While recently settling a few lawsuits on claims of royalty payments, Oklahoma City-based Chesapeake Energy is also right in the middle of similar problems in Pennsylvania. It was there recently that Attorney General Kathleen Kane filed suit and as a result stopped $11 million in settlements by Chesapeake Energy and others with royalty owners who filed suit last year, contending that the company wrongly withheld post-production costs out of the royalties. A judge had approved the settlements involving nearly 50 residents five months ago but Kane filed suit claiming Chesapeake had violated the Unfair Trade Practices and Consumer Protection Law. Chesapeake responded by calling the lawsuit claims “factually false, unsupported and legally deficient.”
The first criticism of Chesapeake surfaced in 2012 when land owners noticed a drop in royalty payment then charged that Chesapeake’s deductions were improper. Chesapeake deniedthe claims but reached a 2013 settlement for $7.5 million with leaseholders. The pool of money was subsequently increased to $11 million.
