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Major joins call for investigation

February 26, 2014

HARRISBURG, PA — Rep. Sandra Major has joined three of her colleagues in calling for an investigation into Chesapeake Energy Company’s practice of deducting gas royalty payments for post-production costs.

The four sent a letter to Pennsylvania Attorney General Kathleen Kane. Rep. Garth Everett said, “An investigation into post-production royalty deductions is needed, as many land owners in our region have seen, and are seeing large amounts of money being taken out of royalty checks, and in some cases, consuming the entire check,” said Everett. “This, and other practices, are in violation of leases signed in good faith by the owners. This is plain wrong and needs to be addressed.”

Everett said many owners signed leases that specifically precluded those deductions, not realizing that those costs would be subtracted royalties under other confusing lease terms. He said his House Bill 1684, co-sponsored by Major, Matt Baker and Tina Pickett, is the remedy for the issue, but it is currently before the House Environmental Resources and Energy Committee, which is expected to conduct a public hearing.