Chesapeake Energy has agreed to end an on-going federal class-action battle over natural gas royalties with Pennsylvania leaseholders for $7.75 million, pending the state’s attorney general dropping an unfair-trade action in state court, according to Platts.

Chesapeake agreed to set up a fund to pay around 10,000 leaseholders to make amends for deductions from their royalty checks for post-production processing and pipeline costs, deductions that in some months left the leaseholders with negative balances. The fund, which would pay class action lawyers up to one-third of the settlement amount, would recoup an estimated 8% of post-production payments for the leaseholders if its approved.

Additionally, the settlement would also give leaseholders an option to change their royalty agreements.

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