Chesapeake Energy agreed to settle
a class action lawsuit that alleged that Chesapeake breached its contracts with
leaseholders and its implied duty to pay the proper royalty amount to leaseholders.
The Plaintiffs, Pennsylvania leaseholders with leases containing "Market
Enhancement Clauses," had alleged that Chesapeake improperly deducted "post-wellhead"
costs from their royalty payments and that the gas was sold in an
"unmarketable condition" to Chesapeake's affiliates and third parties,
which breached Chesapeake's duty to sell the gas at the higher "marketable
condition" rate and reduced the Plaintiff's royalty. Chesapeake denied all of the allegations. While U.S. District Court Judge Malachy
Mannion must approve of the settlement before it takes effect, Governor Tom
Corbett issued a statement on September 4, 2013, stating that he was
"pleased with the proposed settlement" and that the "settlement
is a significant step forward in protecting the interests of Pennsylvania
landowners."
For more information on this
settlement and Governor Corbett's statement, see: https://stateimpact.npr.org/pennsylvania/2013/09/03/chesapeake-energy-agrees-to-pay-7-5-million-to-settle-royalty-lawsuit/
The Plaintiff's complaint and Chesapeake's
answer may be found at the U.S. District Court for the Middle District of
Pennsylvania, Docket No.: 3:13-cv-02289-MEM
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