Some 1 million gallons of crude oil spilled out of the company's Meraux, La., refinery storage tank, damaging some 10,000 homes and businesses over 6 square miles.
A federal judge will have to approve the settlement, which has been scheduled to go to trial next week. A hearing is scheduled for Oct. 10.
Under the terms of the proposed settlement, "all residential and commercial properties in the class area will receive a cash payment pursuant to a fair and equitable allocation," the release said. That includes compensation for property damage, the diminished value of properties damaged by the spill, and "mental anguish and inconvenience."
In addition, Murphy said it will offer to purchase "at fair market value" as many as 600 homes and businesses in an area next to the refinery that was heavily affected by the spill. The company said the payments would be covered by insurance.
The company's cleanup of the area, which could cost an estimated $90 million, will continue.
The class consists of about 6,200 claims. Murphy still faces a number of individual suits related to the spill.
Shares of Murphy Oil (NYSE: MUR) were trading at $47.34 on Tuesday after closing at $45.90 on Monday.