DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 590 Original 2023 Regular Session Bagley
Abstract: Specifies that where owners in a drilling unit choose not to participate in the costs of a
unit well, royalty payments must be paid directly from the drilling owner to the royalty
owner.
Present law provides that in a drilling unit, during the period of recoupment of costs and the risk
charge, the drilling owner shall pay to the nonparticipating owners for the benefit of their lessor
royalty and overriding royalty owners, the amount of royalties due under a lease or other agreement
between the nonparticipating owner and its lessor royalty and/or overriding royalty owners.
Specifies that the nonparticipating owner is supposed to then pay the royalties due in accordance
with the lease or other agreement creating the royalty interest.
Proposed law requires that, during the recoupment of costs and risk charge, the drilling owner must
make these royalty payments directly to the lessor royalty owner and overriding royalty owner
instead of through the nonparticipating owner.
Present law imposes a requirement that the nonparticipating owner provide certain information to
the drilling owner regarding royalties. Proposed law retains present law.
Present law provides that the nonparticipating owner is not relieved of any obligation to pay any
lessor royalty and overriding royalty during or after the recoupment of recoverable costs and the risk
charge. Proposed law retains present law.
(Amends R.S. 30:10(A)(2)(a)(ii) and (b)(i), (ii)(aa) through (cc) and (ee) through (jj), and (iii))