Gas Firm Gets Data Request -- WSJ
September 30 2016 - 3:03AM
Dow Jones News
By Erin Ailworth
Chesapeake Energy Corp. on Thursday said that it has received a
subpoena from the U.S. Department of Justice requesting information
on the company's accounting for oil and gas properties.
The Oklahoma City-based company disclosed the Justice Department
scrutiny of its accounting as part of a filing with the U.S.
Securities and Exchange Commission in which it announced a $1.1
billion debt offering.
A Chesapeake spokesman declined to discuss the subpoena. A
Justice Department spokesperson declined to comment on
Thursday.
Chesapeake previously disclosed it had received requests for
documents, information, and testimony in connection with possible
violations of antitrust laws relating to how Chesapeake purchases
and leases oil and gas rights. Its royalty payment practices also
have been the subject of federal and state subpoenas.
Chesapeake has "engaged in discussions" with the Justice
Department, U.S. Postal Service, and state agency representatives,
and continues "to respond to such subpoenas and demands," its
filing said.
Chesapeake shares fell 9.3% to $6.12 in 4 p.m. trading in New
York on Thursday.
Previous scrutiny of Chesapeake by federal investigators led the
Justice Department in March to indict the company's former chief
executive, Aubrey McClendon, on one count of conspiring to rig the
price of oil and gas leases.
Mr. McClendon -- a pioneering figure in oil and gas exploration
who helped launch a renaissance in U.S. energy production -- died
the next day, after his natural gas-fueled Chevy Tahoe crashed into
a bridge abutment and caught fire. The Justice Department dropped
its charge in the wake of Mr. McClendon's death.
Chesapeake has said it was cooperating with the price-rigging
probe and that it didn't expect to face criminal prosecutions or
fines related to the matter.
The company has struggled in recent years as it tries to
complete a corporate overhaul amid the worst downturn in crude
prices in a generation. Activist investors, including billionaire
Carl Icahn, led a shareholder revolt in 2012 that ultimately forced
out Mr. McClendon.
Earlier this month, Mr. Icahn sold more than half his stake in
Chesapeake, citing tax planning reasons. In a statement on the
move, Mr. Icahn praised Chesapeake's current CEO, whom he helped to
install.
"We believe that over the last few years Doug Lawler and his
team have done an admirable job, especially in light of the
circumstances," Mr. Icahn said in a posting on his website.
After Mr. Icahn reduced his stake, two Chesapeake directors with
ties to the billionaire resigned from the energy-producer's board
on Monday.
Write to Erin Ailworth at Erin.Ailworth@wsj.com
(END) Dow Jones Newswires
September 30, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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