UPDATE 1-Chesapeake to cut over 200 jobs in Charleston

NEW YORK, Feb 26 (Reuters) - Chesapeake Energy Corp (CHK.N) said on Thursday it would cut about 215 jobs in Charleston, as it converts the office in Charleston from a regional corporate headquarters to a regional field office.

The company is consolidating the management of its Eastern Division operations into the company's corporate offices in Oklahoma City. Chesapeake said about 40 positions will remain in Charleston, while the positions of those affected will either be moved to Oklahoma City or eliminated.

"The reduction in our employee base in West Virginia became inevitable when we decided last year not to build our $40 million regional headquarters office complex in Charleston following the West Virginia Supreme Court's refusal to consider our appeal in the Tawney case," said Chief Executive Aubrey McClendon, in a statement.

In the Tawney Case, NiSource Inc (NI.N) and Columbia Natural Resources had to pay over $300 million and drop their appeals of a jury verdict that found the companies had shortchanged thousands of landowners out of the oil and gas royalties that were owed to them.

Chesapeake inherited the liabilities from the lawsuit when it acquired Columbia Natural Resources. The West Virginia Supreme Court turned down the request for an appeal.

"At that time, we realized that until West Virginia's judicial system provides fair and unbiased access to its courts for everyone, a prudent company must be very cautious in committing further resources in the state," said McClendon.

"Even though the state Supreme Court's decision was not the primary reason for the reorganization, it did play a significant role in our decision." (Reporting by Euan Rocha; Editing by Bernard Orr)