AP reports that a West Virginia jury has awarded $405 million to plaintiffs in a class-action lawsuit that accused a subsidiary of Oklahoma City-based Chesapeake Energy of failing to make proper payments on natural gas royalties. Over two-thirds of the amount awarded are punitive damages.

The case focused on post-production expenses deducted from payments due royalty owners. The lawsuit said deductions were excessive.

Chesapeake bought Columbia Natural Resources of Charleston, West Virginia, in November 2005 for $2.2 billion. It might be a bad move for an out-of-state firm to buy a West Virginia firm, as I noted in this short piece about punitives[on p. 118 of the publication].