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Chesapeake Energy Corporation is an American energy company engaged in hydrocarbon exploration. It is headquartered in Oklahoma City. The company is named after the founder's love for the Chesapeake Bay region.
The company is ranked 373rd on the Fortune 500. According to a 2017 study, it was the 90th most polluting company in the world, being responsible for 0.1% of global industrial greenhouse gas emissions from 1988 to 2015.
In 2020, the company produced 445 thousand barrels of oil equivalent (2,720,000 GJ) per day, of which 69% was natural gas, 24% was petroleum, and 7% was natural gas liquids. As of December 31, 2020, the company had 802 billion barrels of oil equivalent (4.91×1012 GJ) of estimated proved reserves, of which 69% was natural gas, 23% was petroleum, and 8% was natural gas liquids.
In mid-2012, the U.S. Department of Justice (DOJ) began an investigation into whether Encana, Canada's largest natural gas company, "illegally colluded with Chesapeake Energy Corp to lower the price of Michigan exploration lands during a public land auction in May 2010." Encana's internal investigation determined in 2012 that it did not collude with Chesapeake. The investigation ended in 2014.
On June 5, 2014, the state of Michigan filed felony fraud and racketeering charges against Chesapeake Energy, alleging that the company canceled hundreds of land leases on false pretenses after it sought to obtain oil and gas rights. Michigan attorney general Bill Schuette claimed that the company "obtained uncompensated land options from these landowners by false pretenses, and prevented competitors from leasing the land." Chesapeake Energy disputed all charges. In 2015, the company settled the lawsuits by agreeing to pay $25 million to the landowners.
The company has faced thousands of lawsuits regarding the alleged under-payment of royalties due to individuals that rented land to the company. In 2013, the company agreed to pay $7.5 million to settle a class action lawsuit by Pennsylvania landowners. In 2017, the company agreed to pay another $30 million to Pennsylvania landowners.
On March 1, 2016, a DOJ federal grand jury indicted Aubrey McClendon for allegedly rigging the bidding process for land leases between December 2007 and March 2012. McClendon was charged of orchestrating a conspiracy in which two oil and gas companies, not named in the indictment, colluded not to bid against each other for the purchase of land in northwestern Oklahoma. According to the indictment, the companies decided ahead of time who would win bids, with the winner then allocating an interest in the leases to the other company, eliminating open competitive bidding. The DOJ said this was the first case resulting from a continuing federal antitrust investigation into price fixing, bid rigging, and other anti-competitive conduct in the petroleum industry.
The next day, on March 2, 2016, McClendon died in a single-occupant single-vehicle crash when he drove his vehicle straight into a concrete bridge embankment. The charges were dropped by the DOJ as a result of the death.
In 2004, then CEO Aubrey McClendon contributed $450,000 to the campaign of Tom Corbett for attorney general of Pennsylvania. These funds were cited as the reason Corbett won the election, with a narrow margin. When Corbett eventually became governor of Pennsylvania, he was very supportive of Chesapeake's fracking activity in Pennsylvania, and Pennsylvania was the only state without a severance tax on drillers, despite the fact that the budget for education was being reduced.
In 2008, then CEO Aubrey McClendon formed American Clean Skies Foundation, a non-profit foundation focused on selling the virtues of natural gas. The foundation was funded by the company and by McClendon. The foundation was criticized for doing nothing but pushing Congress to pass policies that benefited the company and McClendon's business interests.
