Image courtesy of Chesapeake Energy.

Chesapeake Energy agreed last Friday to pay $119 million to Oklahoma natural gas royalty owners to resolve a 2004 payment dispute.

The royalty owners claimed that Oklahoma-based Chesapeake improperly deducted compression, processing, marketing and other midstream expenses for over 11,8000 natural gas wells and underpaid them for the wells.

The lawsuit was filed by Kansas resident John Fitzgerald in 2010 and claimed Chesapeake did not pay him the full royalties owed for his oil and natural gas wells in Oklahoma.

“We are pleased to reach this fair and reasonable agreement and look forward to further strengthening our relationships with our Oklahoma royalty owners,” Chesapeake spokesman Gordon Pennoyer told the Oklahoma.

Fitzgerald won class action status in 2013 but that decision was later overturned on appeal.

The deal includes all of Chesapeake’s Oklahoma natural gas royalty owners from 2004 to the end of 2014.

The settlement will go before an Oklahoma judge in April for approval.

In 2013, Chesapeake paid the Oklahoma Commissioners of the Land Office $18 million to settle a similar dispute.


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