Oklahoma City’s Chesapeake Energy has been hit again with a lawsuit charging irregularities in contracts covering royalties of hundreds of wells around Fort Worth, Texas. And the law firm that filed the suit is the same one that sued Chesapeake more than four months ago, accusing it of conspiring to rig bids for leases in Oklahoma.
This time, more than 30 business entities and individuals filed suit claiming the company structure a series of contracts in order to get excessive fees and other charges after the 2009 sale of its Barnett Shale midstream assets. The suit accused Chesapeake of structuring to charge unreasonable fees on royalties from its $588 million sale of assets to New York hedge fund Global Infrastructure Partners. Part of the sale was an exclusive 20-year production commitment related to Chesapeake’s Barnett Shale midstream gathering assets. The lawsuit also challenged Chesapeake’s transportation fees and net royalty interest calculations.
The suit involves more than 750 producing gas wells in Tarrant, Johnson and Ellis counties and oil and gas leases covering more than 5,400 mineral acres.
One of the entities that filed suit in Dallas District court, (Addax Mineral Funds, et al. v. Chesapeake Operating LLC, suit No. DC-16-07867), was Fort Worth’s Kimbell Art Foundation.
“Chesapeake structured its midstream asset sale and transportation agreements in such a way that the lessors and royalty owners bore unreasonable cost,” claimed Daniel Charest, an attorney with Burns Charest LLP of Dallas who represents the plaintiffs. “My clients only want a fair price for their royalty production. That’s what this case is about.”
It was early March when Burns Charest represented Brian Thieme in a lawsuit against Chesapeake Energy Corp., Chesapeake Exploration LLC, SandRidge energy Corporation, Tom Ward and other unnamed John Doe defendants in Oklahoma City federal court. The suit was filed after the federal indictment of former Chesapeake co-founder Aubrey McClendon who died in a traffic crash a day after his indictment by an Oklahoma City federal grand jury.
The lawsuit alleged that the lease fraud started in 2011 when Chesapeake purchased a leasehold interest in Thieme’s mineral estate.