Chesapeake Energy Corporation (NYSE:CHK), which has wrongfully cancelled multiple oil and gas lease offers, lost a bid to overturn a $19.7 million award to Plano, Texas-based Peak Energy. Chesapeake had asked the Court of Appeals in New Orleans to cancel the order to Peak Energy in July.
The panel, today, upheld last year’s judgement by Judge John Ward in Marshall, Texas. Chesapeake Energy Corporation (NYSE:CHK) had abandoned the deal with the family-owned Peak Energy to purchase the energy rights, so Judge Ward had awarded Peak $19.7 million. But the lawyers of Chesapeake Energy were telling a different story. They said the deal with Peak Energy was incomplete and non-binding, so they had asked the court the reverse the judgement.
“The absence of closing documents does not necessarily make an agreement nonbinding,” the appeals court said. “This agreement is enforceable.”
America’s second-largest gas producer had also asked the court to cancel another order by Judge Ward. According to the order, Chesapeake was required to pay the landowners a difference of $12,000 per acre between the offer price and lease value of the land when it withdrew its bid.
Chesapeake Energy Corporation (NYSE:CHK) is facing lawsuits by hundreds of landowners across several states, including Texas, Michigan, and Pennsylvania. The mineral rights holders claimed that Chesapeake offered them record high prices, but it walked away from the deal when the prices of natural gas began to decline and the contract was no longer advantageous to it.
Chesapeake Energy Corporation (NYSE:CHK) recently announced plans to sell off most of its assets in Texas for $6.9 billion in an attempt to repay the debts and narrow the funding gap. Its market value has plunged almost 60 percent in the past year because of falling gas prices and controversies around CEO ‘s conflict of interest between his personal financial endeavors and corporate duties. The oil giant is now surrounded by gloom on all sides.
Chesapeake Energy Corporation (NYSE:CHK) shares plunged 1 percent today to $19.89 in New York trading.