Join our newsletter and get a free copy of "Maximizing Your Minerals"

Discover how you can:

  • Negotiate the best lease for your minerals
  • Understand how the oil companies work
  • Prevent costly mistakes

*Your information will not be shared with others.

Chesapeake Called to Account for Dealings with Mineral Owners

by Elizabeth Alford on October 5, 2016

Chesapeake Energy under federal investigation for possible antitrust violations including how it deals with mineral owners.

Related: Chesapeake to Pay Record Royalty Settlement

Last week, the U.S. Department of Justice announced that it has opened an investigation into possible antitrust violations by Chesapeake Energy Corp. The agency has issued subpoenas for documents related to how the Chesapeake pays royalty owners and accounts for oil and gas reserves.

In Chesapeake’s 2015 annual report, the company alluded to ongoing investigations and mounting legal trouble.

“There are ongoing governmental regulatory investigations and inquiries into such matters as our royalty practices and possible antitrust violations. The outcome of any pending or future litigation or governmental regulatory matter is uncertain and may adversely affect our results of operations. In addition, we have incurred substantial legal expenses in the past three years, and such expenses may continue to be significant in the future.”

Chesapeake has been at the forefront of oil and gas litigation across the country including being named in several lawsuits alleging underpayment of royalties in Arkansas, Louisiana, Ohio, Oklahoma, Pennsylvania and Texas.

  • January: the Fort Worth school district was awarded $1 million when Chesapeake improperly deducted expenses from royalties owed to the district and its taxpayers. The suit involved at least 30 leases on land covering at least 1,000 acres.
  • February: the Texas Supreme Court upheld a lower court’s ruling to award at least $1 million in royalties, interest and attorney fees to the Hyder family who had been fighting Chesapeake Energy since 2010.
  • May: Chesapeake agreed to pay Fort Worth $15 million to settle a lawsuit that claimed the company owed $33.5 million in royalty payments from more than 260 leases on about 5,800 acres of city property in Tarrant and Johnson counties.
  • April: the Michigan Attorney General reached an agreement with Chesapeake that included setting up a $25 million fund to pay residents who say they were defrauded by the company.

Previous post:

Next post: