US natural gas royalty case results in $600K settlement

Jun 8, 2018

ALBUQUERQUE, N.M. (AP) — The U.S. government has reached a settlement with a Texas-based company over money owed on natural gas production on leased lands in New Mexico.Federal prosecutors say they recovered $600,000 to settle allegations that Great Western Drilling Corp. underreported and underpaid royalties due from July 2010 through June 2016.They say the company received a lower sales price from its third-party purchasers because those purchasers paid another company for the transportation, compression and processing of the gas.Officials say Great Western Drilling did not credit the federal government for the portion of the price reduction related to processing costs. Instead, it paid royalties only on the decreased purchase price.For the 2017 fiscal year, New Mexico received $455 million in energy production disbursements from revenues collected by the federal government.