You really have to read this entire article to see all the devious Enron-ish ways Chesapeake (which is 3rd biggest energy company behind Exxon-Mobil and ConocoPhillips) and NiSource tried to game the system while screwing royalty owners out of their money. It's also notable that it isn't just individual land owners, but also businesses.

The Roane County Circuit Court jury found in the case that a gas producer called Columbia Natural Resources LLC — which was once owned by NiSource, but now belongs to Chesapeake — underpaid royalty owners by $134 million and deserved to pay $271 million more in punitive damages.

Of the nearly 9,000 plaintiffs in the class, about 150 are businesses. Among them are major landholding interests such as Cotiga Land Co., Dingess-Rum Properties, Horse Creek Coal Land Co., Horse Creek Coal Co. (which is unrelated to Horse Creek Coal Land), the Klosterman Trust and D.C. Malcolm Inc....

The suit, filed in 2003, alleges that CNR operated wells removing gas under leases with the plaintiff landowners, but did not properly inform them of the true value of gas being extracted.

It also maintains that NiSource forced CNR to sell billions of cubic feet of natural gas in advance of NiSource’s 2000 takeover of CNR parent company Columbia Energy Group. The advance sale generated money needed to help finalize the transaction, according to the suit. ..

NiSource got $400 million upfront, which it used to pay off Columbia Energy debts, in part to gain approval for the deal from the federal Securities and Exchange Commission.

That deal also was used to provide $150 million in “golden parachute” retirement benefits to a handful of Columbia Energy officers.

During the trial, two former CNR presidents testified they were forced, under orders from NiSource, to sell West Virginia gas rights to a company called Mahonia II, based in the Jersey Islands, off the coast of France. That deal involved payment for anticipated future gas production.

“If NiSource and Columbia Natural Resources wanted to engage in speculative Enron-type deals, they had every right to do so, but not on the backs of the royalty owners,” said Segal.

“If they can find a way to deprive regular people who have been cheated of a way to get to court then Enron-type scandals will continue to flourish,” Segal said.

P.S. As expected, Chesapeake, the loser, threatened retaliatory action against North Carolina in the form of business.

Chesapeake Energy Chief Executive Officer Aubrey McClendon said a $404.3 million jury verdict against the company and others has not only caused Chesapeake to put its plan to build a regional headquarters in Charleston on hold, it has also prompted him to reconsider the company’s exploration program in West Virginia. On Jan. 27 a Roane County jury said Chesapeake Energy, Columbia Natural Resources and NiSource Inc. had cheated 8,000 landowners out of $134.3 million in natural gas royalties. The jury also said the companies had committed fraud and awarded the landowners $270 million in punitive damages. “We’re just finishing up the first large three-dimension seismic survey ever shot in West Virginia which, ironically is in Roane County,” McClendon said. “So we’re kind of scratching our heads about what to do with it. “We own most of this acreage already — it’s called ‘held by production by shallower wells,’” he said. “So in terms of timing, if we want to sit on this for the next 20 or 30 years, we can certainly do that. “I’m not willing at this point to commit to a big new exploration program in the state of West Virginia when I don’t know how the leases that I’ve inherited are going to be interpreted by judges across the state. “We’ve got to get definition on that and I’ve asked Gov. (Joe) Manchin to get out in front when the bill hits the Legislature and we’ve asked legislative leaders to support it as well,” McClendon said. The industry bill, “The Fair Production Royalty Payments Act,” is expected to be introduced this week.