Tom Ward, the former CEO of SandRidge has also been sued. This lawsuit could potentially impact his new venture – Tapstone Energy.
Investors who had erstwhile sold natural gas and oil land leases to now bankrupt SandRidge Energy Corp and to Chesapeake Energy Corp have sued Chesapeake and SandRidge’s former CEO, Tom Ward, for having conspired to defraud them by depressing the market for these leases.
According to Chisholm Partners LLC, an investment firm that owned leases in Kansas, and other leaseholders, the conspiracy began near about December 27, 2007 and continued up to March 31, 2012. This is as per the complaint filed in federal court in Kansas on July 13.
According to the filings, due to the conspiracy, investors lost more than $10 million. They are now seeking three times the amount in damages.
According to the complaint, SandRidge and Chesapeake divided the area covering the Anadarko Basin in Kansas and in other states and did not compete for the leases which drove down lease prices.
Significantly, Aubrey McClendon, a former executive from Chesapeake was indicted along with other unnamed co-conspirators on March 31, 2016 on federal charges of bid-rigging.
McClendon died in a car accident on March 2.
As per Chisholm, the other unnamed co-conspirators in the complaint were SandRidge and Chesapeake. Interestingly before Ward founded SandRidge in 2006, he co-founded Chesapeake with McClendon in 1989.
“We disagree with their assertions and will address them in the appropriate forum,” said Gordon Pennoyer, director of strategic communications at Chesapeake.
However, according to Chisholm both companies have acquired many gas and oil leases covering thousands of acres in Kansas in 2010. The main players for these leases were SandRidge and Chesapeake. Their bids caused lease prices to go up but when they did not outbid each other, lease prices starting plummeting. After this SandRidge stopped all communication with Chisholm.
As per Chisholm, he had entered into several lease agreements with Chesapeake on several dates in 2011. However on December 1, 2011, Chesapeake purchased the entire membership interest in Chisholm and subsequently sold the leasehold interests to SandRidge.
Officials at SandRidge and Tom Ward’s new company, Tapstone Energy, were not immediately available for comment.
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