Range Resources (RRC) Settles Gas Class Action; Sees $52.5M Q2 Charge

June 4, 2013 6:40 AM EDT
On May 31, 2013, Range Resources Corporation (NYSE: RRC) along with its subsidiaries Range Production Company and Range Resources – Midcontinent LLC and the Class Representatives of the statewide class action styled James A. Drummond and Chris Parrish v. Range Resources-Midcontinent LLC, et al, Case No. CJ-2010-510, in the District Court of Grady County of the State of Oklahoma, executed a memorandum of understanding setting forth a summary of final settlement terms to be effected in the form of a definitive settlement agreement. This class action was filed on behalf of royalty owners asserting various claims for damages related to alleged costs of making gas produced from wells owned or operated by Range Resources-Midcontinent LLC or from which we separately marketed its share of gas “marketable” along with recovery of interest on the disputed amounts at 12% compounded annually for the life of each well. The memorandum of understanding, which is expected to result in the execution of a definitive settlement agreement provides for a cash payment to the class in the amount of $87.5 million in exchange for full release of all claims regarding the calculation, reporting and payment of royalties from the sale of natural gas and its constituents for all periods prior to May 31, 2013. As previously disclosed in the Company 10-Q for the first quarter 2013, the Company accrued $35 million for this litigation in the first quarter of 2013, therefore the settlement will result in an incremental charge of $52.5 million in the second quarter of 2013. The Company previously announced an estimated gain on the sale of certain Delaware and Permian Basin producing properties in the amount of $87.0 million which will also be recorded in the second quarter 2013.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Corporate News, Guidance, Litigation