The legislative impetus to approve the bill may be connected to recent royalty complaints. In particular, one operator has come under increased scrutiny from the Governor, who recently called on the state’s attorney general to investigate allegations of royalty underpayment. Complainants have also filed suit against the operator regarding those allegations.
However, the monthly-reporting bill has another logical basis: landowners are paid royalties on a monthly basis, so monthly production reports could help serve as a way for those landowners to verify that their royalty payments match the actual production of natural gas. Thus, even for operators, the bill may have some benefits if it increases landowner confidence that the operators are properly compensating them for the use of their land and mineral resources.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Jim Hartle (jim.hartle@nortonrosefulbright.com or 713 651 5695) from Norton Rose Fulbright's Energy Practice Group.
