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Wall Street Journal Interviews Saunders For Article “Drilling Ban Hits Leases”

The Wall Street Journal published an article reporting on litigation filed in New York State by several hundred landowners seeking to void oil and gas leases they entered into with Chesapeake Energy and asked Steve Saunders to comment on the case and the legal underpinnings of the plaintiffs’ argument. In the article, Saunders explained that the lessors were arguing that the leases had expired by their terms because Chesapeake did not take action to develop the leasehold interests under the time limits established in the leases. The lessee countered that a State-imposed ban on natural gas drilling imposed by the Governor constituted an “Act of God” under a contractual provision in the leases known as “Force Majeure” which should extend the time for Chesapeake to satisfy its contractual obligations to develop the oil and gas reserves under the landowners’ properties. Saunders explained that the defense Chesapeake asserted to the lessors’ complaint was based upon an attempt to expand the traditional understanding of the concept of force majeure to include governmentally created road blocks as opposed to natural disasters that prevent a party from performing under a contract. In a subsequent Wall Street Journal article by the same reporter, a settlement of an action brought against Chesapeake by the New York State Attorney General served to terminate some of the plaintiffs’ leases and required Chesapeake to renegotiate other leases involved in the private lawsuit.