The Litigation seeks damages for Defendant's alleged underpayment of royalties to the royalty owners in the Class described above on Oklahoma wells where Defendant (or a predecessor or affiliate of Defendant) is or was the operator or, as a non-operator, Defendant (or a predecessor or affiliate of Defendant) separately marketed gas.
Plaintiff John Cecil ("Plaintiff") alleges that BP America breached an implied covenant to market, breached the underlying leases, breached an alleged fiduciary duty, violated RICO, and committed fraud with respect to royalty payments for gas and its constituents (including helium, residue gas, natural gas liquids, nitrogen and condensate).
These claims are premised on a variety of allegations, including but not limited to the allegations that Defendant (or a predecessor or affiliate of Defendant): (1) made various deductions and reductions from royalty payments that should not have been made by deducting direct and indirect fees for marketing, gathering, compression, dehydration, processing, treatment, and other similar services before the gas and its constituents (including helium, residue gas, natural gas liquids, nitrogen, and drop condensate) was a "marketable product"; (2) did not pay royalty, or underpaid royalty, on drip condensate that dropped out of the gas stream; (4) failed to provide royalty payees all of the information required by statute; and, (5) made affiliate sales.
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. A more complete description of the Litigation, its status, and the rulings made in the Litigation are available in the pleadings and other papers maintained by the United States District Court for the Eastern District of Oklahoma, located at 101 North 5th Street, Muskogee, Oklahoma 74401, in the file for Case No. 16-CV-00410-KEW.
On September 5, 2018, the Court preliminarily approved a Settlement in the Litigation between Plaintiff, on behalf of himself and the Settlement Class, and Defendant. This approval and the Notice are not an expression of opinion by the Court as to the merits of any of the claims or defenses asserted by any of the parties to the Litigation, or of whether the Court will ultimately approve the Settlement Agreement.