Hilcorp San Juan L.P., an oil and gas company with offices in Aztec, New Mexico, and Houston, has agreed to resolve allegations that it knowingly underpaid royalties owed on oil and natural gas produced from federal lands. The company has agreed to pay $34.6 million to resolve its False Claims Act and other liability for the conduct.
“U.S. taxpayers deserve a fair share of the revenues received by companies that extract natural resources from public lands” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department remains committed to ensuring that energy companies accurately report and pay to the United States the amount of royalties that are owed for their use of these resources.”
“Oil and gas production is a centerpiece of Houston and Texas’s economies, and for businesses to thrive it’s important that oil and gas companies play by the rules. That’s why my office will vigorously pursue those who deprive the United States of revenue,” said U.S. Attorney for the Southern District of Texas. “Royalties from oil and gas production on federal lands help support various public programs, and this settlement demonstrates my steadfast commitment to hold accountable those who fail to pay royalties in full accordance with the law.”
“The obligation to properly pay mineral royalties to the American public and other mineral owners is essential to the responsible development of minerals from lands under Federal jurisdiction, and along with the Office of Natural Resources Revenue and the Office of the Solicitor, the Office of Inspector General is committed to working with the Justice Department to ensure that companies meet their legal responsibilities,” said Special Agent in Charge Ron Gonzales of the Department of the Interior Office of Inspector General’s (DOI-OIG) Energy Investigations Unit.
Congress allows federal lands to be leased for the production of oil and natural gas in exchange for the payment of royalties on the value of the oil and gas produced. Lessees are required to pay monthly royalties to the federal government for any oil and gas removed or sold from the lease. 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. Lessees are also expected to use a specific transaction code for estimated payments, so that the government can identify circumstances in which a company has temporarily submitted royalties based on estimates. The settlement resolves allegations that, when reporting and paying royalties from August 2017 through December 2018, Hilcorp San Juan 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, resulting in the underpayment of royalties to the United States.
Hilcorp San Juan cooperated with the United States’ investigation by assisting in the determination of losses and received credit under the department’s guidelines for taking disclosure, cooperation and remediation into account in False Claims Act cases.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section; U.S. Attorney’s Office for the Southern District of Texas; and DOI-OIG’s Energy Investigations Unit, Office of the Solicitor, and Office of Natural Resources Revenue.
Trial Attorney Jonathan Thrope of the Civil Division and Assistant U.S. Attorney Kenneth Shaitelman for the Southern District of Texas handled the case.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
No comments:
Post a Comment