(WBNG Binghamton) Attorneys confirm Chesapeake Energy plans to walk away from some leases in Broome and Tioga counties after two-year legal battle.
The company had leased land in the Southern Tier at low prices before the Marcellus Shale became valuable with the advent of high-volume hydraulic fracturing.
Some land-owners demanded an increase in their leases after the end of their term, while others wanted to leave their lease completely.
Chesapeake wished to continue the leases at the same value arguing the delay of the state's SGEIS report prevented them from doing work, a situation known as a "force majeaur" in legal terms.
In June 2012, the state attorney general ordered Chesapeake to renegotiate leases with more than 4,400 landowners in New York.
Dan Fitzsimmons, president of the Joint Landowners Coalition of New York, said that the state did not follow through with their demand.
Instead, 200 of the cases joined filed a lawsuit with attorneys from Levene, Goulden and Thompson.
Fitzsimmons said the previous contracts were unfair, and imposed harsh clauses on landowners.
"It's a win for landowners because now they can get landowner leases and the protections they need to have, that's the most important," Fitzsimmons said.
Attorneys from the law firm said they have reached a settlement where Chesapeake will walk away from the 200 leases.
Attorney Scott Kurkoski said, "the deal is a done deal," but it will not go through until later next week.
He did not elaborate further.
Chesapeake is not walking away from landowners who have not yet filed lawsuits, according to those involved in the case .
The 200 landowners will be able to shop their land to other gas companies if they wish, but the JLCNY said the continued moratorium in New York is making the state less attractive for gas leases.
"The effect that we've seen now is that we see a tremendous boom across the border that a lot of us can see from our properties," Fitzsimmons said. "We haven't had those benefits here."
Opponents of fracking also agreed the settlement is good news.
Isaac Silberman-Gorn, from Citizen Action, said the decision for Chesapeake to abandon the leases is good news because it empowers some landowners who may no longer be interested in gas drilling.
"Chesapeake was holding these landowners hostage, not really giving them a choice," Silberman-Gorn said.
Chesapeake Energy had no comment for this story.