By Edward McAllister
NEW YORK, Sept 4 Chesapeake Energy Corp
will finalize an agreement next week to drop about 12,000 acres
of land leased for energy drilling in New York state, as a
moratorium on fracking continues into its sixth year.
Reuters reported last month that Chesapeake decided to walk
away from about 100 leases in Broome and Tioga Counties in the
south of the state, ending a two-year legal battle with
landowners who wanted to cancel expired leases or renegotiate
for better terms.
Lawyers representing Chesapeake said in a letter to the U.S.
Court of Appeals for the Second Circuit on Tuesday that they
were in the final stages of negotiating a settlement and that a
deal is expected to be made official next week.
Lawyers representing landowners confirmed the impending
"Assuming there are no objections, we should sign the
stipulation of settlement sometime next week," said Scott
Kurkoski, a partner at Levene Gouldin & Thompson, who has sent
the final settlement to his landowner clients for review.
The 12,000 or so acres are a small portion of the 2.5
million acres Chesapeake holds in natural gas shale plays across
the United States, according to company filings, but is a
meaningful amount for New York, where the company is one of the
Chesapeake was one of the first energy companies to enter
New York on a major scale, securing leases from hundreds of
landowners, some for as little as $3 an acre, since 2000. But a
moratorium imposed in 2008 on high volume fracking largely
halted drilling in the state.
The company had been appealing a decision by a federal court
in New York state that ruled in November that Chesapeake could
not use the state fracking ban as a reason to declare force
majeure and hold on to leases beyond their expiry without
offering landowners better terms.
Chesapeake's decision to drop the appeal, and the leases, is
a sign of the growing frustration of energy firms over operating
in the Empire State, where most drilling is on hold. It is also
an indication that the Oklahoma-based company is reining in
spending after years of aggressive acreage buying left it with a