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$37,
751,379 Million Royalty Settlement in After a two day mediation in May 2004 a conditional agreement was reached to settle the pending Brumley v. ConocoPhillips royalty owner class action litigation relating to former Phillips Petroleum wells in Texas and Beaver Counties. The settlement was for $37,751,379 cash plus future royalty price increases (with a present value of an additional $7,590,000 million) during a 10 year claims moratorium period. A Settlement Agreement was executed and was preliminarily approved by the Judge on July 19, 2004. The full hearing occurred on October 11, 2004. The Court entered an order approving the settlement shortly thereafter. Because of the objections of a small group of class member to the attorney fee request the Court took further time to consider that issue. On February 3, 2005 the Court entered its order approving the requested attorney fees and costs. Distribution checks to Class Members of the settlement proceeds were mailed on August 26, 2005. The distribution was at the expense of ConocoPhillips. The settlement cash began earning interest at the prime rate on July 1, 2004 until paid by ConocoPhillips (prime rate is currently about 6%). The Order in this case became final in November
2004 as to marketing distribution issues. We had hoped that ConocoPhillips
would provide us with all of the distribution allocation numbers
in January 2005. Because
of the size of the job, ConocoPhillips was unable to complete and provide
the allocation numbers until April 8, 2005. Numerous errors were
found by Class counsel and Class experts. ConocoPhillips then
ran new numbers which were provided on May 12, 2005. Class Counsel
and its experts have spent many hours reviewing the numbers. Various
additional good faith errors were found in the "corrected" numbers
and reported to ConocoPhillips. ConocoPhillips has agreed that
some additional errors were made. We now anticipate that final distribution
will be August 26, 2005. We regret this delay, as does ConocoPhillips. Do
understand that the settlement proceeds continue to earn interest at
market rates (currently a little more than 6%) This class action settlement is
one of the largest of its kind in The Brumley case was originally
filed in 2001 in Considering the possible imposition
of a five year statute of limitations (which would have cut off damages
before 1996), the settlement in excess of $37,751,379 million is considered
by class counsel to be excellent based on the present status of the
case. Analysis of the settlement shows that class members will
receive sufficient money to pay them: (1) 100% reimbursement of actual
fees deducted from royalty since 1990 for compression, dehydration,
treating and gathering; (2) royalty on 100% of the value of helium
extracted and sold since the mid 1980s; and (3) royalty on 100% of
wellhead Btu heating value to the extent not previously paid since
the mid 1980s. The bulk of the claims began accruing in the 1990s. As
part of the deal Gas Royalty Agreements executed some 50 years ago,
but still in effect for some royalty owners, will be terminated for
those royalty owners who do not opt out of the settlement. A 10 year royalty claims moratorium
period ending July 31, 2014 was agreed to by the parties to avoid further
litigation. During this period ConocoPhillips has agreed to increase
the price it is currently paying substantially. Based on engineering
analysis this future pricing increase has about a $7,590,000 million
value. Please click the link below in
order to view the Brumley Class PDF files. If
you need the PDF plugin please follow the Adobe link below. Note: All
files are in PDF format. Order Approving Settlement Distribution to Class Findings of Fact and Conclusions of Law Newspaper
Article Regarding Settlement Joint
Motion for Settlement Fairness Hearing Order
Changing Date for Settlement Fairness Hearing Joint
Motion for Preliminary Approval of Settlement Agreement Order
Preliminarily Approving Settlement Order
on Joint Motion for Certification of Settlement Class Plan
of Allocation and Distribution Order Compromise
and Settlement Agreement Exhibit “A” to
Compromise and Settlement Agreement Exhibit “B” to
Compromise and Settlement Agreement Exhibit “C” to
Compromise and Settlement Agreement Exhibit “D” to
Compromise and Settlement Agreement Exhibit “E” to
Compromise and Settlement Agreement Exhibit “F” to
Compromise and Settlement Agreement Exhibit “G” to
Compromise and Settlement Agreement Exhibit “H” to
Compromise and Settlement Agreement Exhibit “I” to
Compromise and Settlement Agreement Exhibit “J” to
Compromise and Settlement Agreement Exhibit “K” to
Compromise and Settlement Agreement
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