PITTSBURGH — An $11 million resolution to a lawsuit filed by two Butler County landowners against XTO Energy is pending in federal court.

The resolution, which is subject to court approval, ends a class-action lawsuit against the oil company after a lawsuit was filed claiming insufficient natural gas royalty payments.

The lawsuit was filed in July 2015 by the Thiele family and Richard Marburger as a trustee of the Olive M. Marburger living trust. Both are Butler County landowners and are claiming that XTO Energy had committed a breach of contract by deducting operating expenses from royalty payments to landowners, leaving them with less than the one-eighth of the proceeds they were promised in the leases.

Attorney David Borkovic of the Pittsburgh-based law firm Jones, Gregg Creehan and Gerace, who represents the plaintiffs, said the class-action lawsuit, which has about 11,040 members, will be resolved by the payment of $11 million from XTO.

“We have essentially reached a settlement agreement,” Borkovic said.

Borkovic said this case has been in litigation for several years because of a 2010 Pennsylvania Supreme Court case — Kilmer v. Elexco Land Services — “where the court rejected a number of challenges to oil companies to taking deductions from gas royalties.”

In that case, each of those leases permitted the gas companies to take deductions, but in this case, the contracts were “silent on whether gas companies can take deductions,” he said.

XTO filed a motion to dismiss the suit Sept. 21, 2015, claiming their method of calculating royalties, called the “net-back method,” is allowed by precedent set in the Kilmer decision. A report filed Jan. 26, 2016, by U.S. Magistrate Judge Cynthia Reed Eddy denied that motion.

The definition of the term “royalty” in the Kilmer ruling was made in the context of state law and does not necessarily apply to these (current) leases, she wrote.

Eddy wrote the Kilmer ruling did not apply in this case because this case involves a breach of contract.

In February 2016, the court decided the lawsuit could proceed as a class-action, and has been in mediation since with retired federal judge Edward Cahn.

“We came up with a compromise,” Borkovic said. “Under the terms, XTO is going to pay essentially the amount of deductions it had taken in the past, but would be permitted to take deductions in the future.”

He said the clients should be getting “their share of $11 million” as a result.

“This provides substantial benefits to the class,” he said,

In the future, Borkovic said with the agreement XTO Energy will be permitted to deduct certain post-production expenses as would be permitted under Kilmer decision, which will “largely depend on the amount of production.”

The Marburgers own 97.7 acres in Forward Township and the Thieles own 148 acres in Jefferson Township. They leased their mineral rights to Phillips Production in 2007, though that company was acquired by Exxon Mobil in 2011 and local drilling operations were taken over by XTO, which is based in Delaware and Texas.

Attorneys for the corporation referred comment to corporation media relations, who did not return messages for comment.