The Fayetteville Shale Lawsuit was filed because of allegations of environmental damage and health hazards caused by natural gas extraction and production from the Fayetteville Shale formation in Arkansas.
The lawsuit has highlighted the complex interplay between energy companies, regulatory bodies, and affected residents, raising questions about industry accountability and the need for stricter environmental safeguards.
As a seasoned TORT attorney with over ten years of experience helping victims get compensated for damages, I aim to shed more light on the multifaceted nature of this case and ensure that affected residents get settlements for injuries.
- The Fayetteville Shale Lawsuit is a case filed on allegations that Southwestern Energy Company (SEECO) was not paying royalties to royalty owners in the Fayetteville shale area.
- Southwestern Energy Company faced a $45 million preliminary settlement for improperly profiting from natural gas production during the Fayetteville Shale boom.
- The Arkansas Oil and Gas Commission launched investigations after the legal proceedings sparked worries about the effects of oil and gas production in the area.
Table Of Contents
- Quick Summary
- What Is the Fayetteville Shale Lawsuit?
- Class Action Lawsuit in Arkansas
- Defendants and Allegations
- Arkansas Oil and Gas Commission Investigation
- Side Effects of Fayetteville Shale Gas Extraction and Production
- Historical Context of Southwestern Energy Company
- What Are the Potential Settlements?
- Get a Free Fayetteville Shale Lawsuit Evaluation With Our Lawyers
What Is the Fayetteville Shale Lawsuit?
The Fayetteville Shale Lawsuit is a case filed on allegations that Southwestern Energy Company (SEECO) was not paying royalties to royalty owners in the Fayetteville shale area.
The allegations claimed SEECO was taking gas from wells without paying royalties and also reporting false and misleading information on royalty payments.
The lawsuit was eventually certified as a class action, and a preliminary settlement of $45 million was reached.
Class Action Lawsuit in Arkansas
A class action lawsuit was filed in Arkansas against three energy companies: BHP Billiton Petroleum entities, Chesapeake Operating Inc., and Clarita Operating LLC.
The suit alleged that their operations, particularly certain injection wells near Greenbrier and Guy, AR, had caused thousands of earthquakes in central Arkansas, damaging residents in Faulkner County and neighboring counties.
Emerson Poynter LLP’s law firm served as the legal representative for the plaintiffs, Sam and April Lane of Greenbrier, AR.
The action sought millions of dollars in damages for property damage, mental distress, earthquake insurance-related losses, and loss of fair market value of real estate.
Two injection wells have now been closed as part of an investigation by the Arkansas Oil and Gas Commission into the area’s increased seismic activity. The defendants have not yet commented on the lawsuit.
Defendants and Allegations
The class action lawsuit filed against BHP Billiton Petroleum entities, Chesapeake Operating Inc. and Clarita Operating LLC, alleged these companies operate specific injection wells near Greenbrier and Guy, AR, responsible for causing thousands of earthquakes in central Arkansas.
The allegations have led to damages suffered by residents in Faulkner County and surrounding counties, including Conway, Van Buren, Cleburne, Perry, and White.
The plaintiffs, represented by Emerson Poynter LLP on behalf of Sam and April Lane of Greenbrier, AR, seek millions of dollars in damages for various issues.
Arkansas Oil and Gas Commission Investigation
To determine what caused the increased seismic activity in the central Arkansas region, the Arkansas Oil and Gas Commission opened an inquiry.
Concerns expressed by locals and environmentalists over a probable connection between local oil and gas operations and the occurrence of thousands of earthquakes served as the reason for the inquiry.
As part of the investigation, two drilling waste injection wells were shut down pending further examination.
The Commission aimed to uncover any connections between these wells and the seismic events, which have caused damage to properties and emotional distress to residents in Faulkner County and neighboring areas like Conway, Van Buren, Cleburne, Perry, and White.
Related Article: Oil Field Accident and Injury Lawsuit Update
Side Effects of Fayetteville Shale Gas Extraction and Production
Research strongly suggests potential environmental public health risks associated with the Fayetteville Shale gas development.
Common examples of these health risks include air pollution, increased risk of morbidity and mortality, and water contamination .
Another study strongly suggests that the Fayetteville Shale Gas exploration may have caused habitat loss, loss of organisms, and fragmentation because of hydraulic fracturing and horizontal drilling within the area .
Read Also: Gas Field Worker Injury & Accident Lawsuit
Historical Context of Southwestern Energy Company
Southwestern Energy Co. has a significant historical context that predates the current class action lawsuit. Nearly two decades ago, the company faced a similar class action case with severe financial implications when it was headquartered in Fayetteville.
In 2000, the Arkansas Supreme Court affirmed a decision in Hale v. Seeco Inc., where Southwestern royalty owners were awarded over $109 million.
As a result, the gas company faced challenges in recovering settlement costs and continuing exploration and production projects.
Following the judgment, Southwestern moved its headquarters to Houston and then invested $11 million to purchase 343,000 undeveloped acres in north central Arkansas that kicked off the infant development of the Fayetteville Shale play.
What Are the Potential Settlements?
The potential settlements include $45 million, which was reached between Conway County resident Eldridge Snow and other royalty owners and SEECO, subject to final approval in Conway County Circuit Court.
Other settlements to be paid by SEECO include a sum of $30 million, lower deductions from future royalty payments at an estimated value of $15 million to property owners, and a sum of up to $150,000 for a settlement administrator.
If finally approved, these potential settlements will allow for immediate recovery and promote judicial efficiency, benefiting both parties.
“How significant it is in the history of shale exploration: Prior to the Fayetteville Shale, only the Barnett was commercially producing. The Fayetteville Shale proved the Barnett wasn’t a fluke because it proved another shale was productive.”
– George Sheffer, Southwestern Energy’s Vice President of Operations for the Fayetteville Shale
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How Might These Lawsuits Impact the Relationship Between Property Owners and Natural Gas Companies in the Future?
These lawsuits might negatively impact the relationship between property owners and natural gas companies in the future because of the perceived lack of trust. Also, greater clarity will have to be provided once factors such as royalties and deductions come up.
What Legal Issue Is at the Heart of the Fayetteville Shale Lawsuit?
The legal issue at the heart of the Fayetteville Shale lawsuit is Southwestern Energy’s $45 million compensation for unpaid gas royalties. This settlement is being contested in a different federal class action case.
Get a Free Fayetteville Shale Lawsuit Evaluation With Our Lawyers
If you believe you have been impacted by the events caused by the energy companies in the Fayetteville Shale or have experienced improper royalty payouts, contact Schmidt & Clark, LLP immediately to get a free case evaluation.
Our team of experienced lawyers will help you file a Fayetteville Shale lawsuit to get the justice you deserve.
We will need you to help us by providing medical records and all relevant information concerning this event and the type of injuries you sustained, as this will help us ensure you get fully compensated for damages.