Companies drilling for natural gas in lightly-regulated Pennsylvania would cheat people. Or that courts would rule in favor of the politically-connected companies who so heavily supported our new Republican governor!
A federal judge in Erie has granted final approval of a class-action settlement estimated to be worth more than $22 million, in a suit brought by landowners above the Marcellus Shale who claimed that their natural gas leases with Range Resources imposed unfair royalty calculations.
The settlement is one of the largest in Pennsylvania in the last year.
The suit, Frederick v. Range Resources, was filed on behalf of more than 25,000 landowners and initially challenged the validity of the leases under the Pennsylvania Guaranteed Minimum Royalty Act.
But while the suit was pending, the Pennsylvania Supreme Court handed down its decision in Kilmer v. Elexco, which held that deducting post-production costs from the gross sale proceeds before calculating the royalty did not violate the act.
In the wake of Kilmer, the Frederick plaintiffs withdrew their challenge to the legality of the post-production cost deductions and filed an amended complaint challenging the propriety of the amounts deducted by Range Resources.
Specifically, the plaintiffs claimed that Range Resources had improperly reduced the amounts of their royalty payments by wrongly using the point-of-sale volume of gas, rather than the volume of gas collected at the wellhead, to calculate the gross royalty.