Plaintiffs’ attorneys seeking class action status for lawsuits that allege Virginia producers have unlawfully taken coalbed methane gas from landowners Monday filed additional complaints against leading Virginia producers Consol Energy Inc., its CNX Gas Corp. and EQT Corp. This time the companies are alleged to have sold landowners’ gas at below-market prices and improperly deducted processing and transportation costs.

The lawsuits against Consol/CNX and EQT have different plaintiffs but are almost identical. According to the complaint against CNX, the company is alleged to have “failed to pay true royalties owed to plaintiff and the class members, and plaintiff and the class members have been and continue to be damaged in an amount to be proven at trial.”

The complaint alleges that CNX “improperly used gas prices that were less than fair market value…” in part due to “the sale of gas by CNX to affiliates on a non-arm’s length basis.”

It further alleged that the company has a duty to market gas at no cost to plaintiffs. “CNX must, among other things, place the gas in a marketable condition and transport the gas to the point of sale and must bear all of the costs for same. The leases do not expressly state that these costs may be deducted from royalty payments.”

Improper royalty deductions taken by the producers for costs after the wellhead include those for gathering, compression, dehydration, treating, separation, processing and/or transportation to the point of sale, according to the complaints.

The lawsuits were filed in U.S. District Court for the Western District of Virginia. The lead plaintiff in the lawsuit against Consol/CNX is the Texas-based Oryn Treadway Sheffield Jr. Trust. The lead plaintiffs suing EQT are descendants of William Baker of Virginia, who bequeathed a 1,000-acre estate.

“This case was just filed and we have not had a chance to review it, so we cannot comment,” a Consol spokesperson said. EQT did not immediately respond to a request for comment.

When the earlier complaints were filed Glubiak told NGI there would be more to come that would be tailored to different circumstances and also seeking class action status (see Daily GPI, June 21).

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