ALBANY, N.Y. (AP) - A subsidiary of Chesapeake Energy Corp., the country's second-largest natural gas producer, has agreed to let more than 4,400 New York landowners renegotiate old gas leases for more favorable financial and environmental terms, state Attorney General Eric Schneiderman said Thursday.
Chesapeake Appalachia also agreed to pay $250,000 to cover the state's investigation costs under the agreement.
Chesapeake had tried to extend the leases in 2009, claiming the state's de facto moratorium on shale gas development since it started an environmental review in 2008 constituted an uncontrollable event that allows for a lease extension if an "act of god" or unforeseen circumstance prevents drilling.
Schneiderman investigated after receiving complaints from landowners. The leases were signed long before the shale gas boom that began in Pennsylvania in 2007 boosted land prices from as low as $2-$3 an acre to more than $1,500 an acre. Many landowners today are also writing extensive environmental protections into leases.
In the settlement, Chesapeake admits no wrongdoing.
The state has not permitted shale gas development using horizontal drilling and high-volume hydraulic fracturing since it began an environmental review in 2008.