Jay-Bee Production Company, an oil and gas drilling company with operations in West Virginia, announced a $42.6 million proposed settlement with royalty owners.
The settlement was the result of a class action lawsuit in U.S. District Court for the Northern District of West Virginia.
The proposed settlement covers claims for alleged improper royalty deductions from 2010 to 2023.
Jay-Bee denies the claims in the lawsuit but has agreed to the settlement to resolve the dispute and avoid additional litigation.
U.S. District Judge John Preston Bailey has granted preliminary approval of the settlement and scheduled a hearing for final approval on December 12, 2024.
Under the settlement, Jay-Bee has agreed to pay up to $42.6 million into a settlement fund established to disburse payments to participating class members.
The class includes people and entities, including their respective successors and assigns, who since May 21, 2010, through December 31, 2023, were paid or due royalties from Jay-Bee under certain West Virginia oil and gas leases.
Jay-Bee has agreed to stop charging post-production expenses under certain leases determined by the court to not allow post-production expenses to be charged to royalty owners.
On other leases, as determined by the court, Jay-Bee will be allowed to charge royalty owners specified post-production expenses consistent with the language of the lease. For any improper deductions charged in 2024, Jay-Bee will refund these deductions directly to royalty owners, with interest.
The settlement is subject to final court approval and achieving a threshold minimum percentage of participation by the class members. The publication notice accompanying this press release has further details regarding the settlement.
More details on the settlement and the methods for calculating royalties in the future are included in the settlement agreement and detailed notice, which are available at www.Jay-BeeClassAction.com,
After deducting court-approved attorneys’ fees and expenses, settlement payments will be distributed to eligible class members. Eligible class members will receive a minimum payment of $200.
People who do not want to be legally bound to the settlement — and, therefore, would release any claims against Jay-Bee, may exclude themselves through written notification to the settlement administrator. People or entities who do nothing will remain in the class and be bound by the settlement.
The lawsuit, Brenda Lee Hopper and Judith Ash-Young, et al. v. Jay-Bee Oil & Gas, Inc. et al., was filed originally in Tyler County in January, 2020, before being transferred to federal court that May.
The defendants include Jay-Bee Production Company; JB Exploration I, LLC; BB Land, LLC, and other entities and individuals.
The plaintiffs alleged that Jay-Bee unlawfully deducted post-production expenses from royalty payments in violation of the terms and conditions of their respective oil and gas leases.
The plaintiffs made claims for breach of contract, breach of fiduciary duty, breach of implied covenant of good faith and fair dealing, conversion, misrepresentation, fraud and concealment, civil conspiracy and negligence.
The original lawsuit estimated that there are more than 100 members of the class.