$14M Settlement Reached in Marcellus Shale Rights Class Action

Pittsburgh, PA: An out of court settlement of $14 million has been signed off by a Westmoreland judge, ending a two year civil suit brought by 230 property owners against State College-based Rex Energy. The lawsuit involved Marcellus shale drilling rights.

In their lawsuit, filed in 2009, property owners in the rural areas of Cook, Derry, Fairfield, Ligonier, Mt. Pleasant and Unity townships alleged that the company reneged on 137 drilling contracts the owners claimed they had finalized in 2008. The lawsuit also claimed that Rex failed to honor promises of bonus and rental payments on the drilling leases. Rex argued that it chose not to finalize the contracts after landowners signed them and therefore did not owe any payments.

According to a report on Triblive.com, the disputes involve oil and gas drilling rights on about 7,200 acres, or almost 11 square miles. The settlement permits landowners who had not signed leases with other companies and still wished to sign with Rex to do so at $2,500 per acre. The new, five-year leases give landowners a 15 percent royalty on any gas produced.

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Published on Jul-20-11