PITTSBURGH, Pa. — EQT has reached a tentative settlement agreement with West Virginia landowners who are part of a statewide class action lawsuit originally filed in Doddridge County.
EQT made the announcement Wednesday, stating that in order to resolve the royalty claims for an eight-year period, the company has agreed to pay $53.5 million into a settlement fund that will be established to disburse payments to class participants. Each class member will have the opportunity to opt out of the settlement.
The lawsuit, which made its way up to U.S. District Court, centered around disputes over natural gas royalty payments between 2009 and 2017. The case has been pending since 2013.
“EQT is working diligently to resolve this matter with our leaseholders and earn their confidence, as well as that of other West Virginia residents and community leaders,” EQT CEO Robert McNally said in a media release on the company’s website. “This was an opportunity to turn over a new leaf in our relationship with our West Virginia leaseholders and this mutually beneficial agreement demonstrates our renewed commitment to the state of West Virginia.”
The release states that EQT believes the proposed settlement agreement demonstrates the company’s commitment to fostering good relationships with landowners.
“Under the settlement, EQT has agreed to stop taking future post production deductions on leases determined by the Court to not permit deductions. EQT and the class representatives also agreed that future royalty payments will be based on a clearly defined index pricing methodology,” the release said.
According to the release, certain class participants may also elect to adopt EQT’s standard lease pooling modification in return for a 2 percent — and up to a maximum of 18 percent — increase in their royalty. The settlement is subject to Court approval and achieving a threshold minimum percentage of participation by the class members. Following the closing of the settlement, the new deduction and pricing methodology is expected to prevent royalty claims related to the leases subject to the settlement.
Finalization of the settlement still needs approved by the U.S. District Court for the Northern District of West Virginia.