Chesapeake has made land leasing the core of its business model. A Morningstar Inc. analysis shows that it spent $31.2 billion to get drilling rights over the last 15 years. In comparison, Exxon, which had 2011 revenue 35 times larger than Chesapeake's, spent $27 billion. "We believed that the winner of these land grabs would enjoy competitive advantages for decades to come as other companies would be locked out of the best new unconventional resource plays in the U.S.," the company wrote in its 2012 Securities and Exchange Commission filing.
A Reuters analysis of hundreds of internal Chesapeake emails and thousands of pages of documents showed the company is secretive about its leasing tactics, which some of its own contractors find dubious. "What emerged were approaches to leasing property that land brokers, land owners and lawyers say push ethical and legal limits. Chesapeake has unilaterally altered or backed out of leases. And in Texas and at least three other states, it has exploited little-known laws to force owners to hand over drilling rights and sometimes forfeit profits," Reuters reports. That apparently refers to forced-pooling laws, which allow oil and gas companies compensated access to the resources underlying land of owners who don't want to lease but are largely surrounded by those who have. (Read more)