Chesapeake hit with another Barnett Shale suit
Chesapeake Energy has once again become the target of a lawsuit by property owners in the North Texas Barnett Shale region alleging the producer underpaid millions of dollars of royalties to them.
In a suit filed in District Court of Dallas County, more than 30 North Texas businesses and individuals are suing Chesapeake and Total USA, alleging that Oklahoma City-based Chesapeake's $588 million sale of assets to New York hedge fund Global Infrastructure Partners in 2009 resulted in the charging of unreasonable fees on royalties.
The lawsuit, which involves oil and gas leases covering more than 5,400 mineral acres and more than 750 producing gas wells in Tarrant, Johnson and Ellis counties in Texas, alleges that the sale was structured to benefit Chesapeake at the expense of royalty owners.
"Chesapeake structured its midstream asset sale and transportation agreements in such a way that the lessors and royalty owners bore unreasonable costs," plaintiffs' attorney Daniel Charest of Dallas said in a statement.
Representatives for Chesapeake and Total could not be reached for comment Thursday.
The suit alleges that the royalty underpayments began with the sale of Chesapeake's midstream assets to GIP and the subsequent formation of Chesapeake Midstream, later called Access Midstream, to manage those assets.
The deal included an exclusive 20-year production commitment related to Chesapeake's Barnett Shale midstream gathering assets.
"As part of this transaction, the Chesapeake defendants agreed to pay excessive, unreasonable gathering charges (the "Barnett Gathering Fees") to Chesapeake Midstream/Access," the suit charges.
Those fees formed "the core of the excessive charges that the Chesapeake defendants deduct from the monthly royalty and overriding royalty interest owner payments," the suit alleges.
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Replies to This Discussion
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Permalink Reply by 3p4ekx80ulfbv on
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No big deal
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Charles,
Thanks for the additional Chesapeake Lawsuit news.
Some may have missed Chesapeake's "Looking Forward" statement in this story, for all of those thinking about investing in the stock market.
"Chesapeake added that it expected that additional lawsuits would be filed by new plaintiffs making similar allegations."
So true doug, so true.
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Permalink Reply by charles skellett on
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your welcome...
harry received his rental money but that's the easy part especially when so many others blazed the trail before him at $5 per acre and 3 page boiler plate leases... the real "chessie education" starts at royalty ownership...
125 acres/over 12 acres with up to 30 feet of water since 1981 (before i'm accused of owning a postage stamp lot)
chasgas
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They weren't "blazers" they were knuckleheads....and any future royalties owed to me will be paid in full...made certain of that by selling some of my mineral rights to a top notch energy investment firm in houston....they have more lawyers than chk and NOBODY beats them out of a dime.....trust me, I will get paid
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Permalink Reply by Frank Walker on
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Somebody hook up Chesapeake with Hillary Clinton. That's a match made in heaven!!
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Frank,
There will come a day when both parties you mentioned will be wearing orange jumps suites.
Neither party can control their greed and willingness to break any law on the books to have their way with US citizens.
The question of when did Texas & Oklahoma stop hanging horse thieves comes to mind. Was it about the same time domestic Oil & Gas companies started stealing from landowners?
There was a time when theft was illegal in the US, now it depends on your wealth, your line of work, and which elected officials you own.
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