Chesapeake Energy Plays a Shell Game with Shale

Susan Phillips

Recent Stories

Susan Phillips tells stories about the consequences of political decisions on people's every day lives. She has worked as a reporter for WHYY since 2004. Susan's coverage of the 2008 Presidential election resulted in a story on the front page of the New York Times. In 2010 she traveled to Haiti to cover the earthquake. That same year she produced an award-winning series on Pennsylvania's natural gas rush called "The Shale Game." She received a 2013 Alfred I. duPont-Columbia University Journalism Award for her work covering natural gas drilling in Pennsylvania. She has also won several Edward R. Murrow awards for her work with StateImpact. In 2013/14 she spent a year at MIT as a Knight Science Journalism Fellow. She has also been a Metcalf Fellow, an MBL Logan Science Journalism Fellow and reported from Marrakech on the 2016 climate talks as an International Reporting Project Fellow. A graduate of Columbia School of Journalism, she earned her Bachelor's degree in International Relations from George Washington University.

January 6, 2012 | 11:24 AM

Scott Detrow / StateImpact Pennsylvania

Chesapeake CEO Aubrey McClendon speaks to the Marcellus Shale Coalition's "Shale Gas Insight" conference

An investigative piece by Reuters unearths a chain of shell companies created by Chesapeake Energy to compete in a Michigan land grab. The article explains how companies within companies hired outside contractors to get landowners to sign mineral leases without revealing Chesapeake’s involvement. And it was all perfectly legal. Or was it?

“To understand the role shell companies play in Chesapeake’s business, Reuters reviewed hundreds of pages of lease agreements, rejection letters and contracts, and more than a thousand pages of court records.
Reporters also interviewed more than three dozen land owners, lawyers and “landmen,” those who scout for areas rich with oil and gas and strike deals with land owners.”

The investigation reveals how landowners were signed up, only to have their contracts rejected, and farmers were left waiting for payouts that never came. The farmers are suing. Chesapeake says the purpose of hiding their company identity was to avoid a competitive land rush with other energy companies that could drive up prices. But once the contracts were rejected en masse, the land rush bubble burst. Prices dropped. And then another company with ties to Chesapeake stepped in and bought up leases on the cheap. Read the entire piece here.