In April we learned that Range Resources set aside $35 million for the Oklahoma royalty lawsuit. That wasn’t quite enough. They will need another $52.5 million.
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. LINK
The proposed agreement would give landowners who leased property to Range Resources an immediate $1.75 million. The exact payout after that isn’t known because it depends on variables such as gas prices and other costs, but the settlement sets the amount at $28 million, with about $7 million of that going to attorneys’ fees.