Judge sides with company in royalties dispute with state
BISMARCK (AP) — A judge has sided with a Houston-based energy company in a dispute with North Dakota involving oil and natural gas royalties, a decision that could affect several other drillers that allegedly owe the state millions of dollars in payments, the biggest portion of which is meant to support public education.
Northwest District Court Judge Robin Schmidt’s ruling Wednesday stems from a lawsuit Newfield Exploration filed against the state after the Department of Trust Lands conducted an audit in 2016 that claimed the company was underpaying royalties to the agency that leases rights for grazing and oil, coal and gravel production from state lands. The agency manages several state trust funds including a fund that benefits public schools.
Schmidt’s ruling follows a trial last week in Watford City. She wrote that the state’s claim of a breach of contract with the company was in question because the state failed to provide “any contract or lease … that allows this court to meaningfully review the contract obligations and whether a breach has occurred.”
The state Supreme Court sided with the Board of University and School Lands, referred to as the Land Board, two years ago in the debate that started with the lawsuit filed by Newfield in 2018 after the state determined that companies were taking improper deductions.
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