Chesapeake Energy improperly deducted expenses from royalty payments and violated other terms of its drilling lease with a prominent Fort Worth family, a state appeals court ruled this week in the latest development of several such suits working their way through the legal system. The Fourth Court of Appeals in San Antonio upheld a Tarrant County court decision that found Chesapeake breached the terms of its lease with Martha Rowan Hyder, who represented the estate of her late husband, Elton M. Hyder Jr., and their children. The lower court had awarded the Hyders about $700,000 in unpaid royalties, plus interest and attorney’s fees that pushed total damages to nearly $1 million.
The Hyders filed their suit in 2010, one of several in recent years accusing Chesapeake of not adequately paying royalties from its natural gas production in the Barnett Shale. State Judge Melody Wilkinson in 2012 found that Chesapeake breached the terms of Hyder’s lease and awarded damages, which the appeals court affirmed Wednesday. David Drez of the Fort Worth office of the Wick Phillips law firm, who represented the Hyders, said both court rulings recognized the validity of the negotiated terms of the family’s lease. The Hyders in 2004 signed a mineral rights lease on about 1,000 acres in Tarrant and Johnson counties with Four Sevens Oil Co., which assigned the lease to Chesapeake in 2006, according to court filings.
Chesapeake, through a spokesman at its Oklahoma City headquarters, declined to comment on the case.
For more, see Saturday's Star-Telegram.
-- Jim Fuquay