Image courtesy of Chesapeake Energy.

A group of oil and gas leaseholders have filed a lawsuit against Chesapeake Energy and former SandRdige Energy CEO Tom Ward for alleged lease bid rigging.

According to court documents seen by Reuters, Chisholm Partners and other leaseholders are suing Chesapeake for allegedly conspiring with SandRidge to rig lease bids in the Kansas portion of the Anadarko Basin and other areas.

The lawsuit alleges that Chesapeake and SandRidge divided the Anadarko Basin in Kansas and other states among themselves and agreed to not compete in the region, Reuters said.

According to Bloomberg, Ward is named in the suit but SandRidge Energy is not named as a defendant.

Ward co-founded Chesapeake Energy with Aubrey McClendon in 1989 before going on to establish SandRidge.

Ward currently serves as CEO and chairman of Oklahoma-based Tapstone Energy.

McClendon left Oklahoma-based Chesapeake in January 2013 and went on to serve as the CEO of American Energy Partners.

The plaintiffs allege that the conspiracy began in December 2007 and ran until at least March 2012.

According to the court documents seen by Reuters, Chisholm alleges that the conspiracy caused its investors to lose more than $10 million.

The plaintiffs are seeking at least $30 million in damages, Bloomberg said.

The suit was filed in a Kansas City federal court.

A Chesapeake Energy spokesperson told Reuters that the company disagrees with the “assertions and will address them in the appropriate forum.”

Ward has not commented on the matter.

Former Chesapeake Energy CEO Aubrey McClendon was indicted by a federal grand jury on charges of conspiring with another company to rig bids for the purchase of oil and natural gas leases earlier this year.

McClendon, who died just one day after the indictment was made public, denied any wrongdoing.

Although the Department of Justice did not disclose the name of the second company, a shareholder lawsuit indicated the second company was SandRidge Energy.

SandRidge confirmed in a regulatory filing in May that it was “no longer” the subject of a grand jury investigation.

Oklahoma-based SandRidge filed for Chapter 11 bankruptcy protection in May.


Leave a Reply