Eagle Ford Mineral Owners Sue Chesapeake Energy for Royalty Underpayments

Mar 08, 2016, 10:32 ET from Burns Charest LLP

DALLAS, March 8, 2016 /PRNewswire/ -- Members of South Texas' prominent Dilworth family and related owners of mineral rights located on three of the family's Texas ranches are suing Chesapeake Energy Corp. (NYSE: CHK) and the other working interest owners for more than $9.4 million in alleged unpaid or underpaid royalties. The plaintiffs have also sought a declaration as to the termination of the three leases in question.

The lawsuit filed in state district court in McMullen County accuses Chesapeake of breach of contract and other claims involving oil and gas leases on Dilworth family ranches covering about 15,900 acres and including 85 producing wells in the heart of the Eagle Ford shale.

"As oil prices fall, we've seen more sensitivity to post-production costs, price selection, volume measurements, and other lease-administration issues. This case is just one of many that fit the same description," says Daniel Charest of Burns Charest LLP in Dallas, who represents the plaintiffs. "Based on Chesapeake's conduct, my clients are within their rights to terminate these leases, and they're prepared to do just that if necessary."

The lawsuit alleges Chesapeake paid insufficient royalties based on contractual pricing and production volumes and violated specific lease terms prohibiting deductions for production costs. The plaintiffs also say the company failed to deposit the full royalty payments into escrow in the event of a dispute. Some of the alleged breaches could lead to termination of the leases.

The case is Dilworth v. Chesapeake Operating, LLC, et al., No. M-16-0011-CV-C, in the 343rd District Court.

The attorneys at Burns Charest have years of experience in complex oil and gas royalty disputes. In late 2015, the firm secured a favorable, confidential settlement for members of the Bass family in Fort Worth as part of a separate lawsuit against Chesapeake over unpaid oil and gas royalties in north Texas.

Burns Charest is a Dallas and New Orleans-based trial law firm with a national practice representing consumers and businesses. The firm represents clients in large, complex class actions; antitrust claims; oil and gas royalty disputes; environmental pollution cases; and asbestos exposure claims. To learn more, visit http://www.burnscharest.com.

For more information on Burns Charest LLP please contact Mark Annick at 800-559-4534 or mark@androvett.com.


SOURCE Burns Charest LLP