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. It introduces a definition for "net proceeds" in relation to mineral interests, clarifying how gross proceeds from the sale of gas are calculated based on whether the mineral interest is covered by an executed lease or not. The bill also establishes the minimum royalty payable to royalty owners, which is set at one-eighth (1/8) of the net proceeds from gas sales, while allowing mineral owners to negotiate higher royalties through contracts.

Additionally, the bill outlines the responsibilities of working interest owners in ensuring that royalties are paid to royalty owners in accordance with lease terms. It mandates that any deductions or expenses taken that are not in line with the lease terms must be reimbursed to the royalty owner within thirty days. The provisions of this bill do not apply to producing units or wells that only produce liquid hydrocarbons or gas associated with liquid hydrocarbons. Overall, the bill aims to enhance clarity and fairness in the financial dealings between operators, working interest owners, and mineral owners in the oil and gas sector.

Statutes affected:
Old version HB1656 Original - 3-4-2025 11:49 AM: 15-72-305
Old version HB1656 V2 - 3-19-2025 09:36 AM: 15-72-305
Old version HB1656 V3 - 4-1-2025 11:42 AM: 15-72-305
HB 1656: 15-72-305
Act 1024: 15-72-305