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:
- the production marketed by XTO on behalf of itself and/or others;
- the amount and date of claimed royalty underpayment to Class Members;
- the time period when the claimed underpayment occurred;
- 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
- 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.