Royalty rate hike would net billions

The State Land Office says an internal analysis shows that House Bill 398, setting the royalty rate for high-producing oil and gas tracks at 25 percent, would generate an additional $1.2 to $2 billion over 30 years for the Land Grant Permanent Fund.

The Land Office analysis estimates that the proposed changes would increase contributions by $50 million to $84 million per year, according to a release from the office.

Under the legislation, when oil production reaches 20,000 barrels monthly, or 75,000 m.c.f. for gas, the royalty rate the Land Office receives would increase to 25 percent, which it says is in line with the rate set on Texas trust lands. The bill would also require that companies pay royalties on gas wasted through venting or flaring.