Chesapeake Sued Over Barnett Shale Royalty Payments

By Jess Krochtengel (April 2, 2014, 8:27 PM EDT) -- Two lawsuits were filed Tuesday in Texas state court against Chesapeake Operating Inc., accusing the natural gas giant of a fraudulent scheme that rips off royalty owners by using affiliated companies and related entities to suppress gas prices at its Barnett Shale wells.

The plaintiffs, including Texas Mesa Vista 2000 Ltd. and Snow Operating Co., allege they've been underpaid by potentially millions of dollars in royalties because of a gas marketing system set up to "systematically underpay" royalties according to lease terms, echoing claims brought in more than a dozen other suits against Chesapeake in Tarrant County District Court. The plaintiffs,...

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