Encana investigates US land buys
Canada’s Encana has initiated an investigation into alleged wrong-doing regarding US land purchases
The response came after company officials were accused of colluding with US rival Chesapeake over land bids in Michigan’s Collingwood shale basin. According to Reuters, inside information was used to secure lower land prices at a state mineral auction in May 2010, by avoiding competition for specific parcels.
The Collingwood is considered to be one of North America’s emerging unconventional basins. Both Encana and Chesapeake have been active buyers at state land sales, but Chesapeake has pulled back while Encana in June said it would accelerate actitivty.
At a land auction last month, Encana succeeded in winning 2,150 acres at a cost of about $4.12 million or $185 an acre.
Encana is the third-largest natural gas producer in the US after Chesapeake, and the second-largest in North America. In the first quarter of 2012 the company’s production averaged 3 billion cubic feet per day, split almost evenly between Canada and the US.
If true, the allegations would be a mark on a company that has purported to uphold the highest standards of corporate social responsibility. In a terse, two-sentence statement chairman David O’Brien said Encana “is committed to ethical business conduct” and compliance with all applicable laws.
"In accordance with Encana's policies, an investigation of this matter was immediately initiated... Encana therefore will not provide any further information at this time."