Chesapeake Energy Corp. (CHK:US), the second-largest U.S. natural gas producer, must pay $121 million to three Texas lease holders after failing to persuade an appeals court to overturn a verdict that it reneged on deals to buy oil and gas leases when prices plunged in 2008.
A federal judge in Houston ruled in 2012 that Chesapeake couldn’t escape contracts to lease more than 500 oil and gas properties from Preston Exploration Co. and two affiliates. The Oklahoma City-based company began negotiating the leases in June 2008, only to see gas prices plunge by as much as 50 percent in the weeks before the contract closing that November.
http://www.bizjournals.com/dallas/blog/morning_call/2014/05/appeals-court-upholds-121m-judgment-against.html
That's interesting. So essentially they were held to the terms of the contract even though they never signed or closed the deal. I wonder if they had put money upfront that would have been forfeited if they didn't close.
My understanding is that CHK agreed (signed contract) to purchase the leases and close on them at a later date. When the date came to close CHK never showed up. This latest ruling upholds the original courts finding that CHK is liable for the leases they agreed to buy but failed to follow through with purchasing. I couldn’t agree with them more.