Chesapeake Energy settles lawsuit alleging company underpaid Texas royalty owners
Chesapeake Energy Corp. has settled a lawsuit over Texas royalties brought by a group of royalty owners. But the company maintained it calculated royalty payments correctly.
by Paul Monies Published: September 10, 2015
Chesapeake Energy Corp. has settled a lawsuit over Texas royalties brought by a member of the wealthy Bass family and more than 20 other royalty owners.
Filed in 2013, the lawsuit alleged Chesapeake took improper royalty deductions to cover some drilling expenses and post-production activities. It also claimed the company violated lease agreements by selling natural gas production from one corporate entity to another.
Chesapeake maintained it calculated the royalty deductions correctly.
U.S. Magistrate Judge Ed Kinkeade ruled in favor of some of the plaintiffs' claims in an Aug. 19 partial summary judgment but did not address potential damages. The case was set to go to trial after an unsuccessful settlement conference in late August.
Terms of the settlement were confidential. A court document filed earlier this week said the parties agreed at least $8.6 million in damages were at issue.
"We're very pleased that this matter has been resolved," said Daniel Charest, an attorney with Dallas-based law firm Burns Charest LLP who represented the royalty owners. "We believe the evidence was compelling on behalf of the property owners."