HB1656

House Bill 1656 amends Arkansas law regarding oil and gas production, specifically focusing on the allocation of production costs and proceeds following an integration order. The bill introduces a formal definition of "net proceeds" to standardize how deductions are calculated for both unleased integrated mineral interests and leased interests. It establishes that mineral ownership, including royalty proceeds, is a protected property right. The bill sets a minimum royalty rate of one-eighth (1/8) of net proceeds for gas production while allowing mineral owners to negotiate higher rates. Furthermore, it mandates that working interest owners are responsible for ensuring royalty payments comply with lease terms and requires the reimbursement of unauthorized deductions within thirty days. Finally, the bill specifies that these provisions do not apply to liquid hydrocarbon production or gas production associated with liquid hydrocarbons.