Facing tough criticism along with the economic downturn, the ND Board of University and School Lands backed from demanding past gas royalty payments from wells on state lands.
The board agreed to delay action until Sept. 30 and may consider further extensions if necessary.
Earlier action by the board, giving producers only 90 days to assess possible royalties—in some cases 40 years of records—due the state, drew sharp reaction from the oil and gas industry.
“This is not the way we conduct business in North Dakota,” said Ron Ness, president of the ND Petroleum Council. “The outrage and frustration I am seeing from the oil and gas industry comes at a time when we are trying to keep economics affordable.” He described the letter from Land Commissioner Jodi Smith as “extremely punitive and harmful”.
The board made the decision April 8 in a closed meeting as it discussed what action to take on the Newfield Exploration case, which is headed for a new trial in McKenzie County before Dist. Judge Robin Schmidt.
This case sparked the Dept. of Trust Lands to seek unpaid royalties as a result of ongoing audits.
In the meantime, the ND Petroleum Council is encouraging its members to maintain dialogue with the ND Dept. of Trust Lands, which oversees state royalty payments. The Dept. of Trust Lands Revenue Compliance Director, Adam Otteson, can be reached at dtlRoyaltyInfo@nd.gov or by telephone at (701) 328-1946.