Chesapeake Energy to challenge $765,000 fine

DENVER -- A federal agency has fined Chesapeake Energy Corp. $765,000 over accusations that it knowingly misstated sales volumes on its oil and gas royalty reports.

Chesapeake spokesman Jim Gipson said Tuesday the company plans to request a hearing on the penalty and doesn't believe it willfully submitted inaccurate reports.

Companies with federal oil and gas leases pay royalties on the minerals they recover. The Department of the Interior's Office of Natural Resources Revenue says that during an audit that started in late 2009, Chesapeake was ordered to report additional volumes on royalty reports for a lease in Oklahoma.

Agency officials say that after the issue was eventually corrected, the inaccurate reporting resumed, despite repeated warnings.

Gipson says the assessment at issue concerns the reporting of payments totaling less than $500.