Chesapeake Backs Down, Will Not Make PA Landowners Near Pittsburgh Return Royalty Checks

Late last year, Chesapeake Energy asked landowners in Donora and Carroll, PA (near Pittsburgh) who had received royalty checks from Chesapeake, to give the money back.

Chesapeake, which has the Marcellus shale drilling rights in the Donora and Carroll areas, claimed in late October that “mechanical difficulties” forced the company to curtail part of its original plans.

As a result of those problems, Chesapeake informed residents in a 595-acre tract of land in the “Pine Oaks Unit” that they were not entitled to royalty checks that were sent to them during the year.

Chesapeake sent letters to the residents seeking repayment of the royalty and demanding the money be returned by Dec. 31, 2010.*

The landowners who were affected banded together and threatened a class-action lawsuit. With the help of local political officials, and the threat of a lawsuit, Chesapeake backed down and now says the Pine Oaks landowners will not have to repay the royalty money they had received “in error.”

*Pittsburgh Tribute-Review (Jan 29) – Donora, Carroll residents can keep gas royalties