Royalties

The natural gas and oil industry in Texas paid more than $16 billion last year in combined state/local taxes and in royalties, the highest in history, according to the Texas Oil & Gas Association (TXOGA).

A Chesapeake Energy Corp. subsidiary has for now fended off a class action lawsuit brought by landowners in Ohio that alleged that the company underpaid royalties.

Natural gas royalties in Pennsylvania exceeded $1 billion in 2017, the latest period for which data is available, while payments made in 2018 are projected to be even higher, according to the state’s Independent Fiscal Office (IFO).

The North Dakota Supreme Court has sided with the state in a ruling against Newfield Exploration Co., now part of Encana Corp., which it said had underpaid oil and gas royalties.

A Pennsylvania appellate court handed the state attorney general’s (AG) office a victory last week, finding that it may move ahead with a wide-ranging lawsuit against Chesapeake Energy Corp. and Anadarko Petroleum Corp. for deceptive business practices.

The oil and natural gas industry paid Texas $2 billion in royalties in 2018, up 18% year/year, with most of the money directed to fund public schools and higher education.

EQT Corp. has filed a lawsuit in federal court arguing that West Virginia’s flat-rate lease statute is unconstitutional. Legislators last month passed a bill prohibiting post-production expenses from being deducted from flat-rate royalties.

A group of West Virginia landowners has appealed to the U.S. Supreme Court to review a May opinion by the state’s highest court that found natural gas producers can deduct post-production costs from royalty payments.

Roughly 150 protesters were at the Pennsylvania Capitol in Harrisburg on Tuesday for a rally urging lawmakers to pass legislation that would make it difficult for oil and gas companies to deduct post-production costs from royalty checks. Lawmakers have tried but failed for years to pass legislation to clarify the state’s Guaranteed Minimum Royalty Act of 1979, which sets forth the minimum payment to landowners but doesn’t address marketing costs and how they should be factored into royalties. Bradford County, PA, has launched a campaign to pressure lawmakers into passing state HB 1391, which may be considered in October (see Shale Daily,Sept. 9). The industry has fought against the legislation, claiming contractual disputes should be settled in court.