Natural gas giant Chesapeake Energy (NYSE: CHK) has reached an out-of-court settlement with Fort Worth billionaire Ed Bass and 20 other Barnett Shale mineral rights owners. The terms of the agreement are confidential, but the dispute involved millions of dollars in unpaid royalties for drilling on almost 4,000 acres in southern Tarrant County and northern Johnson County.
Last month, U.S. District Judge Ed Kinkeade ruled in favor of the mineral owners, saying Chesapeake improperly deducted postproduction costs from their royalty checks.
The lawsuit alleged that Chesapeake improperly deducted postproduction costs, expressly forbidden by the leases, and then used the sale of gas to affiliates to set a below-market price on which the royalties were paid, which also breached the lease's terms, the Star-Telegram reported.
Chesapeake has been plagued with a great deal for legal trouble this year:
- January, the company agreed to pay $119 million to settle a class action suite from 2013 that included thousands of royalty owners involving possibly 10,000 wells.
- February: Chesapeake filed a lawsuit against American Energy Partners alleging that ex CEO Aubrey McClendon stole confidential documents including maps of oil and gas prospects before leaving the company in 2013
- March: a group of landowners in Bradford County, PA filed a suit alleging that Chesapeake and Williams Partners violated antitrust laws by conspired to restrain trade in the market for gas gathering services.
- April: the company stood before the Texas Supreme Court to challenge a 2014 Appeals Court ruling that would cost them at least $1million.
The agreement was reached just as jury selection was set to begin Tuesday for a trial that would have determined the amount of the damages.