Chesapeake Continues to Rankle Landowners by Slashing Royalty Payments
The Drake brothers thought their century-old family farm near Sayre would make them rich. Back in 2000, they sold the natural gas rights on their 490-acre farm to Chesapeake Energy.
“It’s going to be free, easy money,” said Jim Drake.
It began in 2010, when the well on the Drake farm first produced natural gas. But two years later, the brothers noticed their royalty checks from Chesapeake shrinking.
The gas company began deducting money from the Drake’s royalty checks for what Chesapeake called “post-production and transportation costs.” It’s a deduction the brothers claim was not in the lease they signed 15 years ago.
Then, deductions taken from their October 2013 check left them angry.
“You feel like you’re being robbed. You feel like you’re ripped off,” said Jim Drake.
Records show in October of 2013 Chesapeake took about $56,000 worth of natural gas from the Drake farm. According to terms of their lease, the gas company should have paid the brothers almost $7,000. After Chesapeake deducted post-production costs, the Drake brothers’ royalty check was just $133.
“How can they do this?” wonders Jim Drake. “Why do this? How can they do this legally? We look at this as legal fraud.”
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