I just posted this on the general board but wanted to hit this one as well.

Does anyone know anything about this?

And now from bad to worse: a company that owns royalty rights in PA, Scout Petroleum, claims they’ve been screwed out of royalties by Chesapeake and has asked a judge for a full refund and to force Chesapeake into arbitration and grant class-action status to the whole, festering mess…

A company that has interests in Marcellus Shale natural gas leases wants an arbitration panel to order a full refund for what it alleges have been improper deductions from royalty payments by Chesapeake Appalachia.

Scout Petroleum of Nicholson has asked the American Arbitration Association to declare its demand a class action to include all those who have entered into what are known as paid-up oil and gas leases.

Chesapeake, a wholly-owned subsidiary of Chesapeake Energy, Monday filed in U.S. Middle District Court a request for an injunction to prevent class-action status it claims could involve thousands of landowners.

It contends leases do not provide for class-action arbitration and further argues only a judge can approve such a status.

Besides class action and refund demands, Scout, whose interests primarily are in Bradford, Sullivan, Susquehanna and Wyoming counties, is seeking a declaration Chesapeake has breached its leases.

The filings are the latest in the controversy involving the 1979 Guaranteed Minimum Royalty Act that states leaseholders are to receive a minimum of 12.5 percent of the sale price of the gas produced.

One Bradford County farmer reported receiving royalty checks for as little as $1.10 and 10 cents.

Chesapeake has been accused of taking deductions not permitted by the law or leases. Scout alleges, for example, Chesapeake reduces the volume on which royalties are paid by deducting gas used by compressors.

Attorney General Kathleen Kane last month told state Sen. Gene Yaw, R-Lycoming, her office was reviewing complaints that property owners are not getting their entitled royalties.

Gov. Tom Corbett has written Chesapeake President Robert D. Lawler telling him he had received complaints about practices that “strike many as unfair and perhaps illegal.”

On Monday, the state Senate approved three bills introduced by Yaw aimed at expanding the rights of landowners with natural gas leases.

One bill would allow inspection of natural gas companies’ records to verify proper royalty payments. It also would require payments to begin within 60 days of a well going into production.

The second measure would prohibit a gas company from retaliating, by terminating a lease or ceasing development because the accuracy of royalty payments was questioned.

The third bill would require a gas company to record within 30 days of the expiration, termination or forfeiture of a lease a document with the county register of deeds that releases its interests in the oil and gas.

The bills now move to the House.

http://www.pennlive.com/midstate/index.ssf/2014/04/full_refunds_dem...