The case was initially brought by two private whistleblowers, who will share in the proceeds of the settlement.
More cases are pending.
Two private whistle-blowers, J. Benjamin Johnson Jr. and John Martinek, who filed the original complaint in U.S. District Court in Lufkin, Texas, will share a portion of the settlement. The whistle-blowers alleged that 17 companies underpaid royalties on oil taken from more than 27 million acres of leased federal and Indian land onshore and offshore in 21 states. In their 1996 lawsuit, the whistle-blowers accused the companies of paying royalties based on a posted wellhead price rather than the fair market value. The case is scheduled for trial in March 2001, but companies have been negotiating settlements. Private oil and gas companies obtain mineral leases from the Interior Department, giving them the right to extract oil and gas from federal and Indian land in return for paying royalties.