FORT WORTH, TEXAS – NOV. 29, 2012
Wick Phillips, a full-service business law firm with offices in Dallas, Fort Worth and Austin, Texas, took on Chesapeake Energy, the nation’s second largest producer of natural gas, winning a judgment in excess of $1 million on behalf of a group of leaseholders.
During the trial David Drez, a partner at and the lead attorney on the case, successfully proved that Chesapeake breached their agreement with the leaseholders in connection with improper deductions from royalty and overriding royalty payments, and owed amounts dating back to Sept. 1, 2004. The ruling also has the potential to significantly affect future royalties due under the lease.
According to the judgment, Chesapeake failed to pay a substantial amount of royalties owed to the leaseholders and their related trusts for post-production costs such as gas used as gathering system fuel and to fuel gas lift compressors. Significantly, the Court upheld the language in the lease that did not permit Chesapeake to deduct costs from overriding royalties due on off-lease horizontal wells drilled from the Plaintiffs’ property.
The case was heard in the 17th District Court in Tarrant County and the final judgment handed down on Aug. 7, 2012, ordered Chesapeake to pay economic damages that totaled more than $1 million including interest and attorney’s fees of more than $250,000. The judgment is now on appeal.
About Wick Phillips: Wick Phillips is a full service business law firm with offices in Dallas and Fort Worth. Its transactional section handles multiple M&A, financing, real estate, private equity and other commercial matters for a variety of clients. For more information visit www.wickphillips.com.
