Sheridan Production Company Accused of Underpaying Gas Royalties

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Sheridan Production Company, LLC is facing a proposed class action that claims it improperly calculates royalties to be paid to owners of the wells from which it extracts oil and natural gas. According to the suit, the defendant leases the wells from landowners, collects raw materials, processes them into “marketable product,” sells them, and is responsible for paying royalties based on the selling price of the final products. The case argues that the defendant underpays proposed class members by neglecting to pay royalties on some products produced, making improper deductions related to processing expenses, and calculating royalties based on an estimation rather than “true market prices.”