GREAT FALLS (AP)
A natural gas-production company has agreed to a $5 million settlement in a lawsuit filed by north-central Montana mineral rights owners who claimed the c ompany had unde rpai d royalties. Oklahoma-based Devon Energy Corp. agreed to the settlement with the Montana Land and Mineral Owners Association, which represented almost 1,900 owners of mineral rights in Blaine, Hill and Chouteau counties. The association and lead plaintiffs filed a lawsuit two years ago arguing that Devon Energy used several methods to underpay royalties on natural gas production. Companies pay a royalty to the owners of the mineral rights based on a percentage of the natural gas market price. Devon agreed to settle the case for $5 million, including $1.8 million in legal fees. The rest of the settlement, $3.2 million, will be distributed the owners of the mineral rights within 35 days unless a class member files a protest. “We believe that the majority of the money will go back into the communities in north-central Montana,” John Mudd, one of the attorneys representing the Montana Land and Mineral Owners Association, said Friday. The payments are based on the amount of gas produced on royalty owners’ land. “A significant number of owners will receive checks of more than $500, but the amounts vary,” Mudd said. In addition, Devon agreed to stop applying certain fees to royalty payments, which is expected to result in $10 million in additional revenue for mineral rights owners during the life of the natural gas fields. Devon Energy denied any wrongdoing and made no admission of liability in the settlement. “We are pleased to have reached an agreement that both sides can be satisfied with,” said Chip Minty, a Devon spokesman. “We view this as an amicable solution that is fair to both sides.”
