More North Texas Landowners Accuse Chesapeake of Skimming Royalties, File Class Action Suit

Aubrey McClendon, CEO of Chesapeake Energy
Aubrey McClendon, CEO of Chesapeake Energy

Chesapeake Energy, the country's second-largest producer of natural gas, has been hit with a class-action lawsuit accusing the company of violating royalty agreements with landowners in Tarrant and Johnson counties.

As you may recall, an identical suit was brought in July by a family of Johnson County landowners who claim Chesapeake deducted shale gas production, compression and marketing expenses from their royalty checks -- a violation, they say, of their contract. Now two other landowners have filed suit in Dallas federal court on behalf of anyone whose lease agreements have been, say, reinterpreted.

That could include a host of potential plaintiffs. According to an August Fort Worth Star-Telegram story, the company cut a deal with French oil giant Total in 2010 for a 25 percent stake in Chesapeake's North Texas wells. Part of the agreement was to deduct production and marketing costs for the shale gas from royalty checks. Natural gas prices at the time were hitting ridiculous lows. And Chesapeake has been the subject of scandal because CEO Aubrey McClendon's personal financial entanglements may have conflicted with his role as a manager. The company has been offloading assets, including its Fort Worth office tower.

In other Chesapeake legal news, it has reportedly settled its years-long battle with DFW International Airport over royalty payments for some 100 wells for $5 million.

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