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Working Interest Owner Sued for Withholding Severance Taxes

In Hershey v. ExxonMobil Oil Corporation, Case No. 07-1300-JTM (2011), the Federal District Court in Kansas certified a class action lawsuit against Exxon. Exxon owns a working interest in more than 1700 Kansas oil and gas wells. The Plaintiff is a royalty owner for one of these leases. The Plaintiff claims that Exxon acted improperly in deducting various costs from royalty payments made to the royalty owners. The costs included, inter alia, the royalty owners’ portion of the total severance taxes reportedly paid on helium when no such tax was to be made for helium. The court-certified class includes: “All royalty owners of ExxonMobil Oil Corporation from Kansas wells that have produced gas and/or gas constituents (such as residue gas or methane, natural gas liquids, helium, nitrogen or condensate) from January 1, 1988 to the date of class certification.”


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