Chesapeake Energy to pay $119M in Oklahoma royalty case

Chesapeake Energy to pay $119M in Oklahoma royalty case

Jan 26 2015, 17:13 ET | About: Chesapeake Energy Corporation (CHK) | By: Carl Surran, SA News Editor 
  • Chesapeake Energy (NYSE:CHK) agrees to pay $119M under a preliminary settlement with Oklahoma mineral rights owners who accused the company of improper royalty payments dating back to 2004.
  • Landowners accused CHK of improperly withholding royalty money and charging them for the costs of processing and transporting gas; the class action lawsuit affects more than 11,800 wells in Oklahoma.
  • CHK has faced similar lawsuits in Pennsylvania and other places where it operates.

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Permalink Reply by Sherre Boyanowski on February 1, 2015 at 5:51am

We went together in a large group and found a lady from Colorado.  There is a Lee Perry from TX that we met and there is a group called MartiCons that also do oil and gas audits. Lee Perry wrote a book called 'The Good Ole Boys of Oil and Gas'. A very good read. This is why I say that a regular accountant can not do this. It must be someone who understands the oil & gas business inside and out. They are the ones that will ferret out where things are being hidden in the company books. It is more than simple math. We are awaiting the completion of the audit now. Due to the fact that we had to sign a confidentially paper, we can not disclose anything she has found for us. Let me just say that it has been a very eye opening experience.  Next step is to wait to see what Chesapeake will do once they receive the report. 

Gather a group of you that have the same lease, or all of you in the same unit. This will bring the cost of the audit to where it is very affordable. 

This is the first step to take. This advice was given to me from somebody in the industry that I trust. 

Permalink Reply by Alan Bowers on February 2, 2015 at 5:30am

Sherre,

Does that Confidentiality Agreement that you signed with the auditor, "a lady from Colorado", prevent and/or prohibit you from using what is discovered from the audit in court?

When you use the data in open Court the information becomes public domain. 

When you hire an Accounting Firm to do a Forensic Audit of a Company that you do business with it is usually because you suspect foul play.  Intent to use the data and results of the audit in court would be implied.

So, why would an Accounting Firm require a confidentiality agreement and what is the point of an Accounting Firm's confidentiality agreement?

Doing the Audit is a really good next step in the process and the information gained by the Audit should help in making your case against CHK.

Permalink Reply by Sherre Boyanowski on February 2, 2015 at 1:16pm

Alan, It was Chesapeake that INSISTED we sign the confidentiality agreement.  We were sure there was foul play, and this was the first step to prove it. When the audit is completed, the findings will be sent to Chesapeake. We will then wait for their response to see if we need to take further steps. That may mean court. How the audit plays out in court, I do not know yet.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on February 2, 2015 at 5:25am

Sherre,

      I have a Chesapeake Spreadsheet from Buck Well 1H that they sent me. It has all their secrets in column format with all the theft.

Do you want a copy to use in your audit? The auditors can just ask for that same spreadsheet for your well, it tells the whole story with 3 columns of deductions and CHK handing over the well products to CHK Marketing Inc, definitely not an Arms Length Transaction as required by ALOV leases.

Permalink Reply by Sherre Boyanowski on February 2, 2015 at 1:17pm

Sure, I can pass it on to her.

Permalink Reply by Sherre Boyanowski on February 28, 2015 at 6:11am

Matthew,     Join NARO and come to the convention in State College in March. On the schedule is a panel discussion moderated by Les Greevy with Dan McDonald, Robert Burnett, Taunya Rosenboom, and Michelle O'Brian. Should get the download on all of their lawsuits and approaches to get your money back from Chesapeake. Could be some sparks and fireworks. The down side is that they have slated only 2 hours for the discussion and Q&A.  

     McDonald will be back in the area again Mar 9-12. I plan on being at the Legion in Black Walnut 6PM on 3/11. I would love to meet up with you there. I am curious to hear what he is going to do now. Someone told me that a judge in OK told him he is not allowed to talk to the recipients of this law suit. I guess he was telling them to opt out and go with him. This is only hearsay and I need to find out the facts for sure before 3/11.  If you hear anything, let me know.

Permalink Reply by Tree Farmer on January 31, 2015 at 2:34pm

A $5 billion dollar class action lawsuit has been filed by Pennsylvania landowners against Chesapeake Energy Corp. and its subsidiary, Access Midstream Partners, over gas and oil royalties they feel they were robbed of through fees charged by Chesapeake.

The suit was filed earlier this summer in the U.S. District Court for the Middle District of Pennsylvania.

The Suessenbach Family Limited Partnership is the lead plaintiff and allege the defendants used racketeering, unjust enrichment, mail fraud, wire fraud, honest service fraud, conversion and civil conspiracy in their business practices related to royalty payments.

Permalink Reply by Denise Rouse on February 1, 2015 at 9:45am

Where are they with this suit?  Since I am from Pennsylvania I am interested in the direction I should take.  Should I be making inquires directly to the Suessenbach Family LLC?

Permalink Reply by Alan Bowers on February 2, 2015 at 5:58am

Access Midstream Partners has a stock split coming up:

Company (Click for Company Information) Symbol Split Ratio Announcement Date Record Date Ex-Date
Access Midstream Partners, L.P.
Opens in new window. Company Website
 ACMP 1:1.06152 1/9/2015 1/30/2015 2/3/2015
Permalink Reply by Alan Bowers on February 2, 2015 at 6:02am

Access Midstream also has a dividend about to pay out:

ACMP ex-Dividend for $0.85 on 2/5/2015

  • Announce Date: 1/26/2015
  • Record Date: 2/9/2015
  • Pay Date: 2/13/2015
Permalink Reply by Alan Bowers on February 2, 2015 at 6:04am

Access Midstream Partners also just announced (11:05hrs EST, 2015-02-02) the closing of the merger with Williams Partners.

Permalink Reply by frank speaker on February 1, 2015 at 8:08am

How about legislation which allows for triple damages plus cancellation of the lease if a company is found guilty of  excess charges, etc.

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