Chesapeake Energy Receives Subpoena on Accounting PracticesBy
Chesapeake Energy Corp. said it’s facing U.S. Justice Department scrutiny of how the natural gas explorer accounted for its assets.
The second-largest U.S. gas supplier said the subpoena sought “information on our accounting methodology for the acquisition and classification of oil and gas properties and related matters,” according to a regulatory filing on Thursday. Shares fell as much as 9.3 percent, and were down 3.6 percent to $6.51 as of 10:49 a.m. in New York.
Chesapeake has taken $16 billion in impairments on its gas and oil fields since the beginning of 2015, according to data compiled by Bloomberg. More write downs probably are on the way, the company said in a filing last month. Chesapeake has lost money for six consecutive quarters.
Chesapeake has been at the center of antitrust probes of gas-lease auctions and government investigations into how it pays royalties to landowners. In Thursday’s filing, the Oklahoma City-based company said it’s been in discussion with federal and state agencies and continues to respond to demands for documents.
In early March, Chesapeake shares soared after it was disclosed the company was cooperating in the federal prosecution of former Chairman and Chief Executive Officer Aubrey McClendon for alleged bid rigging. Chesapeake received immunity under a Justice Department leniency program that shields companies from criminal charges if they are first to report antitrust violations. McClendon died in an Oklahoma City car crash on March 2.
Gordon Pennoyer, a Chesapeake spokesman, declined to comment. Peter Carr, a Justice Department spokesman, wasn’t immediately available to comment.
— With assistance by David McLaughlin