Signed by Governor Sarah Huckabee Sanders

Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill amends state law regarding oil and gas production and conservation in Arkansas.

Highlights:

• Amends state law regarding oil and gas production, net proceeds, and conservation in Arkansas (Sec. 1).

• Defines “net proceeds” in this bill to mean (Sec. 1):

• If a mineral interest within a drilling unit is an integrated interest not covered by an executed lease, the gross proceeds from the sale of gas, including royalty gas, minus applicable taxes, assessments, and true third-party costs or costs specifically allowed by the form lease  adopted by the Oil and Gas Commission; or

• If a mineral interest within a drilling unit is covered by an executed lease, the gross proceeds from the sale of gas, including royalty gas, minus applicable tax, assessments, and charges or deductions specifically allowed by the terms of the lease.

• Specifies if deductions or expenses are taken by the operator or the nonoperating working interest owner or owners that is or are a party to the lease that are not under the lease terms, including deductions and expenses on royalty gas, then the deductions or expenses not specifically allowed by the applicable lease shall be reimbursed to the royalty owner within 30 days of the deduction being taken from the royalty payment of the royalty owner (Sec. 1).

• Specifies that these provisions shall not apply to any producing unit or well that produces liquid hydrocarbons only, liquid hydrocarbons associated with the production of gas, or gas produced associated with the production of liquid hydrocarbons (Sec. 1).

• Specifies that the provisions of this bill shall take effect immediately upon passage and approval by the Governor (Sec. 1).

Full Bill Text

Vote Smart's Synopsis:

Vote to amend and pass a bill that amends state law regarding oil and gas production and conservation in Arkansas.

Highlights:

• Amends state law regarding oil and gas production, net proceeds, and conservation in Arkansas (Sec. 1).

• Defines “net proceeds” in this bill to mean (Sec. 1):

• If a mineral interest within a drilling unit is an integrated interest not covered by an executed lease, the gross proceeds from the sale of gas, including royalty gas, minus applicable taxes, assessments, and true third-party costs or costs specifically allowed by the form lease  adopted by the Oil and Gas Commission; or

• If a mineral interest within a drilling unit is covered by an executed lease, the gross proceeds from the sale of gas, including royalty gas, minus applicable tax, assessments, and charges or deductions specifically allowed by the terms of the lease.

• Specifies if deductions or expenses are taken by the operator or the nonoperating working interest owner or owners that is or are a party to the lease that are not under the lease terms, including deductions and expenses on royalty gas, then the deductions or expenses not specifically allowed by the applicable lease shall be reimbursed to the royalty owner within 30 days of the deduction being taken from the royalty payment of the royalty owner (Sec. 1).

• Specifies that these provisions shall not apply to any producing unit or well that produces liquid hydrocarbons only, liquid hydrocarbons associated with the production of gas, or gas produced associated with the production of liquid hydrocarbons (Sec. 1).

• Specifies that the provisions of this bill shall take effect immediately upon passage and approval by the Governor (Sec. 1).