Alleged

The U.S. District Court for Montana, the Helena Division, has approved a $15 million class-action settlement of a lawsuit that alleged Devon Energy Corp. underpaid natural gas royalties to the owners of minerals rights in the state.

Litigation over alleged wilderness areas has become a major obstacle and impediment to oil and natural gas development on federal lands, with key decisions from the District Court of Utah and the Federal Court for the Northern District of California raising doubts about the ability of the energy industry to economically develop natural resources on federal lands, according to a report by the law firm Fulbright & Jaworski LLP.

Litigation over alleged wilderness areas has become a major obstacle and impediment to oil and natural gas development on federal lands, with key decisions from the District Court of Utah and the Federal Court for the Northern District of California raising doubts about the ability of the energy industry to economically develop natural resources on federal lands, according to the latest report on energy trends by the law firm Fulbright & Jaworski LLP.

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has cited a Fort Worth, TX drilling firm for six alleged willful, repeat and serious violations of safety standards following the May 12 collapse of a natural gas drilling rig in the Town of Dix in western New York that killed one worker and seriously injured three others. Union Drilling Inc. faces $138,500 in total fines.

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has cited a Fort Worth, TX drilling firm for six alleged willful, repeat and serious violations of safety standards following the May 12 collapse of a natural gas drilling rig in Dix, NY, that killed one worker and seriously injured three others. Union Drilling Inc. faces $138,500 in total fines.

The estate of Enron Corp. founder Kenneth Lay has agreed to a $12 million settlement with the U.S. Department of Labor over the alleged mismanagement of Enron’s pension plans. The final settlement may fall below the full amount and will depend upon the total amount of assets in the estate, government officials said. The Labor Department sued Enron and 21 former company officials, including Lay and former CEO Jeffrey Skilling, in June 2003, seeking to require the defendants to restore all of the losses with interest to two of Enron’s pension plans (see Daily GPI, June 27, 2003). The plans had been governed by the federal Employee Retirement Income Security Act (ERISA) More than 20,000 participants in Enron’s savings and employee stock ownership plans “experienced a substantial erosion of their retirement assets” when the company declared bankruptcy in December 2001, the Labor Department noted. With the agreement with Lay’s estate, Skilling is the only defendant who has not settled, the government said. Skilling is scheduled to be sentenced to federal prison in October following his criminal convictions related to his misdeeds at Enron.

In an offshoot of the court-approved class action litigation settlement over Sempra Energy’s utilities’ alleged driving up of wholesale natural gas prices in the midst of the 2000-2001 energy crisis, the utilities and neighboring Southern California Edison Co. have reached a settlement that calls for changes in the way the Sempra gas storage program is operated. The three utilities jointly filed a motion with the California Public Utilities Commission last Monday to stay a regulatory case examining storage operations.

The scheduled start for the jury trial for Sempra Energy’s multi-billion-dollar class action lawsuit in which it is alleged to have manipulated wholesale Arizona border natural gas prices was delayed Monday as hearings continued on 30 pre-trial motions in the case in a state Superior Court in San Diego County.

Reliant Energy has agreed to pay $68 million, and its accounting firm, Deloitte & Touche, agreed to pay $7 million to settle class action lawsuits by former Reliant shareholders who alleged that the companies failed to disclose in documents related to Reliant’s initial public offering (IPO) in April 2001 that it engaged in round-trip energy trading in an effort to exaggerate its revenues and trading volumes.