Saturday, March 11, 2006
N.M. Collects $11.6 Million, Royalties on Gas Were Underpaid
The Associated Press
SANTA FE The state Land Office and the attorney general on Friday announced an agreement with two oil companies to collect $11.6 million in underpaid royalties on carbon dioxide gas.
The agreement in principle with Oxy USA Inc. and Occidental Permian Ltd. covers production from the Bravo Dome carbon dioxide gas unit in northeastern New Mexico, Land Commissioner Patrick Lyons and Attorney General Patricia Madrid announced.
They said Oxy and Occidental were affiliated companies that shared an interest in the Bravo Dome, the largest known deposit of carbon dioxide in the United States. It covers 1 million acres in Harding, Quay and Union counties.
Royalties from energy development on state trust land go into the Land Grant Permanent Fund, which helps finance public education in New Mexico.
Madrid sued Oxy last April on behalf of the Land Office, which administers drilling on trust lands. The lawsuit alleged the firm underpaid royalties through improper means, including creating an artificially low value for carbon dioxide produced, deducting charges and fees and inflating the charges and fees.
The Land Office manages 9 million surface acres and 13 million acres of mineral rights on state trust lands. The office generates revenue from oil and gas production, mineral development, agricultural leasing and other commercial activity.
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