Chesapeake Energy Corp. and former SandRidge Energy Inc. CEO Tom Ward reached a settlement for $6.95 million in a class-action lawsuit accusing them of fixing prices in the Anadarko Basin.
The former owners of Chisholm Energy Partners filed a suit seeking $30 million against Chesapeake, SandRidge, Ward and the late Aubrey McClendon in 2016, claiming they conspired to keep prices low for acreage in Kansas and Oklahoma. In a filing with the U.S. District Court for the Western District of Oklahoma on Sept. 5, the plaintiffs said the lump-sum payment "represents an excellent result for the class."
The suit was filed after the death of McClendon, a former Chesapeake CEO, and was sparked by his indictment on federal charges in March 2016, shortly before his death.
As part of the settlement, reached after two days of negotiations, Chesapeake will pay $2.65 million and Ward will pay $4.3 million. Ward continues to deny that any action taken during communication with Chesapeake violated the Sherman Antitrust Act. "[A]bsent this settlement, [Ward] intends to vigorously defend those claims," according to a Sept. 5 court filing. Chesapeake also denied any wrongdoing.
The plaintiffs claimed Chesapeake and SandRidge were part of "an overarching conspiracy … to artificially lower and stabilize bonus and royalty payments to landowners throughout the Mississippian Lime play." They also said an eventual verdict in their favor was uncertain, helping to lead to the settlement.
U.S. District Court Judge Joe Heaton must approve the agreement.