Oklahoma City’s Continental Resources Inc. revealed in a SEC filing this week it is paying tens of millions of dollars to settle a class-action that alleged underpayment of royalties in Blaine County, Oklahoma.
The suit was filed in 2010 by Billie J. Strack and Daniela A. Renner as trustees of named trusts. The suit alleged Continental Resources improperly deducted post-production costs form royalties paid to plaintiffs and other royalty interest owners from crude oil and natural gas wells in the state.
As Continental Resources stated in its filing with the Securities and Exchange Commission, it reached a settlement in February of 2018 and expected to make payments and incur costs of $59.6 million. In the third quarter of 2018, the company made payments totaling $45.8 million to satisfy the majority of its obligations under the settlements.
The company stated that its remaining loss accrual for the case totals $21.1 million as of March 31, 2019. It expects to finish payments in the third quarter of 2019.
Court records indicate that details of the settlement were made under seal as of April 8, 2019. As required by the judge in the case, Continental Resources, in a filing update made April 11, 2019 had distributed $23,137,094.99 to certain members of the class-action lawsuit. The filing showed the payments went to 16,653 members with an average claim of $1,389.36. The largest payment was $609,130.95 but the recipient was not revealed.
Other court documents indicated that 34,000 class members were involved.
In reaching the settlement in 2018, District Judge Dennis Hladik approved attorney fees of $23 million which represent 40 percent of the settlement.
But Continental Resources is challenging the attorney fees and in an April 12, 2019 filing with the Oklahoma Supreme Court argued the “$23,000,000 attorney fee to Class Counsel—violate Oklahoma controlling precedents and statutory law.” The company is asking the court to reverse the awards and enter judgment for a reasonable fee.