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6/14/2012
Hydrofracking Update: Leases Can Be Renegotiated In NYS
New York State Attorney General Eric Schneiderman has worked out a deal with hydrofracking company Chespeake-Appalachia, where over 4400 leases that were signed several years ago by Chesapeake-Appalachia and other fracking companies, can be re-negotiated.

Attorney General Eric Schneiderman maintains this will allow landowners to have contracts that will be fairer to the property owners.

Schneiderman reports that Chesapeake has agreed that landowners with leases that were extended as a result of the Department of Environmental Conservation's (DEC) environmental review into high-volume hydraulic fracturing, or "fracking," have the right to negotiate leases with other gas companies for more favorable environmental or financial terms, and that Chesapeake will either match those terms or release the landowners’ original lease. The agreement includes leases which have expired or will expire prior to December 31, 2013.

Terms of the Attorney General's agreement with Chesapeake include:

• Chesapeake will not use the Environmental Review by the DEC as a reason to extend any leases expiring after December 31, 2013;
• Chesapeake will release leases that have been extended using only the Extension of Term where a blank has been left for the negotiated factor. Some of the contracts had blanks in them where a monetary amount should have been;
• All other landowners, except those extended by an Extension of Term provision, with leases having expired, or expiring on or before December 31, 2013, have the right to negotiate bona fide offers from other companies; Chesapeake will then either match the new offer, or release their lien;
• Chesapeake will still be allowed to extend leases that have an Extension of Term provision if it does not contain any blanks and has not yet expired;
• Chesapeake will make quarterly reports to the Office of Attorney General on the number of leases it has renewed, matched and released;
• Number of Leases to be released outright: 50 (8,604 acres);
• Leases subject to being matched: 4,365 (255,579 acres); and
• Leases with the option to be extended by Chesapeake: 1,865 (96,524 acres).

According to the Attorney General’s office, most of the leases are in Broome and Tioga Counties. Officials say Chesapeake Appalachia will have to pay $250,000 for the cost of the state’s investigation.
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