Case 5:16-cv M Document 1 Filed 03/03/16 Page 1 of 15 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

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1 Case 5:16-cv M Document 1 Filed 03/03/16 Page 1 of 15 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA BRIAN THIEME, on behalf of himself and all others similarly situated, Plaintiff, v. Civil Action No. 16-cv- 206-M CHESAPEAKE ENERGY CORP., CHESAPEAKE EXPLORATION, L.L.C., as successor by merger to CHESAPEAKE EXPLORATION, L.P., SANDRIDGE ENERGY CORP., TOM L. WARD, AND JOHN DOES Defendants. PLAINTIFF S ORIGINAL CLASS ACTION COMPLAINT Plaintiff Brian Thieme, by his undersigned attorneys, files this original class action complaint, both individually and on behalf of a class of all those similarly situated, for treble damages under the antitrust laws of the United States. NATURE OF THE ACTION 1. This action arises out of a conspiracy to rig bids and depress the market for purchases of oil and natural gas leasehold interests and properties containing producing oil and natural gas wells, in violation of Sections 1 and 3 of the Sherman Antitrust Act, 15 U.S.C. 1, 3. The conspiracy commenced on or around December 27, 2007, and continued until at least March 31, 2012 (the Class Period ). The defendants conduct resulted in a criminal indictment against Aubrey K. McClendon, a former executive of Defendant Chesapeake Energy Corp., for violations of Section Page 1 of 15

2 Case 5:16-cv M Document 1 Filed 03/03/16 Page 2 of 15 1 of the Sherman Act. See United States v. Aubrey K. McClendon, No. CR , (W.D. Okla. March 1, 2016). 1 JURISDICTION AND VENUE 2. This complaint is filed under Sections 4 and 16 of the Clayton Act, 15 U.S.C. 15 and 26, to recover treble damages, equitable relief, costs of suit, and reasonable attorneys fees for violation of Sections 1 and 3 of the Sherman Antitrust Act, 15 U.S.C. 1, 3. The Court has original federal question jurisdiction over the Sherman Act claim asserted in this complaint pursuant to 28 U.S.C and 1337 and Sections 4 and 16 of the Clayton Act, 15 U.S.C. 15 and Venue is proper in this District pursuant to Sections 4(a) and 12 of the Clayton Act, 15 U.S.C. 15 and 22, and 28 U.S.C. 1391(b), (c), and (d) because the defendants reside, transact business, are found within this District, and/or have agents within this District, and a substantial part of the events giving rise to Plaintiff s claims occurred and a substantial portion of the affected interstate trade and commerce described below has been carried out in this District. 4. This Court has personal jurisdiction over Defendants under 15 U.S.C. 22 and because, inter alia, each: a) transacted business in this District; b) purchased leasehold interests and producing properties in this District; c) have substantial aggregate contacts with this District; and d) engaged in an illegal price-fixing, bid-rigging and customer and market allocation conspiracy that was directed at, and had the intended effect of, causing injury to, persons and entities residing in, located in, or doing business in this District. PLAINTIFF 5. Plaintiff Brian Thieme is a citizen and resident of Colorado. Plaintiff Thieme owns mineral interests in Alfalfa County, Oklahoma. In 2011, he entered into an oil and gas lease with Defendant Chesapeake (specifically, on information and belief, Chesapeake Exploration) in which 1 On March 2, 2016, Aubrey McClendon was killed in a car accident in Oklahoma City, Oklahoma. Page 2 of 15

3 Case 5:16-cv M Document 1 Filed 03/03/16 Page 3 of 15 Chesapeake purchased a leasehold interest in his mineral estate. As part of the consideration for entering into such lease, Chesapeake paid Plaintiff Thieme a lease bonus. DEFENDANTS 2 6. Defendant Chesapeake Energy Corp. is a corporation organized under Oklahoma law with its principal place of business in Oklahoma at 6100 N. Western Avenue, Oklahoma City, Oklahoma Chesapeake Exploration, L.L.C. is a successor by merger to Chesapeake Exploration, L.P. Chesapeake Exploration L.L.C. is a limited liability company organized under Oklahoma law. Chesapeake Exploration, L.L.C. is made up of three members, Chesapeake Operating, L.L.C. (discussed above), Chesapeake E&P Holding Corporation, and Chesapeake Appalachia, L.L.C. Chesapeake E&P Holding Corp. is a corporation organized under Oklahoma law with its principal place of business in Oklahoma. Chesapeake Appalachia, L.L.C. is a limited liability company with Chesapeake Energy Corporation as its sole member. Chesapeake Energy Corporation is a corporation organized under Oklahoma law with its principal place of business in Oklahoma. 8. Defendant SandRidge Energy Corp. is a corporation existing and operating under the laws of the State of Delaware with its principal place of business at 123 Robert S. Kerr Avenue, Oklahoma City, Oklahoma Defendant Tom L. Ward is former CEO of Defendant SandRidge Energy. 10. Defendants John Doe Nos are other entities or persons whose identities are currently unknown to Plaintiff. John Doe Nos are alleged to have participated in the bid rigging and unlawful restraint of trade, and described herein. 2 Unless otherwise noted, the Complaint refers to Chesapeake Energy Corp. and Chesapeake Exploration, LLC, collectively as Chesapeake. Page 3 of 15

4 Case 5:16-cv M Document 1 Filed 03/03/16 Page 4 of 15 AGENTS 11. The acts Defendants have allegedly committed were authorized, ordered, or performed by their directors, officers, managers, agents, employees, or representatives while actively engaged in the management of Defendants affairs. Such agents include the landmen or lease hounds that facilitate the purchase of the leasehold interests and producing properties. INTERSTATE TRADE AND COMMERCE 12. Throughout the Class Period, Defendants and their conspirators conduct with respect to the purchases of leasehold interests and producing properties that are the subject of this Complaint were within the continuous and uninterrupted flow of, and substantially affected, interstate trade and commerce, which included: a) Entering into and executing transactions for the purchase of leasehold interests and producing properties that include purchasers and sellers from different states; b) Transferring or causing the transfer of money or payments across state lines in connection with purchases of leasehold interests and producing properties; and c) Selling oil, natural gas, and natural gas liquids in interstate commerce. FACTUAL ALLEGATIONS A. STRUCTURE, CONDUCT, AND PERFORMANCE OF THE MARKET FOR LEASEHOLD INTERESTS AND PRODUCING PROPERTIES 13. A leasehold interest in an oil and gas lease generally grants the lessee the right to develop the mineral interest to explore for and extract oil, natural gas, and natural gas liquids for a certain length of time. The typical oil and natural gas lease spans three to five years. However, the lease is considered held by production and continues indefinitely if the lessee extracts production in paying quantities ; that is, the lessee produces quantities sufficient to yield a return, however small, in excess of lifting expenses, even though well drilling and completion costs might never be repaid. The lease is held by production so long as the lessee maintains production in paying quantities. Page 4 of 15

5 Case 5:16-cv M Document 1 Filed 03/03/16 Page 5 of 15 Accordingly, the impact of Defendants combination and conspiracy affects the royalty paid, potentially, for generations. 14. In the oil and gas industry, exploration and production companies like Defendants Chesapeake and SandRidge Energy frequently compete to purchase leasehold interests. Such competition increases the prices of these leasehold interests, resulting in more money for parties like Plaintiff Thieme. 15. Exploration and production companies also compete to purchase interests in properties that are already producing in paying quantities. Producing properties are tracts of land with existing wells that are actively producing oil, natural gas, or natural gas liquids. The current lessee of the interest may sell to an exploration and production company like Defendants Chesapeake and SandRidge Energy. This transaction typically includes the underlying leasehold estate and the drilling infrastructure. 16. In the present case, Defendants Chesapeake and SandRidge Energy were engaged in the business of oil, natural gas, and/or natural gas liquid production during the Class Period. They were actual and potential competitors for the acquisition of the types of leasehold interests and producing properties described above, many of which are located in Oklahoma, Texas, Colorado, and Kansas and subject to the combination and conspiracy alleged in this Complaint. The leasehold interests in question comprise a geological formation referred to as the Anadarko Basin Region. 17. The Anadarko Basin Region, as that term is defined in this Complaint, includes the Anadarko basin, the Anadarko Woodford Shale Play, the South Oklahoma Woodford Shale Play, and the Mississippian Lime Play. The Anadarko Basin Region is one of the deepest and most prolific hydrocarbon producing fields in the continental United States. The basin reaches into parts of northwest Oklahoma, north Texas, southeast Colorado, and Kansas. 3 3 The Anadarko Basin Region is located within the following counties: Page 5 of 15

6 Case 5:16-cv M Document 1 Filed 03/03/16 Page 6 of 15 B. THE DEPARTMENT OF JUSTICE S INDICTMENT OF AUBREY MCCLENDON 18. On March 1, 2016, a grand jury indicted McClendon and other unnamed coconspirators on the charge of engaging in an unreasonable restraint of commerce in violation of Section 1 of the Sherman Act, 15 U.S.C The basis of the indictment was the combination and conspiracy that Mr. McClendon, the other defendants named herein (including Chesapeake, SandRidge Energy, and Tom Ward), and unknown co-conspirators engaged in to suppress and eliminate competition by rigging bids for certain leasehold interests and producing properties. 19. The purpose of the combination and conspiracy was to suppress the prices that Defendants Chesapeake and SandRidge Energy paid to acquire certain leasehold interests and producing properties in the Colorado, Kansas, Oklahoma, and Texas by eliminating competition between Chesapeake and SandRidge Energy for the purchase of such leasehold interests and producing properties. Ø Oklahoma: Alfalfa, Atoka, Beckham, Blaine, Caddo, Canadian, Carter, Coal, Cotton, Creek, Dewey, Ellis, Garfield, Garvin, Grady, Grant, Greer, Harmon, Harper, Hughes, Jackson, Jefferson, Kay, Kingfisher, Kiowa, Lincoln, Logan, Major, McClain, McIntosh, Noble, Osage, Pawnee, Payne, Pittsburg, Roger Mills, Stephens, Tulsa, Washington, Washita, Woods, Woodward. Ø Texas: Sherman, Hansford, Ochiltree, Lipscomb, Moore, Hutchinson, Roberts, Hemphill, Potter, Carson, Gray, Wheeler, Donley, and Collingsworth. Ø Colorado: Las Animas and Baca. Ø Kansas: Barber, Butler, Clark, Coffey, Comanche, Cowley, Dickinson, Edwards, Elk, Finney, Ford, Gove, Grant, Gray, Greenwood, Harper, Harvey, Haskell, Hodgeman, Kearny, Kingman, Kiowa, Lane, Logan, Lyon, Marion, McPherson, Meade, Montgomery, Ness, Pawnee, Pratt, Reno, Rice, Rush, Saline, Scott, Sedgwick, Seward, Sheridan, Sherman, Stafford, Stevens, Sumner, Thomas, Trego, Wallace, Wilson, Wichita, and Woodson. 4 A copy of the indictment, captioned United States v. Aubrey K. McClendon, No. CR , (W.D. Okla. March 1, 2016), is attached as Exhibit 1. Page 6 of 15

7 Case 5:16-cv M Document 1 Filed 03/03/16 Page 7 of The indictment detailed the manner in which Defendants carried out the bid rigging combination and conspiracy. According to the indictment, Defendants accomplished the combination and conspiracy by: a) engaging in communications concerning certain leasehold interests and producing properties, and the prices therefor, in the Western District of Oklahoma; b) agreeing during those communications that [Defendants Chesapeake and SandRidge Energy] would not compete against one another for certain leasehold interests and producing properties in the Western District of Oklahoma either by one company not submitting offers or bids to certain owners of leasehold interests and producing properties, or by one company withdrawing previously submitted offers or bids to certain owners of leasehold interests and producing properties in exchange for a share or a subset of the leasehold interests and/or producing properties purchased by the other company at the acquisition cost; c) submitting offers or bids, withholding offers or bids, or acting to withdraw previously submitted offers or bids, to owners of certain leasehold interests and producing properties in the Western District of Oklahoma in accordance with the agreement reached; d) acquiring certain leasehold interests and producing properties in the Western District of Oklahoma at collusive and noncompetitive prices and then providing the nonacquiring co-conspirator a share or a subset of the leasehold interests and/or producing properties at the acquiring co-conspirator s cost; and e) employing measures to keep their conduct secret, including, but not limited to, agreeing not to reveal their anticompetitive agreement to the owners of the leasehold interests and producing properties at issue in this Indictment, and instructing their subordinates to do the same. 21. The above-described combination and conspiracy artificially depressed the prices of the leasehold interests and producing properties that Defendants Chesapeake and SandRidge Energy purchased. The combination and conspiracy affected not only the interests and properties that Defendants Chesapeake and SandRidge Energy purchased, but also the overall market. Thus, sellers of leasehold interests and producing properties to entities other than Defendants Chesapeake and SandRidge Energy received less value than they would have in a competitive market, despite the fact that they did not sell to Chesapeake and SandRidge Energy. Page 7 of 15

8 Case 5:16-cv M Document 1 Filed 03/03/16 Page 8 of Mr. McClendon derived considerable personal benefits from the combination and conspiracy through Chesapeake Founder Well Participation Program. ( FWPP ). The FWPP permitted Mr. McClendon and Defendant Tom Ward to continue participating as working interest owners in new oil and natural gas wells drilled by the Chesapeake. Mr. McClendon was thus permitted to participate in all of the wells spudded by or on behalf of the Chesapeake during each calendar year. Defendant Tom Ward s participation rights in the FWPP terminated on August 10, 2006, the date he resigned from Chesapeake. Defendant Ward s participation in the program therefore predates the Class Period. 23. Defendant Ward, however, did participate in a similar program at Sandridge Energy, which was called the SandRidge Executive Well Participation Program, during the Class Period. Mr. Ward was able to participate in all of the wells spudded by or on behalf of Sandridge Energy throughout the Class Period. On information and belief, Mr. Ward did in fact participate in such wells. Thus, Defendant Ward, like Mr. McClendon, obtained personal benefits from the combination and conspiracy. CLASS ACTION ALLEGATIONS 24. Plaintiff brings this action on behalf of himself and as a class action pursuant to Rule 23(a), (b)(2) and (b)(3) of the Federal Rules of Civil Procedure on behalf of the following subclasses (collectively, the Class ): Direct Seller Class: All persons and entities who 1) sold to Defendants 5 leasehold or working interests on lands within the Anadarko Basin Region with no producing oil and gas of wells or 2) who owned tracts of land within the Anadarko Basin Region with producing oil and gas wells where Defendants purchased such land s leasehold and working interests, at any time between December 27, 2007 and March 31, Excluded from the class are Defendants, 5 Defendants as used in the class definition include any predecessor, subsidiary, agents (such as landmen), or affiliate of Defendants. Page 8 of 15

9 Case 5:16-cv M Document 1 Filed 03/03/16 Page 9 of 15 any parent, subsidiary or affiliate thereof, and Defendants officers, directors, employees, and immediate families. Diminution in Sales Price Class: All persons and entities who 1) sold to parties other than Defendants 6 leasehold or working interests on lands within the Anadarko Basin Region with no producing oil and gas wells or 2) who owned tracts of land within the Anadarko Basin Region with producing oil and gas wells where such leasehold or working interests were sold to a party other than Defendants, at any time between December 27, 2007 and March 31, Excluded from the class are Defendants, any parent, subsidiary or affiliate thereof, and Defendants officers, directors, employees, and immediate families. 25. Plaintiff does not know the exact number of members of the Class because such information is in the exclusive control of Defendants. Due to the nature of the trade and commerce involved, however, Plaintiff believes that Class members number at least in the hundreds or thousands and are sufficiently numerous and geographically dispersed so that joinder of all Class members is impracticable. 26. There are questions of law and fact which are common to the claims of Plaintiff and the Class, including, but not limited to: a. Whether Defendants engaged in a combination or conspiracy with their co-conspirators to rig bids and/or allocate the market for the purchase of leasehold interests and producing properties; b. Whether the purpose and/or effect of the acts and omissions alleged herein was to restrain trade, or to affect, fix, or depress the price of leasehold interests and producing properties; c. Whether Defendants violated Sections 1 and 3 of the Sherman Act (15 U.S.C. 1, 3); d. Whether Defendants agents, officers, employees, or representatives participated in correspondence and meetings in furtherance of the illegal conspiracy alleged herein, and, if so, whether such agents, officers, employees, 6 Defendants as used in the class definition include any predecessor, subsidiary, agents (such as landmen), or affiliate of Defendants. Page 9 of 15

10 Case 5:16-cv M Document 1 Filed 03/03/16 Page 10 of 15 or representatives were acting within the scope of their authority and in furtherance of Defendants business interests; e. Whether, and to what extent, the conduct of Defendants caused injury to Plaintiff and members of the Class, and, if so, the appropriate measure of damages; and f. Whether Plaintiff and members of the Class are entitled to injunctive relief to prevent the continuation or furtherance of the violation of Sections 1 and 3 of the Sherman Act. 27. Plaintiff s claims are typical of the claims of the members of the Class. 28. Plaintiff will fairly and adequately assert and protect the interests of the Class Plaintiff s interests are coincident with, and not antagonistic to, those of the other members of the Class. 29. Plaintiff is represented by counsel competent and experienced in the prosecution of antitrust and class action litigation. 30. The questions of law and fact common to the members of the Class predominate over any questions affecting only individual members. 31. A class action is superior to other available methods for the fair and efficient adjudication of this controversy because: a. The Class is readily definable and one for which records should exist in the files of Defendants. b. Prosecution as a class action will eliminate the possibility of repetitious litigation. c. Treatment as a class action will permit a large number of similarly situated persons to adjudicate their common claims in a single forum simultaneously, efficiently, and without the duplication of effort and expense that numerous individual actions would require. d. Class treatment will permit the adjudication of relatively small claims by many Class members who otherwise could not afford to litigate an antitrust claim such as is asserted in this complaint on an individual basis. Page 10 of 15

11 Case 5:16-cv M Document 1 Filed 03/03/16 Page 11 of This class action presents no difficulties of management that would preclude its maintenance as a class action. TOLLING OF THE STATUTE OF LIMITATIONS 33. Plaintiff had neither actual nor constructive knowledge of the facts constituting its claim for relief. 34. Plaintiff and members of the Class did not discover, and could not have discovered through the exercise of reasonable diligence, the existence of the conspiracy alleged herein until at or about March 1, 2016, the date on which the indictment of Mr. McClendon and the unnamed co-conspirators became public. 35. Defendants engaged in a secret conspiracy that did not reveal facts that would put Plaintiff or the Class on inquiry notice that there was a conspiracy to fix prices for leasehold interests and producing properties. 36. Accordingly, Plaintiff could not have had either actual or constructive knowledge of the price fixing scheme until Mr. McClendon and the unnamed co-conspirators indictment became public. 37. Because Defendants agreement, understanding and conspiracy was kept secret, Plaintiff and members of the Class were unaware of Defendants unlawful conduct alleged herein and did not know that the prices for which they sold their leasehold interests or producing properties were artificially depressed during the Class Period. COUNT I Violation of Section 1 and 3 of the Sherman Act (15 U.S.C. 1, 3) 38. Plaintiff incorporates by reference the preceding paragraphs as if fully set forth herein. Page 11 of 15

12 Case 5:16-cv M Document 1 Filed 03/03/16 Page 12 of Defendants and their co-conspirators engaged in a continuing combination and conspiracy to rig bids and unlawfully depress the prices of leasehold interests and producing properties within the United States, its territories, and the District of Columbia in violation of Section 1 and 3 of the Sherman Act (15 U.S.C. 1, 3). 40. Defendants and their co-conspirators agreed to, and did in fact, restrain trade or commerce by bid rigging and depressing the prices for leasehold interests and producing properties below competitive levels. 41. In formulating and effectuating their combination or conspiracy, Defendants and their co-conspirators engaged in bid rigging and other anticompetitive activities, the purpose and effect of which were to artificially depress the price of leasehold interests and producing properties. among others: 42. The illegal combination and conspiracy alleged herein had the following effects, a. The prices Defendants paid Plaintiff and members of the Class for leasehold interest and producing properties were artificially depressed below competitive levels; b. Plaintiff and members of the Class have been deprived of free and open competition in sales of their leasehold interests and producing properties; c. Plaintiff and members of the Class have sold their leasehold interests and producing properties for less than they would have had they sold in a competitive marketplace where Defendants combination and conspiracy was absent; d. Competition for the purchase of leasehold interests and producing properties have been restrained. 43. As a direct and proximate result of Defendants conduct, Plaintiff and members of the Class have been injured and damaged in their business and property in an amount to be determined according to proof. Page 12 of 15

13 Case 5:16-cv M Document 1 Filed 03/03/16 Page 13 of 15 PRAYER FOR RELIEF WHEREFORE, Plaintiff prays: A. That the Court determine that this action may be maintained as a class action under Rule 23(a), (b)(2) and (b)(3) of the Federal Rules of Civil Procedure and direct that reasonable notice of this action, as provided by Rule 23(c)(2) of the Federal Rules of Civil Procedure, be given to members of the Class; B. That the Court adjudge and decree that the contract, combination and conspiracy alleged herein is a per se unreasonable restraint of trade in violation of Sections 1 and 3 of the Sherman Act; C. That the Court enter judgment against Defendants, jointly and severally, in favor of Plaintiff and the Class; D. That the Court award Plaintiff and the Class treble damages; E. That the Court award Plaintiff and the Class attorneys fees and costs as well as pre-judgment and post-judgment interest as permitted by law F. That Defendants and their co-conspirators, their respective successors, assigns, parents, subsidiaries, affiliates and transferees, and their respective officers, directors, agents and employees, and all other persons acting or claiming to act on behalf of Defendants or their coconspirators, or in concert with them, be permanently enjoined and restrained from, in any manner, directly or indirectly, continuing, maintaining or renewing the combination, conspiracy, agreement, understanding or concert of action, or adopting any practice, plan, program or design having a similar purpose or affect in restraining competition; and G. That the Court award Plaintiff and the Class such other and further relief as may be deemed necessary and appropriate. triable. DEMAND FOR JURY TRIAL Pursuant to Fed. R. Civ. P. 38(b), Plaintiff requests a jury trial on all matters so Page 13 of 15

14 Case 5:16-cv M Document 1 Filed 03/03/16 Page 14 of 15 Dated Thursday, March 03, Respectfully submitted s/ Douglas D. Wilguess Douglas D. Wilguess, OBA No Heather A. Garrett, OBA No WILGUESS & GARRETT, PLLC One Leadership Square 211 N. Robinson, Suite 1350 Oklahoma City, OK Telephone: (405) Facsimile: (405) wilguess@wgokc.com garrett@wgokc.com Warren T. Burns (Pro Hac Vice to be filed) TX State Bar No Daniel H. Charest (Pro Hac Vice to be filed) TX State Bar No Will Thompson (Pro Hac Vice to be filed) TX State Bar. No BURNS CHAREST LLP 500 North Akard Street, Suite 2810 Dallas, Texas Telephone: (469) Facsimile: (469) wburns@burnscharest.com dcharest@burnscharest.com wthompson@burnscharest.com Isaac Diel (Pro Hac Vice to be filed) SHARP MCQUEEN PA 6900 College Boulevard Suite 285 Overland Park, Kansas Telephone: (913) idiel@sharpmcqueen.com Page 14 of 15

15 Case 5:16-cv M Document 1 Filed 03/03/16 Page 15 of 15 Terrell W. Oxford (Pro Hac Vice to be filed) SUSMAN GODFREY LLP 1000 Louisiana Suite 5100 Houston, Texas Tel: (713) FAX: (713) toxford@susmangodfrey.com William C. Carmody (Pro Hac Vice to be filed) Arun Subramanian (Pro Hac Vice to be filed) SUSMAN GODFREY L.L.P. 560 Lexington Ave., 15 Floor New York, NY Telephone: (212) Facsimile: (212) bcarmody@susmangodfrey.com asubramanian@susmangodfrey.com Larry D. Lahman Michael E. Kelly Carol Hambrick Lahman Mitchell DeClerck MITCHELL DECLERCK 202 West Broadway Avenue Enid, Oklahoma Tel: (800) FAX: (580) Page 15 of 15

16 Case 5:16-cv M Document 1-1 Filed 03/03/16 Page 1 of 8 EXHIBIT 1

17 Case 5:16-cv M 5:16-cr M Document Filed 03/01/16 03/03/16 Page 12 of of 78 IN THE UNITED STATES DISTRICT COURT F~ THE WESTERN DISTRICT OF OKLAHOMA UNITED STATES OF AMERICA, vs. Plaintiff, AUBREY K. McCLENDON Defendant. ) ) ) ) ) ) ) ) ) ) No.: CR Violation: 15 U.S.C. 1 ILE D MAR O 1 2~16 M INDICTMENT The Federal Grand Jury charges: Introduction At all times relevant to this Indictment: I. The defendant, AUBREY K. McCLENDON, was employed by Company A as its Chief Executive Officer, President, and as~ Director until at least March Co-conspirator 1 was employed by Company B as its Chief Executive Officer and Chairman of the Board of Directors until at least March Company A was a corporation organized and existing under the laws of Oklahoma with its principal place of business in Oklahoma City, Oklahoma. Company B was a corporation organized and existing under the laws of Delaware with its principal place of business in Oklahoma City, Oklahoma.

18 Case 5:16-cv M 5:16-cr M Document Filed 03/01/16 03/03/16 Page 23 of of In the business of oil and natural gas exploration and production, companies frequently compete to purchase leasehold interests. A leasehold interest grants a lessee the right to develop the land and to explore for and extract oil and natural gas for a set length of time. Typical oil and natural gas leases span three to five years. If a lessee drills on the land during that time period, the lease is considered "held by production" for as long thereafter as oil and gas or either of them is produced from these lands. 5. In addition to competing for leasehold interests for undeveloped _land, companies also compete to purchase producing properties. Producing properties are tracts of land with one or more wells that are actively producing oil and/or natural gas. A lessee may sell its interest in the producing property, which typically includes both the underlying leasehold interest and the infrastructure, to another oil and gas company. 6. Company A and Company B were engaged in the business of oil and natural gas exploration and production and were actual and potential competitors in the acquisition of leasehold interests and producing properties in northwest Oklahoma, including the leasehold interests and producing properties subject to the charged combination and conspiracy. COUNT 1: Conspiracy to Rig Bids 7. Beginning at least as early as December 2007 and continuing until at least as late as March 2012, the exact dates being unknown to the Grand Jury, in the Western District of Oklahoma, the defendant, AUBREY K. McCLENDON, and his coconspirators knowingly entered into and engaged in a combination and conspiracy to 2

19 Case 5:16-cv M 5:16-cr M Document Filed 03/01/16 03/03/16 Page 34 of of 78 suppress and eliminate competition by rigging bids for certain leasehold interests and producing properties. The combination and conspiracy engaged in by the defendant, AUBREY K. McCLENDON, and his co-conspirators was in unreasonable r~straint of interstate commerce in violation of Section 1 of the Sherman Act ( 15 U.S.C. I). 8. The charged combination and conspiracy consisted of a continuing agreement, understanding, and concert of action among the defendant, AUBREY K. McCLENDON, and his co-conspirators, the substantial terms of which were to suppress the prices that Company A and Company B paid to acquire certain leasehold interests and producing properties in the Western District of Oklahoma by eliminating competition between Company A and Company B for the purchase of these leasehold interests and producing properties. 9. The charged combination and conspiracy began on or about December 27, 2007 when the defendant, AUBREY K. McCLENDON, contacted Co-conspirator 1 and proposed eliminating the head-to-head competition between Company A and Company B for the purchase of certain leaseholds and producing properties in northwest Oklahoma by agreeing not to submit bids for these leaseholds and producing properties in order to keep prices down. The defendant, AUBREY K. McCLENDON, and Co-conspirator 1 agreed that Company B would refrain from submitting bids for these leaseholds and producing properties in order to keep prices down and in exchange for Company B receiving a share of the leaseholds and producing properties purchased by Company A at Company A's cost. 3

20 Case 5:16-cv M 5:16-cr M Document Filed 03/01/16 03/03/16 Page 45 of of The defendant, AUBREY K. McCLENDON, and his co-conspirators continued to rig bids for the purchase of additional leaseholds and producing properties in northwest Oklahoma in a similar manner, as described below, until at least as late as March Various corporations and individuals, not made defendants in this Indictment, participated as co-conspirators in the offense charged herein and performed acts and made statements in furtherance thereof. 12. Whenever in this Indictment reference is made to any act, deed, or transaction of any corporation, the allegation means that the corporation engaged in the act, deed, or transaction by or through its officers, directors, agents, employees, or other representatives while they were actively engaged in the management, direction, control or transaction of its business or affairs. Manner and Means of the Conspiracy 13. For the purpose of forming and carrying out the charged combination and conspiracy, the defendant, AUBREY K. McCLENDON, and his co-conspirators did those things that they combined and conspired to do, including, among other things: (a) engaging in communications concerning certain leasehold interests and producing properties, and the prices therefor, in the Western District of Oklahoma; (b) agreeing during those communications that Company A and Company B would not compete against one another for certain leasehold interests and producing properties in the Western District 4

21 Case 5:16-cv M 5:16-cr M Document Filed 03/01/16 03/03/16 Page 56 of of 78 of Oklahoma either by one company not submitting offers or bids to certain owners of leasehold interests and producing properties, or by one company withdrawing previously submitted offers or bids to certain owners of leasehold interests and producing properties in t:xchange for a share or a subset of the leasehold interests and/or producing properties purchased by the other company at the acquisition cost; ( c) submitting offers or bids, withholding offers or bids,.or acting to withdraw previously submitted offers or bids, to owners of certain leasehold interests and producing properties in the Western District of Oklahoma in accordance with the agreement reached; ( d) acquiring certain leasehold interests and producing properties in the Western District of Oklahoma at collusive and noncompetitive prices and then providing the non-acquiring co-conspirator a share or a subset ofthe leasehold interests and/or producing properties at the acquiring co-conspirator's cost; and ( e) employing measures to keep their conduct secret, including, but not limited to, agreeing not to reveal their anticompetitive agreement to the owners of the leasehold interests and producing properties at issue in this Indictment, and instructing their subordinates to do the same. 5

22 Case 5:16-cv M 5:16-cr M Document Filed 03/01/16 03/03/16 Page 67 of of 78 :rp1de aqd. Commerce, 14. During the period covered by this Indictment, the business activities of defendant, AUBREY K. McCLENDON, and his co-conspirators in connection with the purchases of leasehold interests and producing properties that are the subject of this Indictment were within the continuous and uninterrupted flow of, and substantially affected, interstate trade and commerce, including: (a) entering into and executing transactions for the purchase of leasehold interests and producing properties that include purchasers and sellers from different states; (b) ~ransferring or causing the transfer of substantial sums of money across state lines in connection with purchases of leasehold interests and producing properties; and ( c) selling oil and natural gas in interstate commerce. All pursuant to Title 15, United States Code, Section 1. A TRUE BILL: ~~~ FOREPERSON OF THE GRAND JURY

23 Case 5:16-cv M 5:16-cr M Document Filed 03/01/16 03/03/16 Page 78 of of 78 Assistant Attorney General lijtj~ FRANK\ VONDRAK Chief, Chicago Office.,.. BRE~ Deputy Assistant Attorney General 22~)~ MARVIN N. PRICE, JR.? Director of Criminal Enforcement ;em~~ Assistant Chief STEPHEN D. BOOKER JASON C. TURNER CHESTER C. CHOI Antitrust Division U.S. Department of Justice Attorneys, Antitrust Division U.S. Department of Justice Chicago Office 209 S. LaSalle Street, Suite 600 Chicago, Illinois Tel.: (312)

24 JS 44 (Rev. 12/12) CIVIL COVER SHEET The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is reqmred for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON ND('J' PAGE OF THIS FORM.) I. (a) PLAINTIFFS Brian Thieme Case 5:16-cv M Document 1-2 Filed 03/03/16 Page 1 of 4 (b) County of Residence of First Listed Plaintiff Denver. Colorado (EXCEPT IN US. PLAINTIFF CASES) DEFENDANTS Chesapeake Energy Corp. Chesapeake Exploration. L.L.C. as a successor by merger to Chesapeake Exploration. L.P. Sandridge Energy Corp. Tom L. Ward and John Does 1-50 County of Residence of First Listed Defendant Oklahoma OK (IN U.S. PLAINTIFF CASES ONLY) NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. ( C) Attorneys (Finn Name, Address, and Telephone Number) See attachment Attorneys (If Known) II. BASIS OF JURISDICTION (Placean "X"inOneBoxOnlyJ III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an "X" in One Box/or Plaintiff (For Diversity Cases Only) and One Box for Defenda111) 01 U.S. Government l'ol 3 Federal Question PTF DEF PTF DEF Plaintiff (U.S. Gowmme/11 Not a Party) Citizen of This State O I O I Incorporated or Principal Place O of Business In This State 0 2 U.S. Government 04 Diversity Citizen of Another State Incorporated and Principal Place Defendant (Indicate Citizenship of Parties in Item Ill) of Business In Another State Foreign Nation IV NATURE OF SUIT (Place an "X" m One Box Onlv) I CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY UTHERSTATUTES Insurance PERSONAL INJURY PERSONAL INJURY Drug Related Seizure Appeal 28 USC False Claims Act Marine Airplane Personal Injury ofproperty21 USC Withdrawal State Reapportionment Miller Act Airplane Product Product Liability Other 28 USC 157 )1,141 O Antitrust Negotiable Instrument Liability Health Care/ Banks and Banking Recovery of Overpayment Assaul~ Libel & Pharmaceutical PR verty RIGtt S Commerce & Enforcement of Judgment Slander Personal Injury Copyrights Deportation 0 15 I Medicare Act Federal Employers' Product Liability Patent Racketeer Influenced and Recovery of Defaulted Liability Asbestos Personal Trademark Corrupt Organizations Student Loans Marine Injury Product Consumer Credit (Excludes Veterans) Marine Product Liability.A~,u ""..a' r Cable/Sat TV Recovery of Overpayment Liability PERSONAL PROPERTY 0 7!0 Fair Labor Standards HIA (1395ft) Securities/Commodities/ of Veteran's Benefits Motor Vehicle Other Fraud Act Black Lung (923) Exchange Stockholders' Suits Motor Vehicle Truth in Lending Labor/Management DIWC/DIWW (405(g)) Other Statutory Actions Other Contract Product Liability Other Personal Relations SSID Title XVI Agricultural Acts Contract Product Liability Other Personal Property Damage Railway Labor Act RSI (405(g)) Environmental Matters Franchise Injury Property Damage Family and Medical Freedom oflnformation Personal Injury - Product Liability Leave Act Act Medical Malpractice Other Labor Litigation Arbitration I REAL PROPERTY CIVIL RIGHTS PRISONERJ>ETmONS Employee Retirement FEDERAL TAX SUITS Administrative Procedure Land Condemnation O 440 Other Civil Rights Habeas Corpus: Income Security Act O 870 Taxes (U.S. Plaintiff Act/Review or Appeal of Foreclosure Voting Alien Detainee or Defendant) Agency Decision O 230 Rent Lease & Ejectment Employment Motions to Vacate IRS-Third Party Constitutionality of O 240 Torts to Land Housing/ Sentence 26 USC 7609 State Statutes Tort Product Liability Accommodations General All Other Real Property Amer. w/disabilities Death Penalty IMMIGRATION Employment Other: Naturalization Application Amer. w/disabilities Mandamus & Other Other Immigration Other Civil Rights Actions Education Prison Condition Civil Detainee - Conditions of Confmement V, 0 RIG IN (Place a11 "X" i11 One Box Only) )l( I Original O 2 Removed from Proceeding State Court 0 3 Remanded from Appellate Court 0 4 Reinstated or Reopened 0 5 Transferred from Another District (specify) Cite the U.S. Civil Statute under which you are filing (Do not cite j11risdictional statutes unless diversit)~: VI. CAUSE OF ACTION 1-;'-'~'-e~.;;.d;..;};.:.s~C.;;.ri.;..~t.:..;;"-n.;;.;!.;.;.~~.;;;.a..:;;;~sc.c.:-: VII. REQUESTED IN COMPLAINT: VIII. RELATED CASE(S) IF ANY DATE 03/03/2016 FOR OFFICE USE ONLY Antitrust violation of Section 1 of the Sherman Act IS CHECK IF THIS IS A CLASS ACTION DEMANDS UNDER RULE 23, F.R.Cv.P. (See instn,clions): JUDGE SIGNATURE OF ATTORNEY OF RECORD sf Douglas D. Wilguess 0 6 Multidistrict Litigation CHECK YES only if demanded in complaint: JURY DEMAND: )!;I Yes O No DOCKET NUMBER I RECEIPT# AMOUNT APPL YING IFP JUDGE MAG.JUDGE

25 Case 5:16-cv M Document 1-2 Filed 03/03/16 Page 2 of 4 JS 44 Reverse (Rev. 12/12) INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44 Authority For Civil Cover Sheet The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows: I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. (b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county ofresidence of the "defendant" is the location of the tract ofland involved.) (c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)". II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X" in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below. United States plaintiff. (I) Jurisdiction based on 28 U.S.C and Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box I or 2 should be marked. Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.) III. IV. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party. Nature of Suit. Place an "X" in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than one nature of suit, select the most definitive. V. Origin. Place an "X" in one of the six boxes. Original Proceedings. (1) Cases which originate in the United States district courts. Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section When the petition for removal is granted, check this box. Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date. Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date. Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers. Multidistrict Litigation. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section When this box is checked, do not check (5) above. VI. VII. VIII. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P. Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction. Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases. Date and Attorney Signature. Date and sign the civil cover sheet.

26 Case 5:16-cv M Document 1-2 Filed 03/03/16 Page 3 of 4 Douglas D. Wilguess, OBA No Heather A. Garrett, OBA No WILGUESS & GARRETT, PLLC One Leadership Square 211 N. Robinson, Suite 1350 Oklahoma City, OK Telephone: (405) Facsimile: (405) Warren T. Burns Daniel H. Charest Will Thompson BURNS CHAREST LLP 500 North Akard Street, Suite 2810 Dallas, Texas Telephone: (469) Facsimile: ( 469) Isaac Diel SHARP MCQUEEN PA 6900 College Boulevard Suite 285 Overland Park, Kansas P: (913) Terrell W. Oxford SUSMAN GODFREY LLP 1000 Louisiana Suite 5100 Houston, Texas Tel: (713) FAX: (713) toxford@susmangodfrey.com William C. Carmody Arun Subramanian SUSMAN GODFREY L.L.P. 560 Lexington Ave., 15 Floor New York, NY Telephone: (212) Facsimile: (212) bcarmody@susmangodfrey.com asubramanian@susmangodfrey.com Larry D. Lahman Michael E. Kelly Carol Hambrick Lahman ATTACHMENT

27 Case 5:16-cv M Document 1-2 Filed 03/03/16 Page 4 of 4 Mitchell DeClerck MITCHELL DECLERCK 202 West Broadway Avenue Enid, Oklahoma Tel: (800) FAX: (580)