Pennsylvania

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Pennsylvania Attorney General’s lawsuit over royalty payments advances

File photo. A Chesapeake Energy natural gas well site in Bradford County, PA.

Ralph Wilson / AP Photo

File photo. A Chesapeake Energy natural gas well site in Bradford County, PA.

A lawsuit is moving forward by the Pennsylvania attorney general’s office alleging natural gas companies didn’t pay royalties to landowners as they’d promised.

Bradford County Common Pleas Court Judge Kenneth Brown denied the preliminary objections raised by the defendants, Chesapeake Energy and Anadarko Petroleum.

The lawsuit, filed in 2015, accuses the companies of violating the Unfair Trade Practices and Consumer Protection Law, by promising landowners royalty money they never paid.

Pennsylvania Attorney General Josh Shapiro (D) is seeking to recover money he says was withheld from thousands of Pennsylvanians who signed gas leases.

“As I travel around the Commonwealth, I hear from landowners constantly how frustrated they are with these companies,” Shapiro said. “They signed agreements with them and they were not given what they were told.”

As StateImpact Pennsylvania has previously reported, at issue are so-called post production costs, which gas companies incur when they move and process gas from wells to the market. These costs can be passed along to landowners, as deductions from monthly royalty checks.

Former state Attorney General Kathleen Kane began investigating Chesapeake Energy in early 2014, at the behest of former governor Tom Corbett and state senator Gene Yaw (R- Bradford).

In an email, Chesapeake spokesman Gordon Pennoyer said Judge Brown’s opinion addresses flaws the Attorney General’s case.

“We are pleased that, on his own initiative, the Judge certified important legal issues for immediate appeal to the Pennsylvania Commonwealth Court.”

Anadarko Petroleum did not respond to a request for comment Thursday.

 

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