|
It could be history repeating itself.
Chesapeake Energy's royalty payment practices are being investigated by the U.S. Department of Justice in several states.
Chesapeake says in a recent regulatory filing that it has received subpoenas from the federal agency and the states seeking information on its royalty payment practice.
Two natural gas companies, Chesapeake and NiSource, in 2008 agreed to pay $380 million to settle a headline-grabbing Roane County class-action lawsuit over royalty payments.
The original $404 million verdict was the third largest in the United States in 2007.
The plaintiffs in the case, natural gas royalty owners, filed the lawsuit in early 2003 alleging that the producer underpaid royalties by deducting a portion of post-production costs incurred to gather and transport gas to interstate pipelines and by not paying market value for gas produced under all leases, even those providing for payment based on actual proceeds received for the gas.
Plaintiffs sought the alleged royalty underpayment and punitive damages.
Chesapeake Energy's CEO Aubrey McClendon then announced that it would not build a $35 million state-of-the-art headquarters for its Eastern operations in Charleston, citing the court decision against the company.
McClendon was later fired by the company.
The latest filing with the Securities and Exchange Commission also says Chesapeake's purchase and lease of oil and gas rights in various states is being investigated.
The states have yet to be identified.
See ORDER MARKS END TO TAWNEY CASE | 
