Chesapeake Energy Chief Executive Officer Aubrey McClendon said a $404.3 million jury verdict against the company and others has not only caused Chesapeake to put its plan to build a regional headquarters in Charleston on hold, it has also prompted him to reconsider the company’s exploration program in West Virginia.

On Jan. 27 a Roane County jury said Chesapeake Energy, Columbia Natural Resources and NiSource Inc. had cheated 8,000 landowners out of $134.3 million in natural gas royalties. The jury also said the companies had committed fraud and awarded the landowners $270 million in punitive damages. “We’re just finishing up the first large three-dimension seismic survey ever shot in West Virginia which, ironically is in Roane County,” McClendon said. “So we’re kind of scratching our heads about what to do with it. “We own most of this acreage already — it’s called ‘held by production by shallower wells,’” he said.

“So in terms of timing, if we want to sit on this for the next 20 or 30 years, we can certainly do that. “I’m not willing at this point to commit to a big new exploration program in the state of West Virginia when I don’t know how the leases that I’ve inherited are going to be interpreted by judges across the state. “We’ve got to get definition on that and I’ve asked Gov. (Joe) Manchin to get out in front when the bill hits the Legislature and we’ve asked legislative leaders to support it as well,” McClendon said. The industry bill, “The Fair Production Royalty Payments Act,” is expected to be introduced this week. Bray Cary, chief executive officer of West Virginia Media Holdings, interviewed McClendon last Monday at Chesapeake’s headquarters in Oklahoma City. The interview was aired Sunday on Decision Makers on WOWK-TV and other West Virginia Media Holdings stations.

complete this report click here