Seeking Alpha

Chesapeake loses appeal, court rules it must pay $121M to leaseholders

  • Chesapeake Energy (CHK) must pay $121M to three Texas leaseholders after failing to persuade an appeals court to overturn a verdict that it reneged on deals to buy mineral rights when prices plunged in 2008.
  • CHK had agreed in 2008 to buy ~500 oil and gas leases from Preston Exploration and two affiliates, but backed out after gas prices plunged more than 50% shortly before the deal was to close.
  • The lawsuit is one of hundreds of landowner claims filed in federal and state courts in Texas, Michigan, Pennsylvania and other states alleging CHK broke contracts for oil and gas leases.
Comments (5)
  • mattb917
    , contributor
    Comments (6) | Send Message
     
    The ghost of Aubry still haunts this company.
    2 May 2014, 05:20 PM Reply Like
  • papayamon
    , contributor
    Comments (1190) | Send Message
     
    This could have a serious impact. Very bad news.
    2 May 2014, 05:25 PM Reply Like
  • GamCap LLC
    , contributor
    Comments (449) | Send Message
     
    A relic from the Aubrey-days, has reserved for it since 2012 on the balance sheet. I hope they pay it, move on and focus on additional asset sales, improved well performance and less balance sheet complexity.
    2 May 2014, 06:34 PM Reply Like
  • WPSPIKER
    , contributor
    Comments (1158) | Send Message
     
    Gamcap:

     

    I remember seeing the reserves for legals on the bal, but don;t remember specifics, thinking it was in 500M range>? do you remember?
    2 May 2014, 06:51 PM Reply Like
  • GamCap LLC
    , contributor
    Comments (449) | Send Message
     
    I skimmed the filings from last Q, I believe they are required to reserve an amount which they perceived to be their maximum likely liability. EX, APC had an assumed 6B internal legal liability for their Tronox case(paid 5b). I had been very concerned about the DOJ investigation as it dragged on for almost 2 years, prob see the State of Michigan either settle or drop the case soon.

     

    CVX, XOM...another lame Q from the super majors...their production has dropped back to 2006/2007 levels. CVX, especially is way light on domestic natty production vs. XOM.
    2 May 2014, 09:46 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs