| NEW YORK, Sept 9
NEW YORK, Sept 9 Chesapeake Energy Corp
has agreed to release more than 13,000 acres of land leased for
oil and gas drilling in New York state as a ban on fracking
extends into its sixth year, a statement from lawyers involved
in the case confirmed on Monday.
The Oklahoma-based company agreed to terminate the leases in
Tioga and Broome counties in the southern portion of the state,
ending a two-year legal battle with over 200 landowners,
according to law firm Levene Gouldin & Thompson, which
The impending deal was reported by Reuters last month.
Chesapeake had been appealing a federal court ruling in
November that stated the company could not use a state ban on
high volume hydraulic fracturing, known as fracking, as a reason
to declare force majeure and extend leases beyond their expiry
without offering landowners better terms.
Some landowners, who signed their leases during the last 13
years before a U.S. drilling boom boosted land prices in
gas-rich areas like New York, had been calling for a release
from the leases to seek more lucrative deals from other energy
firms. Other landowners are now opposed to any drilling on their
Chesapeake's decision to now drop the leases is a sign of
energy firms' growing frustration over operating in the Empire
State, where most drilling has been on hold since 2008. It is
also an indication of how the Oklahoma-based company is reining
in spending after years of aggressive acreage buying left it
with towering debt.
Chesapeake did not immediately respond to a request for
The 13,000 acres is a small portion of the 2.5 million acres
the company holds in natural gas shale plays across the United
States, according to company filings, but is a meaningful sum
for New York where Chesapeake is one of the biggest
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. It
generally offered a 12.5 percent royalty payment from oil or gas
produced on the land, a number of landowners have said.
But, in a frenzied land grab that accompanied the U.S.
energy boom since 2007, landowners across the country have
received thousands of dollars an acre, including just miles away
in neighboring Pennsylvania.