Civil War: Bradford PA Escalates Fight with MSC re Royalty Bill
Yesterday MDN reported that Wilmot Township, located in one of the most-drilled counties in Pennsylvania (Bradford County) has taken the unusual step of demanding that drillers (in particular Chesapeake Energy) stop flowing natural gas from drilled wells unless/until they start paying landowners a minimum 12.5% royalty for the gas produced (see Righteous Royalty Anger: PA Town Votes to Block Gas Production). In August MDN reported that at the county level in Bradford County, the same issue has turned personal and somewhat nasty–with Bradford County Commissioners chairman Doug McLinko (a big pro-gas guy) blaming the Marcellus Shale Coalition and its leader David Spigelmyer for blocking a vote on House Bill (HB) 1391 that would rectify the royalty issue (see PA Landowners, Drillers Fight over HB 1391 Minimum Royalty Bill). McLinko called Spigelmyer a “reverse Robin Hood” last month. The fight continues and now escalates. Today, McLinko and the other commissioners in Bradford are set to vote on hiring a public relations firm to produce several short videos so the county can use those videos in a state and national PR campaign. McLinko says the MSC’s lobbying against royalty reform has cost Bradford County “probably $100 million” and the new campaign aims to get HB 1391, or something like it, passed…
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In April 2015 Kinder Morgan’s Tennessee Gas Pipeline (TGP) subsidiary filed an application with the Federal Energy Regulatory Commission (FERC) to build 8.2 miles of new looping pipeline in Tioga County, PA and beef up two compressor stations in Bradford County, PA. The $142 million project is called the Susquehanna West Project. The project will increase capacity along a section of the TGP, bumping it up by 145 million cubic feet per day (Mmcf/d). All of the extra capacity is spoken for by Statoil and the wells they’ve drilled in NEPA. Good news: On Tuesday FERC issued their approval for the project, which means construction will begin in January 2017…
Residents in Wilmot Township (Bradford County), PA are mad as hell over shorted royalty checks–and they aren’t taking it anymore. Yesterday Wilmot Township’s three supervisors passed a resolution demanding, “production be discontinued from wells where landowners are having their royalty checks diminished to nothing or nearly nothing.” That is, they want to block natural gas production from existing shale wells drilled in a town smack in the middle of one of the most-drilled places in Pennsylvania. We’ve long chronicled the fight between landowners and some (certainly not all) drillers who are screwing them out of royalty payments by claiming inflated post-production costs. The issue first came to prominence with claims by landowners signed with Chesapeake Energy, who claimed Chessy had cut a sweetheart deal with its former midstream company (Access Midstream) whereby Access bumped up its charges for piping gas which Chesapeake claimed as an expense and deducted from royalty checks, and then Access turned around and invested big money into the old mothership company (see 
A landowner couple in Bradford County, PA, Edward and Kathleen Ostroski, filed a royalty lawsuit against Chesapeake Energy claiming Chesapeake was screwing them out of money by conducting “creative” accounting and deducting expenses that shouldn’t be deducted. Seems like there’s hardly a state where Chessy drills where someone has not filed a similar lawsuit against the company. However, in the Ostroski case, the couple claimed (or rather, their lawyers claimed) the case should be a class action. That there are in fact some 2,000 other landowners similarly affected by Chesapeake’s actions. A U.S. Middle District judge ruled on Monday that the Ostroskis may pursue their case–but only for themselves. There will be no class action. If other landowners feel cheated, they will have to bring their own lawsuits against the company…
In August 2013, Moxie Energy of Vienna, VA sold the permits/rights to build a new Marcellus gas-powered electric generating plant in Bradford County, PA to Panda Power Funds of Dallas, TX (see 
Last December Pennsylvania’s felony-indicted Attorney General, Kathleen Kane, brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
MDN first told you about IMG Midstream in August 2014 (see 
Last December Pennsylvania’s felony-indicted Attorney General, Kathleen Kane, brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
This is something you don’t see often these days: The Pennsylvania Game Commission is getting $15.5 million of revenue from new Marcellus leases with Chief Oil & Gas and EQT. The bulk of the money will come from a deal with Chief to lease 5,870 acres in Bradford and Sullivan counties. Terms of the lease? Chief is paying $2,500 per acre as a signing bonus and 20.55% in royalties when/if they drill and the gas and oil begin to flow. It just about floored us to see this deal! We though all deals were done until the price of gas goes up again. We’d not heard of any new deals being cut. As for EQT, they are paying the Game Commission $917,000 for the right to drill under a 306-acre parcel in Washington County, PA. Details on the per acre bonus and royalty for the EQT deal below…
Pennsylvania Attorney General Kathleen Kane, who has been indicted on numerous felony charges and likely to be forced from office any day now, filed a lawsuit yesterday against Chesapeake Energy in Bradford County Court over the issue of shorting landowners out of royalties. What every story we’ve seen (thus far) misses is this: The lawsuit also names Williams as participating in the scheme to defraud landowners out of royalty payments. So this is not just a Chesapeake story, it’s a Williams story too. Landowner groups are “hailing” the decision, jumping up and down with glee. Let us throw a little cold water on your face. Note to landowners and the groups that represent them: When you (metaphorically) crawl into bed with Kathleen Kane, you’re crawling into bed with a rattlesnake. Sooner or later she’s going to turn on you too. Mark it down. It’s in her nature. With that disclaimer in place, we’ll break down the news for you, and show you a copy of the lawsuit Kane’s office filed yesterday…