Lawsuit: Lease Owners Aghast Over Unpaid Gas Royalties

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Anadarko Petroleum Corporation and affiliates, Mitsui E&P USA, LLC and Statoil USA Onshore Properties, Inc. are the defendants in a proposed class action lawsuit filed by a Pennsylvania man who claims they failed to fairly calculate royalty payments on natural gas produced from land leased to them by proposed class members and deliberately provided check stubs in varying formats to confuse and mislead lease owners.

The suit claims Anadarko unlawfully deducted from royalties paid to lease owners the cost of processing natural gas into “marketable form” (meaning it is ready for sale or use), including costs incurred for “gathering, dehydration, and compression” of the gas. According to the complaint, the lease terms prohibit Anadarko from including these deductions in its royalty payment calculations.

A separate subclass has been proposed for people who claim the defendants miscalculate and inaccurately report their royalty payments by using inconsistent check stub formats and “misleading” unit prices. The suit says the check stubs provided to lease owners were written in a different format by each defendant and did not include pricing information that allowed them to determine whether they were being paid according to industry standards.

“Such inconsistent royalty calculation and reporting practices create undue confusion for royalty owners and, more importantly, cause royalty payees such as Plaintiff and the Royalty Reporting Class Members to be paid incorrectly,” according to the complaint.