University opines, “I don’t think this is business as usual.” At any rate, McClendon’s case is not unique and the negative implications for many in the industry are obvious.
Prosecution for agreeing to not compete for leases has met with mixed results. In Michigan, the state forced a settlement with Encana and Chesapeake for $30 million. However, courts are becoming stricter, requiring direct evidence of collaboration in recent cases. This has led prosecutors to change tactics and go after individual employees, rather than the companies themselves, as was the case with McClendon.
To read the article in its entirety, please go to http://www.rigzone.com/news/article.asp?hpf=1&a_id=143372&utm_ .
Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide. Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.
