Chesapeake Settles NEPA Royalty Lawsuit for Pennies on the Dollar

Chesapeake Energy has, according to the Pittsburgh Post-Gazette, “reached a $7.75 million settlement agreement with about two-thirds of its Pennsylvania natural gas royalty owners.” At the end of last year Chesapeake Energy offered a $30 million deal to Pennsylvania landowners to settle claims the company had screwed them out of royalty money by artificially inflating post-production costs in an elaborate scheme to pocket more money at landowners’ expense (see Chesapeake Agrees to $30M Royalty Settlement for PA Landowners). Chesapeake’s proposed deal last year would have given the average PA leaseholder (some 14,000 of them) a one-time $2,140 payment–adjusted up or down for the size of their acreage. This new deal, for 10,000 of the same leaseholders, offers $7.75 million–an average of $775 per landowner. Which is piddly. It’s nothing. An insult. Last year Chesapeake’s deal with leaseholders required the state Attorney General’s office, which has an ongoing, separate lawsuit filed against Chesapeake over the same issue, to settle as well. The AG’s office refused (see PA AG Not Backing Down re Chesapeake Energy Royalty Lawsuit). In fact, the AG’s office is still refusing to settle, with this new deal. Yet now Chesapeake is willing to move forward without the AG as part of the settlement. Heck yeah! Convince these desperate folks to take, literally, pennies on the dollar. What company wouldn’t go for that deal? Any way you slice this, northeast PA landowners are getting screwed if they agree to Chesapeake’s deal. They get a maximum of 8% back of the inflated “costs” Chesapeake originally deducted from royalty checks. We suppose some will say 8% now is better than maybe nothing or very little years from now. We don’t see it. We see these good landowners getting shafted in this deal…

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