Important Update: The Settlement Administrator began issuing Distribution Checks to eligible Class Members on October 21, 2022.
What is this lawsuit about?
Plaintiff Bigie Lee Rhea filed this class action on behalf of himself and other royalty owners with interests in Oklahoma wells operated by, or the production from which was sold by, Defendant. He sought to recover for the alleged underpayment of royalties by Defendant, contending that Defendant underpaid royalties due to its failure to obtain the best price available for the gas it sold. More specifically, Plaintiff argued that Defendant breached its implied duty to market the gas and obtain the best price available by: (1) marketing the gas under a “keep whole” contract which did not capture the value of the natural gas liquids (“NGLs”) included in the production, and (2) paying excessive fees to the midstream processor even after the keep whole contract was modified to capture the value of the NGLs. Plaintiff also asserted that Defendant failed to pay royalty on fuel gas used by the midstream processor in performing midstream services, contrary to explicit lease provisions included in most, but not all, of the affected leases.
Defendant denies any and all liability related to Plaintiff’s allegations and further states that neither Plaintiff nor any of the Class Members are entitled to the relief sought in the Litigation and further states that it would not be appropriate to award any type of damages to the Class Members.
Who is included in this lawsuit?
The Settlement Classes consists of the following individuals and entities:
All non-excluded persons or entities with royalty interests in wells upstream of a processing plant with a Btu content of 1050 or higher and where Apache Corporation marketed gas from the well pursuant to the terms of the January 1, 1998 contracts between Transok, Inc. and Apache Corporation and/or the July 1, 2011 contract between Enogex Gathering & Processing LLC and Apache Corporation on or after January 1, 2000.
Fuel Gas Subclass: All non-excluded persons or entities included in the class who are also entitled to share in royalty proceeds payable under any lease that contains an express provision stating that royalty will be paid on gas used off lease premises (a Fuel Gas Clause) as indicated in the far right Column of Exhibit 6 to the Settlement Agreement.
The persons excluded from the Class and Fuel Gas Subclass are: (1) agencies, departments, or instruments of the United States of America and the State of Oklahoma; (2) publicly traded oil and gas exploration companies and their affiliates; (3) persons or entities that Plaintiff’s counsel is, or may be, prohibited from representing under Rule 1.7 of the Oklahoma Rules of Professional Conduct; and (4) officers of the Court involved in this action.
What does the Settlement provide?
In consideration of the Settlement, Defendant has agreed to pay $25,000,000.00 in cash. See the Settlement Agreement for full details.