Royalties

Natural gas showed unexpected strength and warded off the worst early effects of the blow that falling oil prices dealt to the government of Alberta — Canada’s chief producing jurisdiction.

Chesapeake Energy Corp. improperly deducted drilling expenses from Barnett Shale natural gas royalty payments and violated some terms of a lease agreement, a Texas appeals court has affirmed.

Chesapeake Energy Corp. is awaiting approval by the courts of a proposed $7.5 million settlement to resolve claims that a unit improperly charged Pennsylvania leaseholders post-production fees, a spokesman said Tuesday.

The New Mexico Supreme Court on Friday sided with a challenge from ConocoPhillips and Burlington Resources Oil and Gas Co. regarding royalties they allegedly owed from past oil and natural gas production on state lands.

Range Resources Corp. has drilled the first unconventional natural gas well in Crawford County, PA, and is reportedly planning to drill more of them targeting the Utica Shale in the near future.

Under a new policy by the Pennsylvania Department of Conservation and Natural Resources (DCNR), operators will be required to sign a lease and make royalty payments to the state for natural gas gathered from wells adjacent to navigable streams, lakes and waterways.

Hopeful that it is seeing the final months of a moratorium on high-volume hydraulic fracturing (HVHF) tick away in New York, Norse Energy Corp. ASA — a company that, like many others, has suffered through years of uncertainty at the hands of the delay — is positioning itself to hit the ground running in the Marcellus and Utica shales.

Total Fina SA and its affiliates have agreed to pay the federal government $14.6 million plus interest to resolve claims that the companies underpaid royalties owed on natural gas produced from federal and American Indian lands. The settlement between the United States and Total Fina, Total Oil and Chemical Co., Total Minatome Corp., Total Exploration Production U.S.A. Inc., Fina Oil & Chemical Co., Elf Exploration Inc. and Total E&P USA Inc. covers the period from August 1986 to the present. The agreement arises from a lawsuit filed by Harold E. Wright under the Federal False Claims Act. Under the qui tam, or whistleblower, provisions of the act, a private citizen may file actions on behalf of the U.S. government and share in the recovery of funds. Because Wright is deceased, his heirs will receive $23,000 as part of their share of the settlement. The Total settlement and numerous agreements with other energy companies in recent years have returned approximately $280 million to the federal government and Indian lessors, said Greg Gould, the Interior Department’s acting deputy assistant secretary for Natural Resources Revenue.

On the ground, the shale boom is a mixed bag as rural landowners weigh the alternatives of securing lucrative royalties at the cost of their land being part of an oil/gas industrial push that critics contend is threatening local environments and public water supplies. The Los Angeles Times last Sunday profiled the dilemma through a feature on two brothers with dairy farms in the rich Marcellus Shale in western New York.