Chesapeake Reaches $51 million Settlement of Hundreds of Royalty Lawsuits in Fort Worth

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Oklahoma City’s Chesapeake Energy has agreed to pay nearly $51 million to settle hundreds of lawsuits filed over royalty fights around Fort Worth, Texas. The company had been accused of cheating property owners out of millions of dollars in natural gas royalties.

Attorneys at a Fort Worth law firm announced this week that 91 percent of their 13,000 clients had agreed to accept the out-of-court settlement, according to the Fort Worth Star-Telegram. The settlement involved nearly 400 lawsuits.

The paper said the 91 percent represented more than 97 percent of the natural gas production of the wells in question in north Texas. It also reported the maximum payout of $52.5 million was prorated down to match the amount of gas production that backed the deal reached in May.

Chesapeake had been accused of deducting higher-than-necessary postproduction costs from the royalty checks. The lawsuits called it ‘sham sales’ by Chesapeake so it could increase its earnings. Chesapeake denied it and now has to deposit $41.3 million in the bank by Monday. Its partner in the Barnett shale, total E & P USA Inc. will have to cough up $12.8 million as part of its share.

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