By Edward McAllister
NEW YORK, Sept 4 (Reuters) - 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 agreement.
“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.
Chesapeake had been appealing a decision by a federal court in New York state that ruled in November the company could not use a state ban on high volume hydraulic fracturing, known as fracking, 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 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 huge debt.