N.Y., Chesapeake Energy reach settlement on disputed gas leases | Press & Sun-Bulletin | pressconnects.com

N.Y., Chesapeake Energy reach settlement on disputed gas leases | Press & Sun-Bulletin | pressconnects.com.

Summary of Judgment:

June 14, 2012 CHESAPEAKE/ NYS ATTORNEY GENERAL SETTLEMENT
AGREEMENT: OVERVIEW OF # OF LEASES IMPACTED:
1. BACKGROUND:
a. Document is called “ASSURANCE OF DISCONTINUANCE”
b. Combines AG’s investigation into:
i. Force majeure claims by Chesapeake; and
ii. Lease extension clauses
iii. No admission of wrong doing by Chesapeake.
2. # OF LEASES IMPACTED:
a. 50 LEASES–Chesapeake agrees to release–these had a blank
for the amount necessary to trigger the Automatic Extension;
b. 4,365 LEASES–land owners can negotiate with other gas
companies:
i. If they receive bona fide offers that are better;
ii. Then Chesapeake can decide if they will match the better
terms or release the lease, after the better one
executed;
c. 1,865 LEASES–AG agrees that Chesapeake has extended
properly under the Automatic Extension clause
3. OTHER PROVISIONS:
a. Chesapeake will not use the state environmental review
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process as a reason to extend any leases expiring after Dec. 31,
2013;
b. Chesapeake will pay state $250,000.00 to cover its costs for
this investigation;
c. There is no agreement as to whether Chesapeake’s force
majeure claims, based on state regulatory situation, are valid
or invalid.

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