Settlement Class Counsel has requested that the Court (i) award Settlement Class Counsel an attorney’s fee in an amount to be determined by the Court but not to exceed forty percent (40%) of the Settlement Proceeds as is customary in Oklahoma royalty underpayment class actions; (ii) award the Class Representatives a fee in an amount to be determined by the Court but not to exceed two percent (2%) of the Settlement Proceeds; (iii) reimburse Class Counsel from the Settlement Proceeds for all litigation expenses paid by Settlement Class Counsel, including expert and consulting fees and other litigation expenses in amounts to be determined by the Court; and (iv) authorize payment of Administration Expenses. If the Court approves this request, such amounts will be deducted from the Settlement Proceeds before the Net Settlement Amount is calculated and Distribution Checks are mailed to the Settlement Class Members.
Defendants have provided or will be providing data on the volume of gas produced by each Class Well on an Mcf basis for the Released Period and the last available revenue transaction report for each Class Well in their possession as of the Petition Date. From this data, the Class’s expert and Settlement Class Counsel will aggregate the production of gas on an Mcf basis from each Class Well for the entire Released Period and compare that volume to the total volume of gas produced on an Mcf basis from all Class Wells for the entire Released Period to arrive at a percentage of volume produced by each Class Well during the Released Period. The Class’s expert will then apply this percentage to 56% of the Settlement Proceeds to arrive at a preliminary estimate of the Net Settlement Amount to be distributed to each Class Well. Using 56% of the Settlement Proceeds for the preliminary allocation assumes 44% of the Settlement Proceeds will be used to pay court-approved Class Fees and Expenses and Administration Expenses.
Utilizing this methodology, a proportionate share of the estimated Net Settlement Amount will be preliminarily allocated to each Class Well. Utilizing the last available revenue transaction report for each Class Well obtained from Defendants or, if necessary, relevant royalty owner information from successor third-party operators, the preliminarily allocated amount will be further allocated from the Class-Well-level to each royalty owner in each Class Well. A preliminary Summary Final Distribution Report will be posted on the website when it is available to show you your allocated portion of the Net Settlement Amount. If a Settlement Class Member’s distribution amount is less than $5.00, the Settlement Administrator will not issue or mail a Distribution Check to such Settlement Class Member. Instead the amount will be held as Undistributed Proceeds and distributed as part of the Final Undistributed Fund. Please check the website periodically for updated information.
If a Class Well was plugged or shut-in during the Released Period, then the amount allocated to that Class Well shall be paid to the last known royalty owners paid by Defendants in those wells. If a Class Well was sold during the Class Period, then the amount allocated to the Class Well shall be paid to the last known royalty owners as may be ascertained from relevant royalty owner information provided by successor third-party operators to Settlement Class Counsel, publicly available data, or otherwise upon fair inquiry.
The distribution described above is based upon the following assumptions: (a) that very few sales of royalty interests in Class Wells have occurred during the Released Period; (b) if sales did occur during the Released Period, the buyer was entitled to receive payment for all past claims covered by the Settlement; and (c) if royalty interests passed through inheritance, devise, intra-family or interfamily transfers, that it was the intent that the heir, devisee or transferee also receive payment for all past claims covered by the Settlement. To the extent these assumptions are incorrect or a payee is not the proper party to receive payment, such Settlement Class Member who receives payment shall in turn make the correct payment to the proper party or parties entitled thereto or return the funds to the Settlement Administrator.
A draft of the Plan of Allocation and Distribution, which details more fully the allocation process, is available from the Important Documents page and remains subject to Court approval.