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    Shell Settles Suit

    Alabama to receive $27 million in compensatory damages.

    MONTGOMERY, Ala. -- Shell Oil has paid the state $27 million to settle accusations the company underpaid natural gas royalties for drilling in state waters.

    Alabama sued Shell in 1999, accusing it of underpaying royalties on lease contracts for natural gas drilled in Mobile Bay from 1991 to 2000. In addition to the $27 million in compensatory damages, the
    company paid $6.5 million for the state's attorneys' fees and court costs, the Associated Press reported.

    Shell is the third defendant in lawsuits brought by the state over natural gas drilling rights in state waters. In the first case, against Exxon Mobil, a jury awarded the state a record $3.4 billion in punitive damages on top of $87.7 million in disputed royalties and interest.

    Exxon has appealed the verdict to the Alabama Supreme Court.

    In December, a jury awarded the state more than $24 million in its dispute with Hunt Petroleum Corp.

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