A federal court has vacated a 2021 settlement that awarded more than $9 million to Pennsylvania landowners that alleged underpayment of royalties by Chesapeake Energy Corp. 

Chesapeake rig

The 2021 settlement, filed in the U.S. Bankruptcy Court for the Southern District of Texas, was reached following Chesapeake’s Chapter 11 bankruptcy reorganization.

Lessors argued that the third-largest publicly traded U.S. natural gas producer chronically failed to honor so-called market enhancement clauses (MEC) in its lease agreements. The MECs prohibited Chesapeake from deducting certain post-production costs from royalty payments.

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