Chesapeake sends out bigger Barnett Shale royalty checks

It’s not a question Chesapeake Energy hears very often: Why is my royalty check suddenly bigger?

Some local landowners holding leases with the Oklahoma City energy giant, who were used to getting checks for $100 or less, are unexpectedly receiving larger sums, sometimes $1,000 or more.

What gives, they ask? Along with the check is a statement — sometimes short, but some several pages long — where it appears that Chesapeake has recalculated royalties on production going back years.

This surprise bounty is happy news for property owners, but it is raising eyebrows.

The Star-Telegram obtained an email from Fort Worth attorney Dan McDonald, who has filed more than 400 lawsuits against Chesapeake over underpaid royalties, asking clients who have received checks to contact his office. “It appears from the check stub, or check detail, that Chesapeake has recalculated the payment,” the email states.

Asked about his email, the usually talkative McDonald said: “No comment.” Chesapeake’s spokesman Gordon Pennoyer also declined to discuss the checks.

Now why wouldn’t Chesapeake want to crow about giving its royalty owners good news? The answer may be as simple as the company clearing up titles and accounts, no more, no less. It has thousands of leases in the Barnett Shale, so it could be no big deal. And not everyone getting this manna from heaven is a client of McDonald’s.

But the pending litigation between Chesapeake and McDonald may explain why they aren’t talking. While the two sides have been at loggerheads, they recently settled two lawsuits that were about to go to trial and there’s talk that more settlements may follow.

This story was originally published April 21, 2016 at 1:16 PM with the headline "Chesapeake sends out bigger Barnett Shale royalty checks."