Oil & Gas News

Ovintiv Must Pay $19.5M To Settle Okla. Gas Royalties Suit


By: John M. Nelson – Haute Lawyer – After two years of negotiations, Ovintiv Inc. has agreed to pay $19.5 million to a class of Oklahoma property owners who allege they were underpaid on royalties for natural gas extracted from their land.

Led by landowner Mary Lansden Swafford, the class moved for final approval of the settlement in Oklahoma federal court on Wednesday, highlighting that no objections have been filed against the settlement and a mere nine out of tens of thousands of class members had indicated their intention to opt-out of the deal.

According to the filing, seven of those nine opt-outs stem from a single company and its affiliated entities.

The class originally filed suit in a Colorado court in September 2019, voicing concern about the post-production deductions they claimed violated the terms of the agreed upon leases with the Denver-based, Ovintiv.

Following that complaint, the company and class engaged in what court documents describe as extensive discovery, most of which was agreed upon before formal discovery requests were needed. That discovery process produced more than 100,000 procured documents and 19 volumes of relevant Ovintiv discovery.

In January of 2021, the class filed for certification after plaintiffs’ counsel had completed due diligence on thousands of oil-and-gas leases by royalty clause. In July, both parties agreed to execute a settlement agreement, which not only included the $19.5 million but also a stipulation that the case be dismissed in Colorado and moved to The Sooner State, since that court is more accessible to class members.

The class stated that no major changes had been logged since the court preliminarily approved the deal in August, and said that the overwhelming support from landowners who claim that Ovintiv improperly deducted post-production costs from their natural gas royalties shows the deal is a solid one for both parties.

“The small number of opt-outs from and no objections to the settlement support the conclusion that the settlement and plan of allocation are fair, adequate, reasonable and in the best interests of the settlement class such that final approval should be granted,” the class motion said.

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