Chieftain Royalty Company v. XTO Energy Inc.
Chieftain-XTO Settlement
CIV-11-29-KEW

Frequently Asked Questions

 

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  • You received a Notice because Defendant's records show payment to you for royalties on natural gas and its constituents (including helium, reside gas, natural gas liquids, nitrogen and condensate) produced from well(s) in Oklahoma that Defendant operated or, as a non-operator, Defendant separately marketed the gas and its constituents from May 1, 2002 through production month May 31, 2017.

  • The Court issued a Notice because you have a right to know about the proposed Settlement in this class action lawsuit and what your options are before the Court decides whether to approve the Settlement. The Notice explains the lawsuit, the Settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them.

    United States District Court Magistrate Judge Kimberly E. West, of the United States District Court for the Eastern District of Oklahoma, is in charge of this case, which is called Chieftain Royalty Company v. XTO Energy Inc., Case No. CIV-11-29-KEW. The entity who filed the lawsuit, Chieftain Royalty Company, is called the "Plaintiff" and the company that was sued, XTO Energy Inc., is called the "Defendant."

    The Notice directs you to not contact the Court. Please contact the Settlement Administrator if you have questions that are not answered here.

  • The Plaintiff filed a class action lawsuit alleging that Defendant underpaid royalties to royalty owners for gas and its constituents on Oklahoma wells where Defendant (or Defendant's predecessor or affiliate) is or was the operator or, as a non-operator, Defendant separately marketed the gas and its constitutents. Claims include, but are not limited to, allegations that Defendant:

    • made various deductions and reductions from royalty payments that should not have been made by deducting direct and indirect fees for marketing, gathering, transporting, compression, dehydration, processing, treatment, and other similar services before the gas and its constituents (including helium, residue gas, natural gas liquids, nitrogen, and condensate) was a “marketable product”;
    • did not pay royalty on gas that was used off the lease premises or in the manufacture of products;
    • did not pay royalty on drip condensate that dropped out of the gas stream; and
    • failed to provide to royalty payees all of the information required by statute.


    Defendant expressly denies all allegations of wrongdoing or liability with respect to the claims and allegations in the Litigation. The Court has made no determination with respect to any of the parties’ claims or defenses asserted by any of the parties to the Action. Instead, the parties have entered into a Settlement Agreement that was preliminarily approved by the Court on January 18, 2018.

  • A preliminary Class Well list is available on the Important Documents page. The preliminary Class Well list is subject to update and revision.

  • All parties to this Settlement have determined that further prosecution and defense of the lawsuit would be protracted and expensive and, considering the uncertainty and inherent risk of such litigation, determined that it is desirable to compromise and settle all claims arising from the lawsuit. All parties have elected to settle their differences under the terms of the Settlement Agreement rather than litigate their respective positions to conclusion.

  • You are a member of the Settlement Class in the Litigation if you are or were a royalty owner in Oklahoma wells where Defendant, including its predecessors or affiliates, is or was the operator or, as a non-operator, Defendant separately marketed gas. Class Claims relate only to royalty payments for gas and its constituents (helium, residue gas, natural gas liquids, nitrogen and condensate) produced from such wells from May 1, 2002 through production month May 31, 2017.

  • Yes.  Excluded from the Settlement Class are:

    1. agencies, departments or instrumentalities of the United States of America and the State of Oklahoma;
    2. publicly traded oil and gas exploration companies and their affiliates;
    3. the claims of royalty owners in Defendant wells gathered by Timberland Gathering & Processing Co. Inc. and processed at the Tyrone Plant that were the subject of the action styled Fankhouser, et al. v XTO Energy, Inc., Case No. CIV-07-798-L USDC WD OK (formerly Beer et al. v XTO), which was previously settled and all claims fully released;
    4. the claims of royalty owners that were previously released by settlement in the case styled Booth v Cross Timbers Oil Co, Case No. CJ-98-016, District Court for Dewey County, OK, which was previously settled and all claims fully released;
    5. persons or entities that Plaintiff’s Counsel are, or may be, prohibited from representing under Rule 1.7 of the Oklahoma Rules of Professional Conduct, including, but not limited to Charles David Nutley and Danny George (who Plaintiff’s Counsel cannot represent because such representation would create a concurrent conflict of interest); and
    6. officers of the Court.
  • The Court designated Chieftain Royalty Company as the Plaintiff and Class Representative for the Settlement Class. The Court appointed Plaintiff's Counsel Nix, Patterson & Roach, LLP; Barnes & Lewis, LLP; and Gunderson Sharp, LLP (n/k/a Rex A. Sharp, P.A. and Gunderson Law, P.C.) as Settlement Class Counsel; and Plaintiff’s Counsel Whitten Burrage; and Richards & Connor, PLLP as liaison local counsel for the Settlement Class. If you want to be represented by your own lawyer, you may hire one at your own expense to represent you in Court.

  • In settlement of all claims alleged in the Litigation, Defendant has agreed to pay $80,000,000.00 in cash (“Gross Settlement Fund”) plus, as a result of this Litigation, Defendant implemented new procedures and policies for calculating and paying royalty with respect to production on Class Wells connected to the Ardmore Loop that Plaintiff estimates and Defendant does not contest resulted in no less than $60,000,000.00 already being paid to Class Members who own a royalty interest in the Class Wells connected to the Ardmore Loop. Defendant has also agreed to continue to implement these procedures and policies with respect to production on Class Wells connected to the Ardmore Loop, which Plaintiff estimates has a net present value of at least $74,000,000.00 over the next ten years (“Future Benefits”).

    In exchange for the payment noted above and other consideration outlined in the Settlement Agreement, the Settlement Class shall release the Released Claims (as defined in the Settlement Agreement available for review and download at www.chieftain-xto.com) it has asserted and pursued against the Released Parties (as defined in the Settlement Agreement). The $80,000,000.00 cash payment, $60,000,000.00 already paid, $74,000,000.00 Future Benefits, and $750,000.00 paid by Defendant for Settlement administration, distribution, and notice costs, is referred to collectively as the “Gross Settlement Value.” The Gross Settlement Value provided through this Settlement is $214,750,000.00. The Gross Settlement Fund, less attorneys’ fees, Litigation Expenses, any Case Contribution Award, and other costs approved by the Court (the “Net Settlement Fund”), will be distributed to Class Members.

    The Court must approve the Allocation Methodology and Initial Plan of Allocation, which describe how Plaintiff's Counsel, with the assistance of the experts and consultants retained, will allocate the Net Settlement Fund to each Class Well and then to the royalty owners in that Class Well. A general description of that process follows.

    Plaintiff's Counsel will first allocate the Net Settlement Fund proportionately to each Class Well with due regard for:

    1. the production marketed by XTO on behalf of itself and/or others;
    2. the amount and date of claimed royalty underpayment to Class Members;
    3. the time period when the claimed underpayment occurred;
    4. the substantial recovery and benefit that royalty owners with Class Wells connected to the Ardmore Loop have already received as a result of this Litigation from Defendant’s implementation of new procedures and policies for calculating and paying royalty with respect to production from those wells and will continue to receive from Defendant’s agreement to continue these procedures and policies in the future; and
    5. the distribution of small amounts that exceed the cost of the distribution.


    Thereafter, subject to approval by the Court, Plaintiff’s Counsel, with the assistance of the experts and consultants they retain, will allocate the Net Settlement Fund to each Class Well proportionately among all Class Members based on their royalty decimal interest in such well using XTO’s approximate July 2017 royalty paydeck data for production month May 2017 (or a relatively recent and available royalty paydeck) or, in the case of Class Wells not currently operated by Defendant, the July 2017 paydeck for production month May 2017 (or other reasonably current and available royalty paydeck) to be obtained from the operator.

    When the Initial Plan of Allocation becomes available, it will be posted on the Important Documents page.

  • If you are a Class Member, you will receive your portion of the Net Settlement Fund in the amount determined under the Initial Plan of Allocation, which will be mailed to you if the Court finally approves the Settlement and the Settlement becomes Final and Non-appealable.

  • Plaintiff's Counsel intends to seek an award of attorneys' fees of 14.9% of the Gross Settlement Value or $32,000,000.00. Plaintiff's Counsel have been litigating this case for over ten years without any payment whatsoever, advancing millions of dollars in expenses. At the Fairness Hearing, Plaintiff's Counsel will also seek reimbursement of the Litigation Expenses incurred in connection with the prosecution of this Litigation and that will be incurred through final distribution of the Settlement in an amount not to exceed $3,250,000.00 to be paid from the Gross Settlement Fund. In addition, Plaintiff intends to seek a Case Contribution Award for representing the Class of 0.1047% of the Gross Settlement Value or $225,000.00.

  • Yes. If you are a Class Member, you may exclude yourself or "opt out" from the Settlement Class by filing a Request for Exclusion with the Court, and mail it to Plaintiff's Counsel and Defendant's Counsel, and the Settlement Administrator, by U.S. certified mail, return receipt requested. The request must include your name, address, telephone number, notarized signature, and state the following:

    1. "I want to exclude myself from the Settlement Class in Chieftain v. XTO Energy Inc., Case No. CIV-11-29-KEW, U.S. District Court for the Eastern District of Oklahoma. I understand that it will be my responsibility to pursue any claims I may have, if I so desire, on my own and at my expense."; and
    2. a description of your interest in Oklahoma wells where Defendant, including its predecessors or affiliates, is or was the operator or, as a non-operator, separately marketed gas, including the well name, well number, county in which the well is located, and the owner identification number.


    Your exclusion request must be filed, served, and received by the Court, Counsel, and the Settlement Administrator no later than March 5, 2018 at 5:00 p.m. (Central Time). Mail exclusion requests to:

    Clerk of the Court
    United States District Court for the Eastern District of Oklahoma
    101 North 5th Street
    Muskogee, OK 74401

    Plaintiff's Counsel
    Bradley E. Beckworth
    Nix, Pattreson & Roach, LLP
    3600 N Captial of Texas Hwy, Suite 250, Building B
    Austin, TX 78746

    Defendant's Counsel
    Jeffrey C. King
    Winstead, PC
    300 Throckmorton, Suite 1700
    Fort Worth, TX 76102

    Chieftain-XTO Settlement
    c/o JND Legal Administration, Settlement Administrator
    P.O. Box 6878
    Broomfield, CO 80021

    You cannot exclude yourself on the website, by telephone, facsimile or by e-mail. If you validly request exclusion or opt out from the Settlement Class, you will not receive any distribution from the Net Settlement Fund, you cannot object to the Settlement, and you will not have released any claim against the Released Parties. You will not be legally bound by anything that happens in this lawsuit.

  • If you remain a Class Member, you may object to the proposed Settlement and any terms thereof. If you wish to object to the Settlement, Allocation Methodology, Initial Plan of Allocation, and/or requests for attorneys' fees or reimbursement of Litigation Expenses or Case Contribution Award to Plaintiff, you must file a written objection with the Court, and mail it to Plaintiff's Counsel and Defendant's Counsel, by U.S. certified mail, return receipt requested. The written objection must contain the following information:

    1. a heading referring to Chieftain Royalty Company v. XTO Energy Inc., Case No. CIV-11-29-KEW and to the United States District Court for the Eastern District of Oklahoma;
    2. a statement as to whether the objector intends to appear at the Final Fairness Hearing, either in person or through counsel, and, if through counsel, identifying counsel by name, address, email address, and telephone number;
    3. a detailed statement of the specific legal and factual basis for each and every objection;
    4. a list of any witnesses the objector wishes to call at the Final Fairness Hearing, together with a brief summary of each witness’s expected testimony (to the extent the objector desires to offer expert testimony and/or an expert report, any such evidence must fully comply with the Federal Rules of Civil Procedure, Federal Rules of Evidence, and the Local Rules of the Court);
    5. a list of and copies of any exhibits the objector may seek to use at the Final Fairness Hearing;
    6. a list of any legal authority the objector may present at the Final Fairness Hearing;
    7. the objector’s name, current address, current telephone number, and all royalty owner identification numbers with Defendant (or other operator);
    8. the objector’s signature executed before a Notary Public;
    9. identification of the objector’s interest in wells where Defendant, including its predecessors or affiliates, is or was the operator or, as a non-operator, Defendant separately marketed gas (by well name, payee well number, and county in which the well is located) during the Class Period; and
    10. if the objector is objecting to any portion of Plaintiff’s and Plaintiff’s Counsel’s requested attorneys’ fees, Litigation Expenses, or Case Contribution Award, the objector must specifically state the portion of attorneys’ fees, Litigation Expenses, and/or Case Contribution Award (whichever applies to the objection) that he/she believes is fair and reasonable and the portion that is not.


    Your objection must be filed, served, and received by the Court and Counsel no later than March 8, 2018 at 5:00 p.m. (Central Time). Mail objections to:

    Clerk of the Court
    United States District Court for the Eastern District of Oklahoma
    101 North 5th Street
    Muskogee, OK 74401

    Plaintiff's Counsel
    Bradley E. Beckworth
    Nix, Pattreson & Roach, LLP
    3600 N Captial of TX Hwy, Suite 250
    Austin, TX 78746

    Defendant's Counsel
    Jeffrey C. King
    Winstead, PC
    300 Throckmorton, Suite 1700
    Fort Worth, TX 76102

    If you fail to timely file and mail the written objection and provide the required information, you will be deemed to have waived any objection and shall be forever foreclosed from making any objection to the Settlement (or any part thereof), and will not be allowed to present any objections at the Final Fairness Hearing.

  • If you do nothing, you will remain in the Settlement Class, be bound by the terms of the Settlement, and you may be eligible to receive benefits under the Settlement.

  • The Final Fairness Hearing will be held on March 26, 2018 beginning at 9:00 a.m. (Central Time), before the Honorable Kimberly E. West, United States District Court Magistrate Judge assigned this case for the Eastern District of Oklahoma, in Muskogee, Oklahoma. At the Fairness Hearing, the Court will consider:

    1. whether the Settlement is fair, reasonable, and adequate;
    2. any timely and properly raised objections to the Settlement;
    3. the Allocation Methodology;
    4. the Initial Plan of Allocation; and
    5. the request for attorneys' fees and Litigation Expenses and request for Case Contribution Award for Plaintiff relating to its representation of the Class.


    After the hearing, the Court will make its decision. We do not know how long this will take.

  • If the Settlement receives final judicial approval, the Plaintiff, all Class Members, and members who timely requested exclusion from the Settlement Class, will release all claims that they have alleged or could have alleged in this lawsuit. This includes all claims (known or unknown) that arise in whole or in part out of the alleged underpayment of royalties on gas and its constituents (including helium, residue gas, natural gas liquids, nitrogen and condensate) produced from well(s) in Oklahoma that Defendant operated or, as a non-operator, Defendant separately marketed the gas and its constituents from May 1, 2002 through production month May 31, 2017.

  • No. You have do not have to come to the Fairness Hearing. Plaintiff’s Counsel will answer any questions the Court might have, but you are welcome to come at your own expense. If you file an objection to the proposed Settlement, you don’t have to appear in Court to talk about it. As long as you file your valid, written objection on time, the Court will consider it.

    You have the right to retain your own attorney to represent you at the Final Fairness Hearing. However, if you retain separate counsel you will be responsible for his or her fees and expenses out of your own pocket.

  • You can continue to visit this website for updates. The full Settlement Agreement and certain other pleadings filed in the case are available on the Important Documents page.

  • You can continue to visit this website for updates, submit a question on the Contact Us page, or write to:

    Chieftain-XTO Settlement
    c/o JND Legal Administration, Settlement Administrator
    P.O. Box 6878
    Broomfield, CO 80021


    NOTE: The pleadings and other papers filed in this Action are available in the Office of the Clerk of the Court for the United States District Court for the Eastern District of Oklahoma, 101 North 5th Street, Muskogee, OK 74401. The records are also available online for a fee through the PACER service at www.pacer.gov. Please do not contact the Judge or Court Clerk asking for information regarding this Notice.

For More Information

Visit this website often to get the most up-to-date information.

Mail

Chieftain-XTO Settlement
c/o JND Legal Administration
P.O. Box 6878
Broomfield, CO 80021