Dallas-based Pioneer Natural Resources said Friday it will pay $32 million to settle claims made in a class action lawsuit filed by John Steven Alford and Robert Larrabee related to alleged improper deductions from royalties on Hugoton Basin oil and gas production. The lawsuit was filed in the 26th Judicial District Court in Stevens County, KS.
Under the terms of the settlement, Pioneer will make the payments in two cash installments. The royalties in question were from production before Dec. 31, 2005. Pioneer also agreed to adjust how royalty payments to the class members will be calculated for production occurring after Jan. 1, 2006.
Pioneer said it does not expect the settlement to impact net income for the third quarter because it previously accrued sufficient contingency reserves associated with this case. In addition, the change in the calculation of future royalty payments is not expected to have a material effect on Pioneer’s liquidity, financial condition or future results of operations.
The settlement agreement is subject to customary conditions, including preliminary and final court approval.
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