In April we learned that Range Resources set aside $35 million for the Oklahoma royalty lawsuit. That wasn’t quite enough. They will need another $52.5 million.
The memorandum of understanding, which is expected to result in the execution of a definitive settlement agreement provides for a cash payment to the class in the amount of $87.5 million in exchange for full release of all claims regarding the calculation, reporting and payment of royalties from the sale of natural gas and its constituents for all periods prior to May 31, 2013. As previously disclosed in the Company 10-Q for the first quarter 2013, the Company accrued $35 million for this litigation in the first quarter of 2013, therefore the settlement will result in an incremental charge of $52.5 million in the second quarter of 2013. LINK
In 2010, Range settled with royalty owners in the Marcellus.
The proposed agreement would give landowners who leased property to Range Resources an immediate $1.75 million. The exact payout after that isn’t known because it depends on variables such as gas prices and other costs, but the settlement sets the amount at $28 million, with about $7 million of that going to attorneys’ fees.
{ 3 comments… read them below or add one }
what did Range actually do? underpay landowners ? in what way? here in Pa., the gas companies take out up to 50 % in production costs off the top and the landowners are left with smaller royalties that amount to less than 12.5 % ! glad to see they got stuck with millions in back payments…
From the link above:
Range Resources sets aside $35 million for Oklahoma royalty lawsuit
A class-action lawsuit in Oklahoma that seeks $160 million in alleged royalty underpayments from Range Resources led the Fort Worth-based oil and gas producer to book $35 million in potential expenses during the first quarter, according to a Securities and Exchange Commission disclosure today. “While we believe we have strong defenses to the claims made in this lawsuit,” Range said in its filing, it concluded that amount was appropriate “given our evaluation of the law in Oklahoma, the outcomes in similar litigation and our assessment of the current status of the litigation.” Range also said it has appealed a Feb. 19 court ruling certifying a class.
Deductions for post-production expenses “by third parties who transport and process natural gas production” form the basis of the suit, the company said in the filing. Range said that while it believes that “current case law in Oklahoma … allows operators to deduct value-enhancing costs for treating, compression and other post-production expenses incurred to increase the value of a marketable product,” the extent of the deductions could be something a judge or jury must determine. Range generally sells its Oklahoma natural gas production to third parties “which, in many cases, do transport and process the gas,” it said. Range Resources-Midcontinent, the subsidiary involved, Range said, “has substantially complied with its royalty payment obligations under its leases and we therefore intend to vigorously defend this litigation.”
— Jim Fuquay
Read more here: http://blogs.star-telegram.com/barnett_shale/2013/04/range-resources-sets-aside-35-million-for-oklahoma-royalty-lawsuit.html#storylink=cpy
With leaders like Range Resource’s General Counsel David Poole would you expect anything less. “I are a lawyer” http://www.youtube.com/watch?v=yxnO92j15ZQ