Encana clears itself of collusion in Michigan

* Says did not collude in Michigan land sales

* Declines to release details of internal investigation

* Has been subpoenaed by Dept of Justice

CALGARY, Alberta, Sept 5 (Reuters) - Encana Corp said on Wednesday an internal investigation has determined that it did not collude with Chesapeake Energy Corp to lower the price of exploration lands in Michigan two years ago.

The company, Canada's largest natural gas producer, also confirmed it has been served with a subpoena from the Antitrust Division of the U.S. Department of Justice and a civil investigatory demand from the Michigan Attorney General related to the allegations of collusion.

It said it will fully cooperate with the two agencies.

In June, Reuters reported that Chesapeake plotted with Encana to suppress land prices in the Collingwood shale in Northern Michigan.

Emails between Chesapeake and Encana showed the two companies repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners.

The company said an internal investigation headed by David O'Brien, the chair of Encana's board of directors, concluded that it did not engage in collusion.

In a release, the company said its internal review was assisted by outside legal counsel and was independent of Encana's management. However, the company declined to say how it reached its conclusions and will not release its report.

"We can't offer more detail than what we've released as the issue is still under investigation by the Antitrust Division of the Department of Justice and the Michigan Attorney General," Encana spokesman Jay Averill said in an email.

Encana shares fell 21 Canadian cents to C$21.36 on the Toronto Stock Exchange on Wednesday.