UNITED STATES
DISTRICT COURT
FOR THE NORTHERN DISTRICT OF
WEST VIRGINIA
IMPORTANT LEGAL
NOTICE
If You Are a Royalty Owner and Received or are Receiving Payments from Gastar, Tug Hill or Atinum for an oil and gas mineral lease covering property located in West Virginia, YOU COULD BE INCLUDED IN A CLASS ACTION LAWSUIT
A Federal Court authorized this notice. This is not a solicitation from a lawyer.
¯PLEASE READ THIS NOTICE CAREFULLY. It impacts your rights and provides you with information regarding a class action lawsuit over royalty payments on oil and gas mineral leases in West Virginia against THQ Appalachia I, LLC, THQ Appalachia I Midco, LLC, THQ Marketing, LLC, TH Exploration, LLC, TH Exploration II, LLC, TH Operating, LLC (the “Tug Hill Defendants”) and Atinum Marcellus I, LLC (“Atinum”)(the Tug Hill Defendants and Atinum are jointly referred to in this Notice as “Defendants”). Your legal rights are affected whether or not you take action.
¯A Court has certified the lawsuit as a class action that includes oil and gas mineral leases covering property located in West Virginia that have been acquired by the Defendants.
¯The lawsuit claims that the Defendants failed to make proper royalty payments under the oil and gas mineral leases by underpaying the amount of royalty due.
¯The Court has not decided that the Defendants did anything wrong; rather, the case is currently scheduled to go to trial. There is no money available now, and whether any becomes available to anyone will depend on the outcome of this lawsuit. If the Class is successful at trial, you may need to present evidence you are a member of the Class.
¯The Plaintiff still must prove its claims against the Defendants at a trial. The Defendants dispute Plaintiff’s claims and assert the oil, gas and other mineral products were sold for a fair price and deducting certain post-production expenses before calculating royalties was and is proper. If the Plaintiff is successful, you will be notified about how to make a claim for money or benefits.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS LAWSUIT
DO NOTHING Stay in this lawsuit. Await the outcome. Possibly share in the benefits, if any become available. Give up certain rights.
By doing nothing, you keep the possibility of recovering money or other benefits that may result from a trial or settlement. But you give up any rights to sue the Defendants on your own about the same legal claims in this lawsuit.
EXCLUDE YOURSELF Get out of this lawsuit. Get no benefits from it. Keep your rights.
If you ask to be excluded from the lawsuit, and if any money or benefits later become available, you won’t be eligible to share in those. But you keep any rights to sue the Defendants on your own about the same legal claims in this lawsuit.
¯Please note that neither the lawsuit nor your decision to remain in the class or exclude yourself from the class will affect the royalties, if any, you are currently receiving. You will continue receiving those royalties.
¯Your rights and options – and the deadlines to exercise them – are explained in more detail in this Notice.
WHAT THIS NOTICE CONTAINS
BASIC INFORMATION PAGE 3
1. Why was this Notice issued?
2. What is the lawsuit about?
3. Why is this a class action?
4. What is Plaintiff asking for?
5. Is there a related lawsuit?
WHO’S INCLUDED IN THE LAWSUIT? PAGE 4
6. Who is part of the Class?
7. Will I stop receiving any royalties I am currently receiving if I join or don’t join the class?
8. How does Gastar fit in?
9. Am I a member of the Class if my royalty percentage is something other than 1/8?
10. What does “providing in substance” mean?
11. Does my lease have to have both an oil and a gas royalty clause providing in substance the royalties as defined in the Class definition to be a member of the Class?
12. Are there exceptions to being included?
13. I’m still not sure if I’m included in the lawsuit.
14. Is there any money available now?
YOUR RIGHTS AND OPTIONS. PAGE 6
15. What happens if I do nothing?
16. What if I don’t want to be part of the Class?
17. If I don’t exclude myself, can I sue later?
THE LAWYERS REPRESENTING You PAGE 7
18. Do I have a lawyer in this lawsuit?
19. How will the lawyers be paid?
THE TRIAL PAGE 7
20. When and where will the trial take place?
21. Will I get money after the trial?
GETTING MORE INFORMATION. PAGE 8
22. How do I get more information about the lawsuit?
BASIC INFORMATION
1. Why was this Notice issued?
This Notice is to inform you this lawsuit has been “certified” as a Class Action. This means that the lawsuit meets the requirements for class actions under federal rules and may proceed to trial as a class action. If you are included as a member of the Class, you may have legal rights and options before the Court decides whether the claims being made against the Defendants are correct. This Notice explains all of these things.
The Honorable John Preston Bailey of the United States District Court for the Northern District of West Virginia, at Wheeling is overseeing this case. The case is known as Southern Country Farms, Inc. v. THQ Appalachia I, LLC, et al., 5::21-CV-84. The company who sued is called the Plaintiff, and the companies being sued are called Defendants. The Plaintiff in this case is Southern Country Farms, Inc. The Defendants are THQ Appalachia I, LLC, THQ Appalachia I Midco, LLC, THQ Marketing, LLC, TH Exploration, LLC, TH Exploration II, LLC, TH Operating, LLC and Atinum Marcellus I, LLC (together called the “Defendants”).
2. What is the lawsuit about?
The lawsuit claims that the Defendants have in the past and continue to improperly deduct post- production expenses before calculating royalty payments under their oil and gas leases, improperly reduce the volume of certain natural gas liquids (NGLs) upon which royalties were paid and do not calculate royalties based on the fair value of the oil, gas and other mineral products produced from the leases. Post-production expenses may include but are not limited to one or more of the following expenses: gathering, compression, capacity and transportation charges, fractionation and loading, de-ethanization, residue gas boosting, fuel usage general and administrative costs, and other related expenses. The Defendants argue they have complied with the terms of the leases in calculating royalty payments and that all royalties have been properly paid.
The Court has not determined who is right or whether either side “won.” The lawyers for the Plaintiff will have to prove their claims in Court.
3. Why is this a class action?
In a class action, one or more individuals called “Class Representatives” (in this case, Southern Country Farms, Inc.) sue on behalf of those who have similar claims. All of these individuals and companies are a “Class” or “Class Members.” One court resolves the issues for all class members, except for those who properly exclude themselves from the Class (see Question 15).
4. What is the Plaintiff asking for?
Plaintiff is asking for money and other benefits from the Defendants for the Class. Plaintiff wants to obtain payment of all past and future royalties owed to Class Members for oil, gas and other mineral products extracted and produced from their property or leasehold.
5. Is there a related lawsuit?
There is no related class action. There is another case pending in West Virginia state court asserting the similar claims. That case is styled Venable Royalty, LTD., et al. v. Gastar Exploration USA, Inc., et al., consolidated case nos. 18-C-220 and 18-C-227, in the Circuit Court of Marshall County, West Virginia.
WHO IS INCLUDED IN THE LAWSUIT?
6. Who is part of the Class?
You are part of the class if you have a mineral lease in which:
¯Your lease covers land located in West Virginia;
¯Your lease contains a royalty clause on oil, gas or both, providing in substance the following royalties:
¯on oil (including but not limited to distillate and condensate) One eight (1/8) of that produced and saved from the lease premises, the same to be delivered at the wells or to the credit of Lessor in the pipeline to which the wells may be connected, provided; however, Lessee, at its option, may from time to time purchase the royalty oil, paying not less than the price prevailing in the pricing area for oil of like grade and gravity at the time of delivery.
¯on gas, including casinghead gas and all other gaseous or vaporous substances, produced from the Land and sold or used off the lease premises or in the manufacture of gasoline or in the extractions of sulphur or any other product, the market value at the wells of One-eight (1/8) of the gas sold or used, with the market value at the wells in no event to exceed the net proceeds received by Lessee calculated or allocated back to the wells from which produced, making allowance and deduction for a fair and reasonable charge for gathering, compressing, and making the gas merchantable.
¯You received or are due royalty payments from any of the Defendants or from Gastar Exploration, the party from whom the Defendants acquired their interests in the leases.
You do not need to be a corporation, partnership, or a particular organized legal entity to recover in this lawsuit. Southern Country Farms, Inc. is a corporation. This fact has no bearing on your membership in the class. Individuals, joint owners, corporations, partnerships, estates, trusts, limited liability companies, receivers, administrators, executors, and any other recognized legal organization that owns property subject to an included lease is a part of the Class unless you opt out or are otherwise not qualified. See questions 12 and 16 below.
The full class definition is included in the Certification Order available at
www.TugHillRoyalty
WVClass.com
and/or
www.AtinumRoyalty
WVClass.com.
7. Will I stop receiving any royalties I am currently receiving if I join or don’t join the class?
No. The pendency of the lawsuit and your decision to join or not join the class will not affect the royalties you are currently receiving, if any. Plaintiff claims those royalties were underpaid, so the royalty might increase if Plaintiff wins. The Court has not decided that the Defendants did anything wrong, and Plaintiff still must prove its claims against the Defendants at a trial.
8. How does Gastar fit in?
The Defendants acquired their interests in the leases from Gastar Exploration USA, Inc. and/or Gastar Exploration, Inc. Gastar subsequently filed for bankruptcy and is not a party to this lawsuit. Therefore, you may at one time have received payments from Gastar and may have subsequently received payments from Tug Hill or Atinum. Any claims you or the class members may have had against Gastar is not part of this lawsuit.
9. Am I a member of the Class if my royalty percentage is something other than 1/8 (or 12.5%)?
Yes, as long as the royalty provision is otherwise substantially similar to the royalty provisions stated above and the lease covers property located in West Virginia.
10. What does “providing in substance” mean?
The oil and/or gas royalty clause in your lease does not need to use the identical words and be the same word for word as that quoted in Question 6 above. However, it does have to be substantially similar in substance to those royalties clauses.
11. Does my lease have to have both an oil and a gas royalty clause providing in substance the royalties as defined in the Class definition to be a member of the Class?
No. Provided you meet the other requirements listed in Question 6, you may be a member of the Class if you have a royalty clause covering either oil or gas, or both, which provides in substance for oil and/or gas royalties as in the oil and gas royalty clauses quoted above. If your lease only has one such royalty clause, then you may be a member of the Class only with regard to that specific royalty clause.
12. Are there exceptions to being included?
The Class does not include:
¯Members, officers, directors, and/or legal representatives of any Defendant and their immediate family;
¯Any entity which is majority owned or otherwise controlled by a member, officer, director and/or legal representative of any Defendant and/or their immediate family; and
¯Any judge or judicial personnel assigned to this case and their immediate family.
13. I’m still not sure if I’m included in the lawsuit.
If you are not sure whether you are included in the lawsuit, you may visit
www.TugHillRoyalty
WVClass.com
or email questions to
info@TugHillRoyalty
WVClass.com
or
www.AtinumRoyaltyWV
Class.com
or info@AtinumRoyaltyWV
Class.com.
14. Is there any money available now?
No money or benefits are available now because the Court has not yet decided whether the Defendants did anything wrong, and the two sides have not settled the case. Plaintiff is asking for money or other benefits. There is no guarantee that money or benefits will ever be obtained.
YOUR RIGHTS AND
OPTIONS
If you are a member of the Class, you have a choice whether to remain a member of the Class and be represented by the Class Representatives and by Class Counsel, or to exclude yourself. Either choice will have its consequences, which you should understand before making your decision.
15. What happens if I do nothing at all?
If you do nothing, you will automatically remain in the Class. You will be legally bound by all Court orders (including any judgment entered for or against the Class or any future settlement), which means you won’t be able to sue, or continue to sue, the Defendants about the legal claims in this case.
In that event, you will be notified of any proposed settlement or the result of any trial or dismissal of any claims in the lawsuit.
16. What if I don’t want to be part of the Class?
If you decide not to participate in the lawsuit, you must exclude yourself from the Class. If you exclude yourself, you may choose to take no further action regarding your lease or you may file an individual claim against the Defendants in a separate proceeding, but you will not receive any benefits that may result from this lawsuit. You will not be bound by any Court orders, and you keep your right to sue the Defendants on your own regarding the issues in this case.
To exclude yourself from the Class, you must mail or otherwise deliver a letter stating that you want to be excluded from the Class. Your letter must also include:
¯Your full name, current address, property address (if different), telephone number, and your signature;
¯A description of your lease(s), including the date, the parties to the lease, the recordation number (generally listed as Book and Page numbers) and the county(ies) in which the leased property is located;
¯Your “Payee Number” (found on your Tug Hill royalty statements);
¯A statement substantially to the effect of: “I/We hereby request that I/we be excluded from the proposed class in Southern Country Farms, Inc. v. THQ Appalachia I, LLC, et al., 5::21-CV-84, and receive none of the benefits of the trial or court rulings.”
You must mail your letter postmarked by June 9, 2023 to:
Mark A. Kepple, Esq.,
Bailey & Wyant, PLLC,
1219 Chapline Street, Wheeling, West Virginia 26003.
17. If don’t exclude myself, can I sue later?
No. Unless you exclude yourself, you give up any right to sue the Defendants for the claims being resolved by this lawsuit.
THE LAWYERS REPRESENTING YOU
18. Do I have a lawyer in this lawsuit?
Yes. The Court appointed the following as co-“Class Counsel” to represent the interests of the Class: Robert L. Redfearn and Robert L. Redfearn, Jr. of Simon, Peragine, Smith & Redfearn; Mark A. Kepple of Bailey Wyant, P.L.L.C; Joseph Scipione of The Nittany Group; and Thomas E. White of the White Law Office. Their contact information is below:
Mark A. Kepple, Esq.
1219 Chapline Street
Wheeling, WV 26003 mkepple@baileywyant.
com
304-233-3100
Thomas E. White, Esq.
White & Clyburn
604 6th St,
Moundsville, WV 26041 [email protected]
Robert L. Redfearn, Esq.
Robert L. Redfearn, Jr. Esq.
Simon, Peragine, Smith & Redfearn
1100 Poydras St. #3000
New Orleans, LA 70163 [email protected] [email protected]
Joseph Scipione
The Nittany Group
169 Gerald St, Suite 110
State College, PA 16801 joe.scipione@
nittanygroup.com
If you want to be represented by another lawyer, you may hire one to appear in Court for you at your own expense.
19. How will the lawyers be paid?
You do not have to pay Class Counsel. Class Counsel will seek an award of fees and costs from the Court, to be paid separately by the Defendants or out of the recoveries made by Class Members, if any.
THE TRIAL
20. When and where will the trial take place?
If the case is not dismissed or settled, Plaintiff will have to prove its claims at a trial that will take place at the United States District Court for the Northern District of West Virginia, at Wheeling, West Virginia, 1125 Chapline Street, Wheeling, WV 26003, or at another United States District Court in the Northern District of West Virginia should the Court so decide. Presently, trial is scheduled to begin on August 15, 2023 at 9:00 a.m. During the trial, a jury will hear all of the evidence, so that a decision can be reached about whether the Plaintiff or the Defendants are right about the claims in the lawsuit. There is no guarantee that the Plaintiff will win at trial. Please check
www.TugHillRoyalty
WVClass.com
or
www.AtinumRoyalty
WVClass.com
to be kept up-to-date on the date, time, and location of the trial.
21. Will I get money after the trial?
There is no way to know at this time. If you do not exclude yourself from the Class, and if the Plaintiff wins at trial, you will need to prove that you are a member of the Class and may have to prove submit information and evidence to support a claim for damages as result of the Defendants’ actions to recover any money or other benefits from the Defendants. If the Plaintiff wins at trial, you will be notified about how and when to make your individual claim for money damages or other benefits and what your other options are at that time. If the Defendants win at trial, you will not be able to make an individual claim for money damages or other benefits.
Important information about the case will be posted as it becomes available on the website,
www.TugHillRoyalty
WVClass.com
and
www.AtinumRoyalty
WVClass.com.
GETTING MORE
INFORMATION
22. How do I get more information about the lawsuit?
This Notice summarizes the lawsuit. You can get a copy of the complaint and other important information about the lawsuit at
www.TugHillRoyalty
WVClass.com
and
www.AtinumRoyalty
WVClass.com.
Before doing so, however, please read this Notice carefully.
If you think you may be a member of the Class and did not receive this Notice by mail, please register at the website or contact Class Counsel to provide a current address.
Int May 29, June 5, 12 2023