Bill > HB1656

This bill amends Arkansas law regarding oil and gas production by establishing clear definitions and protections for mineral owners and working interest owners. Specifically, the bill defines "net proceeds" as the gross proceeds from gas sales minus applicable taxes, assessments, and specific third-party or lease-allowed costs. The legislation affirms that mineral ownership is a property right and establishes that mineral owners have the right to contract regarding their interests. The bill mandates a minimum royalty of one-eighth (1/8) of net proceeds for royalty owners, while allowing for higher royalties through contractual negotiations. It also places responsibility on working interest owners to ensure full royalty payments are made in compliance with lease terms, and requires reimbursement to royalty owners within 30 days if unauthorized deductions are taken. The bill does not apply to units producing only liquid hydrocarbons, and it aims to provide clearer guidelines for allocation of production and costs following integration orders in oil and gas operations. These provisions seek to provide more transparency and protection for mineral owners in their interactions with operators and working interest owners.

Agriculture and Natural Resources

https://arkleg.state.ar.us/Bills/Detail?id=hb1656&ddBienniumSession=2025%2F2025R