Chesapeake to Pay Record Royalty Settlement

by Elizabeth Alford on June 22, 2016

Chesapeake Energy has settled hundreds of lawsuits in Texas where the company was accused of cheating property owners out of millions in natural gas royalties.

Related: Fort Worth School District to Receive Royalties

The city of Fort Worth has been in a battle with Chesapeake Energy since 2013, when it filed suit claiming 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.

In Late May, Chesapeake agreed to pay Fort Worth $15 million to settle the lawsuit, making it the largest settlement the company has ever been required to pay.

Mayor Betsy Price told the Star-Telegram that “This is a very good settlement. Obviously, we would have liked to have the whole thing. We’ve actively pursued this on behalf of our citizens and taxpayers and we feel comfortable with where we are. We are particularly pleased with payments going forward. It adds up to a lot.”

This judgment comes on the heels of another win by Fort Worth residents. In January, the Fort Worth School District reached an out-of-court settlement with Chesapeake for $1 million for a 2014 case where the school district case alleged the company 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. Until this week, the amount were unknown.

The Tarrant County College District and Tarrant County commissioners have additional lawsuits pending against Chesapeake. 

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