Weld County landowners seek class-action status over disputed royalties from Chevron, Occidental subsidiaries

WELD COUNTY — A trio of Weld County landowners is suing the local affiliates of oil giants Chevron Corp. (NYSE: CVX) and Occidental Petroleum Inc. (NYSE: OXY), saying that they have underpaid on mineral royalties for more than seven years.

In a complaint filed Monday in the U.S. District Court of Colorado, Boulter LLC, Ralph Nix Produce Inc. and Barclay Farms LLC said they were filing the suit as a stop-gap while their dispute with the drillers makes its way through the Colorado Oil and Gas Conservation Commission.

Ralph Nix and Barclay Farms operate near Platteville and Gilcrest, respectively.

The suit names Kerr-McGee Oil & Gas Onshore LP and Noble Energy Inc. as defendants. Those companies are the local affiliates of Occidental Petroleum Inc. and Chevron Corp. after acquisitions in 2019 and 2020, respectively.

The three plaintiffs sued the drillers in April 2020, claiming that their mineral royalties had been diluted over the course of at least six years after Noble and Kerr-McGee allegedly deducted payments to cover the cost of moving oil from a remote well to refineries for processing.

That case was dismissed without prejudice by the court in February after a judge determined that the COGCC had to determine if there was a true contractual dispute between the royalty holders and the drillers.

The allegations in both lawsuits are substantially similar, but the plaintiffs initiated the latest lawsuit to ward off any chance of Noble and Kerr-McGee claiming the dispute had gone past the statute of limitations.

The complaint seeks to certify a class that would contain anyone who had been paid royalties to allow Noble and Kerr-McGee to drill on their land since April 2014. It asks the court to require the drillers to pay the alleged under-payments and other penalties as determined.

Chevron and Occidental did not respond to a request for comment Wednesday.

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