The bill amends existing laws regarding oil and gas production and conservation in Arkansas, specifically focusing on the allocation of production and costs following an integration order. Key changes include the definition of royalty gas, which is now specified as one-eighth of all gas sold from a drilling unit, with the proceeds being distributed to royalty owners after deducting federal and state taxes and assessments. The bill also clarifies the responsibilities of working interest owners in providing necessary information to the operator for timely distribution of royalties and outlines the consequences for non-compliance, including potential sanctions from the commission.

Additionally, the bill modifies the language regarding the discharge of obligations related to royalty payments, replacing terms like "revenue" and "realized" with "proceeds" and "received," respectively. This change aims to streamline the process and ensure clarity in the financial transactions associated with gas sales. The bill emphasizes that operators are not liable for failures in distribution due to the non-compliance of working interest owners, thereby protecting operators from legal repercussions in such cases. Overall, the amendments seek to enhance the efficiency and accountability of royalty distribution in the oil and gas sector.

Statutes affected:
SB 521: 15-72-305(a)