Dallas/Fort Worth Airport may settle its lawsuit with Chesapeake Energy for $8.2 million.
The airport board is considering a final settlement that includes an $8 million payment related to the natural gas company’s drilling commitment and a $200,000 royalty payment.
“We are getting a good, solid, fair deal,” the airport’s vice president of commercial development, John Terrell, told the board on Tuesday.
The settlement stems from a lawsuit filed in June in which the airport said Chesapeake failed to fulfill the terms of a 2012 settlement from a previous lawsuit. In that case, the airport alleged that the Oklahoma City-based company shortchanged DFW on royalty payments, and the airport won $5 million from Chesapeake along with assurances that it would drill more wells.
In August, the board considered a $9 million proposed settlement. As part of the new deal, the airport and Chesapeake decided to take 18 more months to resolve a royalty issue related to reinjected gas, which reduced the settlement amount.
The parties will also ask the court to decide whether the drilling commitment required vertical or horizontal wells. If the court finds in the airport’s favor, Chesapeake has agreed to pay an additional $10.2 million.
The full airport board will vote Thursday on accepting the settlement. The settlement will then need to be approved by the city councils of Dallas and Fort Worth.
Chesapeake drilled 112 wells at the airport before it stopped in 2009 when gas prices collapsed. The airport received a $185 million bonus when it signed its lease with Chesapeake in 2007, and by February 2012 had received $293.4 million from the deal. The airport used its proceeds to pay for capital projects including renovation of terminals that is still underway.
In September, Total E&P USA, the domestic unit of a French energy firm, said it was buying out Chesapeake’s assets in the Barnett Shale, taking control of the 215,000 net developed and undeveloped acres, wells, leases, minerals, buildings and properties.