A $30 million settlement offer is being made by Oklahoma City-based Chesapeake Energy to landowners in federal lawsuits in Pennsylvania.
The lawsuits were filed in a fight over gas-royalty payments. Despite the settlement, Pennsylvania Attorney General Josh Shaprio says it really depends on bringing an end to a separate lawsuit against the Oklahoma company according to The Philadelphia Inquirer.
Lawyers for Chesapeake told a federal judge in Scranton this month they had reached a settlement with several of the class-action suits. The deal would provide payments to all 14,000 Chesapeake gas leaseholders. In addition, the agreement would allow the landowners to “reset” their leases to clarify the terms on which they are paid royalties.
However, there is an “if” in the deal and Chesapeake won’t move forward with the settlements until a lawsuit filed against the company by former Pennsylvania Attorney General Kathleen G. Kane in 2015 is resolved. She sued claiming Chesapeake had cheated landowners by making big deductions from their royalties.
The Pennsylvania Attorney General’s office reportedly told U.S. District Judge Malachy E. Mannion it is still far apart with Chesapeake in the negotiations.
“At this point in time, our major divide is on money,” said Joseph S. Betsko, a senior deputy attorney general. The judge ordered both sides to get back to work in their negotiations.
“We all know, I will tell you, that these cases are going to resolve, and they aren’t going to go to trial,” said the judge. “It’s going to be a question of whether or not we spend significant amounts of money and time, or whether we kind of get on the real-life practical train on both sides and find a way to get to the end.”
At the heart of the lawsuits by the landowners lay the price of deducting post-production costs from the royalties. Chesapeake is the state’s largest producer and has been described as “most aggressive” about billing landowners for costs.