Pennsylvania sues Chesapeake over ‘deceptive’ leases

OKLAHOMA CITY (AP) – Pennsylvania’s attorney general is suing one of the nation’s largest producers of natural gas over claims it cheated thousands of landowners who signed drilling leases with the company.

The lawsuit alleges that Oklahoma City-based Chesapeake Energy Corporation tricked landowners into signing one-sided leases in the early years of the Marcellus Shale drilling boom and then improperly deducted certain post-production expenses from landowner royalties.

The lawsuit seeks restitution and civil penalties. It was filed Wednesday in Bradford County.

A Chesapeake spokesman says Attorney General Kathleen Kane’s allegations are baseless and that the company will "vigorously contest" the lawsuit.

Landowners have been complaining for years about Chesapeake’s business practices.

A settlement agreement between Chesapeake and thousands of landowners is pending. Kane is seeking to modify the civil settlement so that her own lawsuit can go forward.