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U.S. Justice Department ends probe of Chesapeake mineral royalty practices
November 2, 2017 / 6:39 PM / 18 days ago

U.S. Justice Department ends probe of Chesapeake mineral royalty practices

(Reuters) - The U.S. Department of Justice ended a three-year probe of Chesapeake Energy Corp’s (CHK.N) royalty payment and land purchase practices without taking action, the natural gas producer said in a securities filing on Thursday.

The department subpoenaed documents from the company in 2014 after dozens of landowners and others accused it of short-changing them on royalties for natural gas and other fuels.

Chesapeake said in the filing with the U.S. Securities and Exchange Commission that the Justice Department advised it on Sept. 19 that it had concluded the probes. The company remains in discussions with the U.S. Postal Service and various states, which separately sought information about the practices, the filing said.

A spokesman for the Oklahoma City, Oklahoma, company declined to comment further.

Chesapeake shares were off 6.6 percent at $3.70 in afternoon trading after the company said third-quarter revenue declined 14.6 percent and projected flat-to-modest production growth in 2018.

Last month, a U.S. District Court in Akron, Ohio, lent support to the company’s royalty deductions on contracts in the state, dismissing a lawsuit by landowners and others saying Chesapeake should not have charged post-production costs against payments to them. The ruling halted a number of cases against Chesapeake but left others intact.

Reporting by Gary McWilliams; Editing by Lisa Von Ahn

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