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Royalty Payments: Who’s Getting Rich?

by Elizabeth Alford on July 24, 2017

Lots of people are getting rich from oil and gas royalties and Washington is getting its share.

Related: North Dakota Fighting for Millions in Royalties

Receiving royalties from oil and gas activity can be lucrative. An estimated $22 billion was paid out in royalties to private mineral rights owners in 2013.

A new study by the Government Accountability Office reports that the federal government is also making a nice payback from oil and gas activity. In 2016, the government collected $2.5 billion in revenue from onshore oil, gas, and coal production on federal lands. The amount includes about $2 billion from royalty payments.

The study explored the impact of possibly raising federal royalty rates. Currently, the federal royalty rate is 12.5 percent but if increased, could raise revenue significantly.

One of the studies suggested that raising the royalty rate to 17 percent or 29 percent might increase federal revenue by up to $365 million per year after 2025. The other study suggested that increasing the effective rate could bring in an additional $141 million per year in royalty revenue. Stakeholders GAO interviewed cited other factors that could influence the extent to which raising federal royalty rates could increase revenues—in particular, how bonus bids, another revenue source, could be affected. Some of the stakeholders stated that companies would be more likely to offer lower bids to obtain a lease for the rights to extract resources if they had to pay higher royalties.

Just days before President Obama left office, he released new shale regulations establishing minimum royalty rates and giving the Secretary of the Interior discretion for increases. The ruling is designed to protect the environment and ensure that taxpayers are fairly compensated, should shale on federal lands ever be drilling commercially.

Read more at gao.gov.

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North Dakota Fighting for Millions in Royalties

by Elizabeth Alford on July 15, 2017

Oil and gas companies and industry leaders are in a dispute with North Dakota officials over improper deductions on royalties owed to the state.

Who Owns Mineral Rights Under North Dakota Lake?

The North Dakota Department of Trust Lands wants to collect millions of dollars in oil and gas royalties that it believes were improperly withheld by oil and gas companies that do business with the state.  The agency found the discrepancy during a recent audit of 19 companies from 2012 through 2014. 10 of those audited were found to have errors, according to Bismark Tribune.

“The bottom line is the companies would like to be able to take deductions because that helps them collect a smaller royalty. But my responsibility and the board’s is to ensure that the lease terms are followed and that we collect for the Common Schools Trust Fund and the other trust funds what they’re entitled.” - Land Commissioner Lance Gaebe

Getting to the bottom of the issue is being hindered because oil companies are hesitant to provide the necessary information. Industry leaders such as The North Dakota Petroleum Council are also pushing back through comments to the board and backing legislative action.

Read more at Bismark Tribune

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Oklahoma Law to Add Jobs & Generate Royalties

June 28, 2017

A new Oklahoma law means more money for royalty payments and greater protection for oil and gas producers in the state. Own mineral rights in Oklahoma? Join the discussion. Last month, Oklahoma Governor Mary Fallin signed Senate Bill 867 into law, which expands laws for horizontal drilling.  Also known as the Oklahoma Energy Jobs Act of […]

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Mineral Owners Win Against ConocoPhillips

June 21, 2017

Texas mineral owners win a huge judgment against ConocoPhillips for lost mineral royalties. Related: Mineral Rights Litigation Swells Across Country Leon and Minerva Ramirez have been fighting for their rightful share of the mineral royalties from their family land for over seven years. ConocoPhillips had been extracting oil and gas from the family’s land since 1995 […]

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Methane Rules Stand

June 16, 2017

In a surprise move, the United States Senate has voted to keep Obama’s methane ruling. Related: EPA: Tougher Methane Emissions Approved Last month, key Republicans joined Democrats to uphold the power granted to the Bureau of Land Management (BLM) during the Obama Administration to regulate some the oil and gas activity. The BLM had been granted the authority to […]

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Ohio Counties Benefit from Oil and Gas Lease Sales

May 21, 2017

Ohio counties are reaping the benefits from the controversial sale of oil and gas leasing rights. Related: Anti-fracking campaigns in Wayne National Forest At the end of 2016, the Federal Bureau of Land Management (BLM) auctioned off acreage in the Wayne National Forest for future gas exploration and production. The $1.7 million deal included more than […]

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Colorado Attempts to Limit Forced Pooling

April 19, 2017

Colorado lawmakers introduce a bill hoping to limit forced pooling of mineral rights in the state. Related: Colorado’s Setback Rule is a Game Changer Current law authorizes forced pooling in Colorado, and House HB17-1336 would bring additional restrictions on the practice. It will require that at least a majority of the royalty interest owners must join in […]

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Pennsylvania Considers Minimum Royalties

April 12, 2017

Pennsylvania lawmakers try for a third time to pass legislation that would provide minimum royalties for unconventional oil and gas well production. Own minerals in Pennsylvania? Join the discussion here. Representative Garth Everett [R] has re-introduced a bill that will amend the Oil and Gas Lease Act from 1979. This is the third time that the […]

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West Virginia Kills Pooling Bill

April 9, 2017

West Virginia lawmakers have killed a bill that would have forced pooling in the state. Related: West Virginia Oil and Gas Lease Basics Senate Bill 576, had been the top priority this session for the state’s natural gas industry. The bill would allow drilling over the objections of a co-owner of mineral rights. Through “co-tenancy”, companies […]

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Idaho: Landowner Bill of Rights Considered

March 9, 2017

Proposed legislation in Idaho would represent a total overhaul of the state’s oil and gas regulations. Own mineral rights in Idaho? Join the conversation here. Rep. Judy Boyle introduced HB 232 last week, a 45-page bill would require oil and gas producers to submit monthly reports for every operating well. This information would then be […]

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