Chesapeake Energy Corp. has agreed to pay $7.5 million to settle a class-action lawsuit filed in August by Pennsylvania landowners. It was alleged that the natural gas producer was deducting large fees from the Plaintiff’s royalty checks. Chesapeake, the largest natural gas operator in the state, settled the lawsuit shortly after it was filed in the U.S. District Court for the Middle District of Pennsylvania. The settlement will require court approval. It’s expected to be approved by the end of the year.
It was reported that Chesapeake this year started to take much heavier deductions from royalty checks it sends Pennsylvania landowners to help pay to gather, compress, market and transport natural gas. In most cases, the royalty compensation was cut by more than half. Chesapeake and its peers send royalty checks to landowners, typically monthly, for the natural gas they extract. The settlement involves a complex formula to reimburse Plaintiffs who had so-called “market enhancement clauses” in their leases. It will bar Chesapeake from deducting certain percentages of fees from Plaintiffs’ royalty checks in the future. The case is Demchak Partners Limited Partnership vs. Chesapeake Appalachia LLC in the U.S. District Court for the Middle District of Pennsylvania.
Source: Reuters News Service
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