NEW YORK, NY — “Chesapeake Energy Corp. (CHK), facing claims by mineral rights holders in multiple states over canceled oil and gas lease offers, lost a bid to reverse a $19.7 million judgment to a Texas lease owner.
Chesapeake wrongfully canceled an agreement to buy drilling rights held by the family-owned Peak Energy Corp., the U.S. Court of Appeals in New Orleans ruled. The panel today upheld a 2011 decision by U.S. District Judge John Ward in Marshall, Texas, awarding Plano, Texas-based Peak $19.7 million.
Peak claimed Oklahoma City-based Chesapeake breached a contract and abandoned the deal as gas prices plummeted. Ward said a letter of intent signed by both sides was a valid contract. Chesapeake asked the court to reverse Ward and find that a letter of intent isn’t a binding contract.
‘The absence of closing documents does not necessarily make an agreement nonbinding,’ the appeals court said. ‘This agreement is enforceable.’”
— Margaret Cronin Fisk, Bloomberg