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Chesapeake Energy Faces Two New Lawsuits In New York

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Two separate class action lawsuits have been filed in federal court against Chesapeake Energy by nearly 300 residents of New York’s Southern Tier.

One lawsuit, filed against Chesapeake Energy and Norway-based Statoilhydro by 160 landowners regarding the leases of over 12,000 acres in Broome and Tioga counties, claims Chesapeake “engaged in misleading and deceptive practices directed at hundreds, if not thousands, of persons owning real property in New York state”.  The other lawsuit involves 146 landowners regarding leases in Broome, Tioga, Cortland and Chemung counties who have similar claims.

The lawsuits concern lease extension letters sent by Chesapeake and other drillers, citing New York’s delay in issuing drilling permits.  Even though the original leases were set to expire, the drilling companies involved say that when in July 2008, Governor David Paterson issued a moratorium on horizontal hydraulic fracking it constituted a “force majeure”. Because of this, the drilling companies extended the original leases, which were signed at a few dollars an acre.

A lawyer for the plaintiffs said that “Chesapeake, 10 years ago, never dreamed that they would be drilling horizontally in the Marcellus Shale. So it’s just not fair for them to say, ‘Well, we’re held up drilling in the shale now’ when that’s not what they intended to do when they started.”

Senior director of corporate development for Chesapeake Energy, Brian Grove said “Chesapeake has taken reasonable and legal measures to extend the terms of many of our leases in New York state. These measures are based upon the original lease agreements, which can allow for extensions of the original lease term for various reasons.” He continued,  “This step unfortunately has been necessary due to the moratorium placed on drilling natural gas from the Marcellus Shale in New York state.” disclaimer: This article: Chesapeake Energy Faces Two New Lawsuits In New York was posted on Wednesday, May 4th, 2011 at 8:25 pm at and is filed under Other Lawsuits.

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