WSJ: Chesapeake accused of underpaying gas royalties

|About: Chesapeake Energy Corporation (CHK)|By:, SA News Editor

WSJ examines Chesapeake Energy's (CHK -0.7%) deepening dispute with Pennsylvanians over royalty payments to those with CHK wells on their land.

Pennsylvania requires oil and gas drillers pay royalties of at least 12.5%, but lets drillers deduct costs for transporting, processing and marketing - and CHK appears to take a much more aggressive approach to those deductions than other energy companies operating there, including Anadarko (APC) and Statoil (STO).

"I'm paying them to take my gas," says one landowner who claims his royalties don't cover the added taxes for owning commercial property.

The public outcry has grown so loud that Pennsylvania Gov. Corbett, who has received campaign contributions from the company, wrote an open letter last month asking the state attorney general to investigate.