First, from the Wall Street Journal:
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Then, from Forbes:
In recent weeks more and more oil and gas industry folks have been drawing my attention to articles like this, this, and this, from small-town papers about the bevy of lawsuits being filed against Chesapeake Energy. Most of the plaintiffs are landowners in Texas and Michigan who agreed to lease their land to Chesapeake (often at prices more than $5,000 an acre) for oil and gas exploration. They signed contracts with Chesapeake, or one of its agents and received orders for payment in amounts totaling millions of dollars. So imagine their surprise when a few weeks later instead of getting cash the landowners instead got letters from Chesapeake claiming to void the leases and stating “we will not be funding the order of payment.” Try doing that with your landlord sometime and see what happens.
Enough landowners felt they had a case against Chesapeake that in Texas last year they filed a class action lawsuit over leases in the Barnett Shale. More recently we’ve seen individual cases being filed in northern Michigan, where Chesapeake and Encana Energy had been competing for acreage in the Collingwood Shale. A test well drilled by Encana into the Collingwood a year ago was a big success, and set off the land rush. A state auction of mineral rights last May reportedly brought an unprecedented $178 million for 118,000 acres.Read the rest of that article here.
None of this should be in the least bit surprising. Chesapeake has been firing employees left and right and selling off assets at a loss constantly. Why would anyone expect them to show any consideration to landowners? It's all about the bottom line.
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