Hilcorp San Juan Agrees to Pay DOJ $34.6 Million to Resolve Underpaid Royalty Allegations -- Update
January 19 2024 - 4:56PM
Dow Jones News
By Denny Jacob
The Department of Justice said Hilcorp San Juan agreed to pay
$34.6 million to resolve allegations that it knowingly underpaid
royalties owed on oil and natural gas produced from federal
lands.
Hilcorp said it cooperated fully with the investigation and was
happy to have the matter resolved.
"There was no allegation of an intent to mislead or underpay
royalties," the company said in a statement. "The agreement ensures
that all mineral interest owner involved received the amounts due
to them, as is Hilcorp's objective."
The DOJ said the oil and gas company's agreement resolves
allegations that Hilcorp knowingly made payments to the federal
government based on estimated volumes and prices without indicating
that the payments were based on estimates and without subsequently
making payments in the following month based on actual volumes and
values from August 2017 through December 2018.
Congress allows federal lands to be leased for gas and oil
production in exchange for royalty payments on the value of the oil
and gas produced. Although lessees may make estimated royalty
payments the month following production, they are required to pay
actual royalties at the end of the month following the month in
which the estimated payment is made.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
January 19, 2024 17:41 ET (22:41 GMT)
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