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THE  PROPUBLICA  ARTICLES

12/14/2014

 
As those who have attended our town hall meetings for royalty owners know, we all owe a debt of gratitude to ProPublica, the independent, non-profit investigative journalism organization (www.propublica.org), and to Abrahm Lustgarten, the ProPublica writer who brought to light how Chesapeake solved the financial crisis that it faced from having incurred too much debt to finance its acquisition of leases  by effectively borrowing billions of dollars more, in a series of transactions structured "sales" of its gas gathering systems, all at the expense of its royalty owners.  

For those who have not yet read it, the article titled "Chesapeake Energy's $5 Billion Shuffle," published on March 13, 2014, available here, provides a good introduction as to why the Marcellus Royalty Action will be focusing on the abuse of monopoly pricing power and restraint of trade inherent in the terms and structure of the Chesapeake Midstream/Access Midstream transactions, and resulting gas gathering agreements. 

An earlier article by Lustgarten, "Unfair Share: How Oil and Gas Drillers Avoid Paying Royalties," published on August 13, 2013, available here, first focused attention on Chesapeake's royalty payment practices in Bradford County.

A more recent article by Lustgarten, "Chesapeake Energy Faces Subpoena On Royalty Payment Practices," published on November 14, 2014, available here, explains how years of complaints by Bradford County landowners and the ProPublica investigation have resulted in investigations of Chesapeake, and the issuance of subpoenas to Chesapeake by the U.S. Department of Justice and several states, as disclosed by Chesapeake Energy in its Form 10-Q report filed with the SEC on November 6, 2014. 

We highly recommend these articles to all Chesapeake royalty owners who have not yet read them. 




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