Serving The Bakken And Beyond

Hess Royalty Statements Under Fire By Legislator

A state legislator wants the ND Industrial Commission, which oversees the oil and gas industry in the state, to get tougher on royalty statements issued by Hess Corp. that don’t explain deductions.

“Royalty owners generally are not on an equal footing when dealing with large oil and gas companies, and the commission has a responsibility under law,” said Rep. Robert J. Skarphol, “to ensure the protection of royalty owners by approving forms that clearly identify and explain deductions and adjustments.”

He suggested the commission take enforcement action if oil companies continue to fail to provide information sought by royalty owners. The penalty is a Class B misdemeanor.

“The failure to explain the nature of these deductions is particularly concerning, given the amount of the deductions in relations to the gross value of production,” Skarphol said.

One statement from Hess Bakken Investments II LLC identified other deductions in Williams County at $2,515.15, but carried no explanation.

“These deductions generally are significantly higher that deductions denoted on statements from others companies operating in this area of the state,” he said.

State law provides that the amount of the deduction from the oil and gas sold must be identified.