6th Circ. Backs Lease Extension For Inactive Oil Site

Law360, New York (June 8, 2009, 12:00 AM EDT) -- A federal appeals court has upheld Chesapeake Appalachia LLC's right to repeatedly extend a lease on several thousand acres in Kentucky owned by Northup Properties Inc., even though Chesapeake isn't producing any oil or gas at the site.

Judges Gilbert S. Merritt, Deborah L. Cook and Helene N. White of the U.S. Court of Appeals for the Sixth Circuit ruled Monday that Northup cannot terminate the lease of roughly 4,300 acres because the contract expressly allows Chesapeake to extend the lease by paying delay rentals, regardless...
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