| | | | |

Is Chesapeake Robbing Graves in OH Village…or Getting Robbed?

grave robberWe can see the headlines now: Chesapeake Energy is a (Gas) Grave Robber! Wait until the anti-drillers get hold of this story… Chesapeake has struck a deal with the Village of Salineville (Columbiana County), OH to lease and drill under 17 acres at the Woodland Cemetery. The deal stipulates no surface disturbance of any kind (a very good idea).

But who is robbing whom? Listen to the deal the village got: Chesapeake is paying Salineville $44,145 annually for five years, plus 15% royalties. The annual payments add up to $220,725, or if you think of it as a signing bonus stretched over 5 years, it’s $12,984 per acre. Wow!! That’s perhaps the highest per acre signing bonus we’ve heard of in the entire Marcellus or Utica Shale. Kudos to the Salineville board members who suckered negotiated the deal with Chesapeake…
Continue reading

| | | | | | |

Chesapeake to Release 12K Acres of NY Leases Next Week

About a month ago, MDN told you that Chesapeake has decided to end their fight with New York landowners over extending their leases (see Chesapeake Energy Throws in the Towel on NY Shale Drilling). Although it’s taken the past month to iron out the paperwork, it seems that Chesapeake (and NY landowners) will finalize and sign an agreement “sometime next week” to release 12,000 acres of leases in Broome and Tioga counties.

Chesapeake walking away from these leases is bittersweet. Sweet because it releases landowners from old leases signed before fracking was even contemplated, allowing them to re-sign a new lease with better terms. Bitter because it indicates Chesapeake is unwilling to put up with Gov. Andrew “Ditherer” Cuomo any longer as he agonizes over whether he will or whether he won’t allow fracking…
Continue reading

| | | | | |

Chesapeake Settles PA Royalty Lawsuit for Pittance: $7.5M

a pittanceIn July, MDN told you about a class action lawsuit by some Pennsylvania landowners against Chesapeake Energy over the issue of deducting certain costs from post-production when calculating royalties–costs that the landowners say are not listed in the original lease and for which Chessy does not have the right to deduct (see Some PA Landowners Mull Decision to Sue Chesapeake over Royalties). A number of landowners joined the class action lawsuit. The lawyers worked feverishly and both sides have now settled.

Chesapeake will pay $7.5 million to settle the lawsuit, to be share with the lawyers (of course) and then amongst the landowners. Apparently the settlement will benefit “several thousand leaseholders” who have the option to either accept the settlement or continue on their own by filing their own lawsuit…
Continue reading

| | | | |

Marcellus Shale Coalition Gets New Chairman of the Board

It appears that Chesapeake CEO Doug Lawler’s massive firings throughout the company (no doubt demanded by corporate raider and Chessy board member Carl Ichan) have not only affected Chesapeake itself, but also the Marcellus Shale Coalition (MSC)–the premier group representing the drilling industry in Pennsylvania and the entire Marcellus region.

The chairman of the board of directors at the MSC had been David Spigelmyer, VP of government relations for Chesapeake. Spigelmyer is now gone from Chesapeake and gone from the board of the MSC. In his place, the board has appointed the current vice chairman, Randy Albert, COO of CNX Gas, to be chairman until Spigelmyer’s term was due to end in November…
Continue reading

| | | | | | | | | | | | |

Who’s Who in OH Utica Shale Drilling for 2013

Who's WhoInvestor’s website Market Realist ran a 7-part series on the Utica Shale yesterday–really good stuff. As part of that series they list the biggest drillers/leaseholders in the Ohio Utica Shale. It’s a very useful rundown and update on the latest positions held by the major players of the Utica. We’ve pulled and condensed from their article to give you the latest rundown on who’s who in the Ohio Utica Shale…
Continue reading

| | | | |

New Case of Earthquakes Related to an Injection Well in WV?

One of the gross inaccuracies MDN has tried to address over the past several years is the claim that “fracking causes earthquakes.” It does not. At least not measurable earthquakes people can feel at the surface. No less a source than the National Academies of Science released a study last year to “finally” put that particular myth to rest (see NRC Study: Fracking Does Not Cause Earthquakes). Unfortunately the earthquake myth is just too good a PR opportunity to pass up, so anti-drillers haul it back out about every three months for a new round of exposure.

The earthquake issue is confusing for many people because there is a loose connection between earthquakes and fracking: injection wells. Although most fracking wastewater is now recycled to be used again for more drilling, some of it is disposed of via deep injection wells. If an injection well happens to be located near a geologic fault, the pressure from the injected fluid has the potential to trigger an earthquake. It happened in Youngstown, OH in late 2011/early 2012 (see ODNR Finds Youngstown Injection Well Caused Earthquakes). According to a recent report from WV Public Broadcasting, it may now be happening again near a Chesapeake-owned injection well in Braxton County, WV…
Continue reading

|

Corporate Raider Carl Ichan Ups Stake in Chesapeake – Again

Corporate raider Carl Icahn–a man who buys up stock in companies so he can lay people off and resell his stock at a profit–has increased his stake in Chesapeake Energy by a full percentage point–to 9.98%. Man we’d hate to have him lurking on our board. It’s likely no coincidence that Chesapeake has just laid off a number of its public relations staff in Ohio and Pennsylvania. Thanks Carl!…
Continue reading

| | | |

He’s Baaaack! Aubrey McClendon is Back in OH Shale Country

Aubrey McClendonAfter being unceremoniously tossed out of the door at Chesapeake Energy (the company he founded) by corporate raider Carl Icahn, Aubrey McClendon is, according to the Columbus Dispatch and Upstream magazine, back and active in the Utica Shale with his new company American Energy Partners.

There are four VERY interesting, juicy tidbits in the story about Aubrey’s return to the Utica…
Continue reading

| | | |

Chesapeake Short-Changes PA Landowner on Royalty Checks

MDN has brought you a couple of stories in recent weeks about landowners suing Chesapeake Energy over royalty checks, claiming Chesapeake is playing fast and loose with post-production expenses (see Bradford County, PA Landowners Sue Chesapeake over Royalties). A new Chesapeake royalty story (below) appears on the ProPublica website. It opens with a poignant tale of yet another landowner who was apparently screwed by Chesapeake with respect to royalties. It’s maddening.

However, we have to put the story in proper perspective. ProPublica is anti-drilling through and through. They have an agenda and that agenda is to make all drillers and anyone/anything connected to fossil fuels look bad, so as you read the story below, keep that in mind. Still, if even 10% of what is reported below is true, it’s disturbing. More than ever, it’s vital that landowners have a detailed, well-spelled-out lease that’s been reviewed and tweaked by a lawyer who knows oil and gas contracts inside and out. It’s also important to monitor every royalty statement…
Continue reading

|

Chesapeake Energy: What Goes Around Comes Around

MDN has chronicled the messy firing of Chesapeake Energy’s founder and “controversial” leader Aubrey McClendon. We also told you about three of his long-time “friends” who were paid $15.4 million to stick around after corporate raider Carl Icahn got his way and had Aubrey fired (see Chesapeake Pays $15.4M to Prevent Exodus of Top Talent). Two of the three well-bonused “friends” have now received their own pink slips from Chesapeake. Steve Dixon, who was COO and acting CEO after Aubrey left, and Martha Burger, head of HR at the company, have been sent packing by Chesapeake’s new CEO Doug Lawler. No word on whether they get the full payout bonus which was due to be granted over the span of three years–in 2016, 2017 and 2018.

One Aubrey “friend” remains at Chesapeake: CFO Dom Dell’Osso…
Continue reading

| | | | | |

Bradford County, PA Landowners Sue Chesapeake over Royalties

About a month ago, MDN told you that a couple of Scranton-area lawyers were looking for landowners with Chesapeake Energy leases who believe they’re getting the short end of the royalty stick, to participate in a class action lawsuit against Chessy (see Some PA Landowners Mull Decision to Sue Chesapeake over Royalties). At issue is how royalties are calculated–what is considered to be a post-production cost. Some landowners say Chessy is claiming too many expenses and in the process shorting payments to them.

Some landowners in Bradford County, PA have decided to join the lawsuit:
Continue reading

| | | | | | |

Chesapeake’s Current Thinking on their Utica Shale Program

At a meeting in Mahoning County, OH, a Chesapeake Energy representative tackled the question of how long Ohio residents will see drilling in their midst. The rep then spoke about the next phase after drilling–production and piping product to market. The answers given were not anything we haven’t heard before. Still, some of the Chesapeake rep’s comments did give us insight into the company’s current thinking about the Utica Shale and the counties where they intend to concentrate their efforts…
Continue reading

| | | | | | | | |

Chesapeake Energy Throws in the Towel on NY Shale Drilling

throw in the towelA good news/bad news story. The good news is that Chesapeake Energy is giving up the legal fight with landowners in New York to extend their leases beyond the original lease term. MDN has long chronicled the fight on the part of landowners to stop Chesapeake from claiming force majeure to extend leases signed for (in some cases) just a few dollars per acre–leases signed long before horizontal drilling and fracking were contemplated (see More on the NY Force Majeure Ruling Against Chesapeake). After two years of legal wrangling, Chesapeake is throwing in the towel. Landowners will now be able to sign with another company, if drilling ever comes to NY.

The bad news is, Chesapeake is throwing in the towel–as in they are giving up on NY–tired of the ongoing five-year moratorium in shale drilling. Wake up Cuomo! Your actions have caused this! You are causing direct economic harm to your residents every day the moratorium stays in place…
Continue reading

| | | |

The Marcellus Continues to be Star Performer for Chesapeake

Different media outlets have analyzed the comments made last Thursday by Chesapeake Energy officials, looking for Chessy’s “take” on their particular region. A newspaper in West Virginia published the report below that looks at Chessy’s update on the Marcellus Shale in the southwestern corner of the play–otherwise known as the “wet gas” area. Bottom line: Although everyone continues to focus on the Chesapeake’s love affair with the Utica Shale, the Marcellus Shale is the play actually contributing to the company’s bottom line–in a big way. The Marcellus is helping turn around the good ship Chesapeake.

Of particular interest to MDN in this brief article is a short paragraph that mentions the signing bonus/royalty deals landowners in the Upper Ohio Valley have recently landed with Chesapeake and other drillers–some of the highest bonus and lease terms we’ve seen to date in the Marcellus…
Continue reading

| | | | | | | |

Spectra’s OH Pipeline Project Advances, Sept 20 Deadline w/FERC

More than 1 1/2 years ago MDN told you about a planned new 70-mile pipeline and compressor station to connect Utica and Marcellus wells in eastern Ohio to Spectra Energy’s Texas Eastern pipeline system (see Chesapeake Investing in New 70-Mile Ohio Pipeline). Called the Ohio Pipeline Energy Network (OPEN), the project is a $500 million joint venture between Chesapeake Energy, American Electric Power and Spectra Energy. Not since December 2011 have we heard any news about the project–until now.

Even though there’s been no media coverage, Spectra has been hard at work planning and holding public meetings for feedback on eight different proposed pipeline routes. The Federal Energy Regulatory Commission (FERC) has given Spectra until Sept. 20 to tell them which alternative is their preferred route. FERC will then make a decision and (presumably) issue a permit that will allow Spectra to begin construction. An update on the OPEN project…
Continue reading