Kaiser-Francis Oil Co. gas royalties $10M class action settlement

Kaiser-Francis Oil Co. agreed to a $10 million settlement to resolve claims it failed to pay gas royalties from oil and gas wells in Oklahoma.

The settlement benefits royalty owners of oil and gas wells where Kaiser-Francis Oil Co. is or was the operator during the production months of August 2013 to December 2021 and where a lease agreement stated royalties would be paid on gas used off the lease premises. The settlement definition covers wells of gas and its constituents (residue gas, natural gas liquids, helium, nitrogen or condensate).

Kaiser-Francis is an Oklahoma-based oil and gas company. Owners of oil and gas wells may enter lease agreements with Kaiser-Francis Oil in which the company operates the wells and owners receive a royalty payment based on the profits from the well. 

According to a class action lawsuit, Kaiser-Francis underpaid well owners for royalties due to improper accounting methods. Instead of paying royalties based on the starting price for gas products, the oil company allegedly took “improper” deductions when paying royalties, resulting in underpayment, late payments or non-payment. 

To complicate matters, Kaiser-Francis allegedly hid the details of its production and accounting processes from royalty owners.

“Rather than adopting transparency in its royalty calculation formula, Kaiser-Francis, like most lessees, has guarded its production and accounting processes as confidential or proprietary, thereby, depriving the royalty owners of information necessary to understand how Kaiser-Francis calculates royalties,” the Kaiser-Francis class action lawsuit contends.

“Consequently, the royalty owner is unaware of the lessee’s actual practices, thereby enabling the lessee to breach the oil-and-gas lease without accountability.”

Kaiser-Francis hasn’t admitted any wrongdoing but agreed to a $10 million class action settlement to resolve these allegations.

Under the terms of the settlement, class members can receive a cash payment. 

Each class member can receive a share of the net settlement fund based on the amount they should have been compensated for gas royalties. Class members who would receive payments of less than $5 will not receive a payment as the costs of distribution outweigh the benefits of these smaller payments. A detailed allocation plan will be made available after the final approval order. 

The deadline for exclusion and objection is Jan. 9, 2023. 

The final approval hearing for the Kaiser-Francis Oil royalties settlement is scheduled for Jan. 23, 2023.

No claim form is required to benefit from the settlement. Class members who do not exclude themselves will automatically receive settlement benefits. 

Who’s Eligible

Royalty owners of oil and gas wells where Kaiser-Francis Oil Co. is or was the operator during the production months of August 2013 to December 2021 and where a lease agreement stated royalties would be paid on gas used off the lease premises

Potential Award

Varies

Proof of Purchase

No proof of purchase applicable

Exclusion Deadline

01/09/2023

Case Name

Final Hearing

01/23/2023

Settlement Website

Pauper-KFOC.com

Claims Administrator

Pauper v. Kaiser-Francis Settlement
c/o JND Legal Administration
PO Box 91244
Seattle, WA 98111
833-823-0041

Class Counsel

Defense Counsel