Williams, royalty owners settle some issues

GLENWOOD SPRINGS — Williams Production RMT will pay about $4.7 million under a partial settlement a judge approved Friday in a class-action lawsuit involving some 1,200 oil and gas royalty owners in Garfield County.

Williams agreed to the settlement to help resolve litigation over how it calculates payments to owners of mineral interests in the county, where it is the leading producer of natural gas.

District Court Judge Denise Lynch credited attorneys on both sides for coming up with what she called a “very, very fair settlement” of some of the issues raised in the case.

Ivo, Sidney and Ruth Lindauer, all of Parachute, and Diamond Minerals LLC filed the suit in 2006. Lynch on Friday certified the class-action status of the case.

The settlement rectifies issues including accounting errors, amounts deducted by Williams pertaining to the cost of transporting gas, and failures to pay reimbursement for the value of natural gas liquids and for excess amounts withheld for property taxes.

Williams and the plaintiffs continue to disagree on certain matters pertaining to gas transportation expenses, and a trial is expected to occur in the case later, possibly in 2010.

Williams previously had agreed to a $5.2 million partial settlement. The lower amount approved Friday reflects the fact that 22 eligible class-action plaintiffs opted out of the settlement agreement, with about half of those parties being other oil and gas operators.

Grand Junction attorney Nathan Keever, who represents the plaintiffs, said some of those operators may have conducted some of the same royalty-related practices as Williams, and that participating in the settlement might have compromised their own legal position. Keever already has successfully challenged Williams in two other Garfield County cases involving royalty calculations.

The $5.2 million settlement would have included payments ranging from pennies to $400,000, before expenses and attorney fees. But Keever said the party that would have received the highest amount opted out of the settlement. That party is an entity rather than an individual, Keever said.

The award amount is subject to nearly $96,670 in deductions for plaintiff attorneys’ expenses, and the remaining amount is subject to a 25 percent fee for those attorneys. Attorneys from Durango and Kansas assisted in the case.

The Lindauers were not in court Friday, but a handful of royalty owners were. One of them,
Cristy Koeneke, who also is a board member of the Rockies chapter of the National Association of Royalty Owners, said after the hearing that she appreciated Keever’s efforts.

“We’re glad he’s in our corner,” she said.


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