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Utah seeks missing royalty payments from oil, gas companies

April 1, 2018

SALT LAKE CITY (AP) — Utah officials are going after a pair of oil and gas companies after regulators said they failed to report their production figures for more than a year, depriving a state fund of money used to support public schools.

The Utah School and Institutional Trust Lands Administration has requested that state regulators temporarily close down 52 wells operated on state lands leased by Denver-based Enduring Resources, The Salt Lake Tribune reported last week.

State officials are seeking for the company or its successor to file production reports and pay delinquent royalties of about $330,000.

The company had assigned its interests in the Natural Buttes gas field to Houston-based WestStar Exploration Co. in October 2016.

The monthly productions reports then stopped, leaving the administration unable to calculate the royalty payments owed, according to the state Division of Oil, Gas and Mining. The administration owns the mineral resources for that land.

WestStar sent state officials a check for $10,346 and an October 2016 report after the administration noticed last fall that the payments were missing.

“The royalty payment was substantially less than the amount SITLA (Utah School and Institutional Trust Lands Administration) would have expected, which suggested that WestStar had taken a number of improper deductions,” the administration’s attorney, Stephanie Barber-Renteria, wrote in filings.

The monthly payment should be about $22,000 a month, resulting in about $330,000 WestStar owes as of the end of last year, administration officials said.

The state Division of Oil, Gas and Mining has repeatedly ordered the company to report its production and pay what it owes, according to documents.

The administration is seeking a settlement after WestStar has pledged to file outstanding reports and pay owed royalties by April 10.

WestStar President William Gilmore did not return a phone message seeking comment left by the newspaper.


Information from: The Salt Lake Tribune, http://www.sltrib.com

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