Driller to pay U.S. for trespass in state

A subsidiary of Southwestern Energy Co. has agreed to pay $950,000 to the United States in a settlement of a mineral trespass claim, the U.S. attorney's office for the Eastern District of Arkansas said.

SEECO Inc. agreed to pay the amount as a result of a civil settlement with the federal government and must pay within 45 days, according to a Tuesday news release.

The Bureau of Land Management's Southeastern States Field Office "developed information" in July 2009 that natural gas wells operated by SEECO were found to have been drilled into unleased federally owned minerals in Conway and Van Buren counties, according to the news release from the U.S. attorney's office.

An investigation by the agency and the U.S. Department of the Interior Office of the Inspector General found that from Jan. 4, 2008 to Dec. 3, 2009, SEECO trespassed into federal minerals to obtain them "for private gain" in Conway County, according to the news release. The investigation found the same results for a well in Van Buren County between Nov. 3, 2009 to April 21, 2010.

"This civil settlement should remind the oil and gas industry that the Department of the Interior is monitoring federally owned mineral interests, and that the Department of Justice will hold companies responsible if they trespass," Matthew Elliott, assistant inspector general for investigations for the Interior Department, said in a prepared statement.

In an email statement about the settlement, Houston-based Southwestern Energy, the lead operator in the Fayetteville Shale in north-central Arkansas said:

"Over the past decade SEECO has drilled more than 4,000 wells in the Fayetteville Shale. In two instances, one in 2009 and the other in 2010, SEECO discovered that it had inadvertently drilled wells that partly extended under federal lands without having previously obtained appropriate rights," the statement said.

"In each case SEECO immediately reported the mistake to the Bureau of Land Management. SEECO voluntarily paid over the royalties that were due, and the Bureau of Land Management granted SEECO rights retroactive to the dates the wells were first produced," the statement said.

Christina Fowler, a spokesman for Southwestern Energy, said that as of January 2014, SEECO has paid $362,620 in royalties for the Conway well and $7,995 for the Van Buren well.

Fowler did not know how much the company has paid between January 2014 and September 2015, but said that it has paid monthly royalties to the U.S. Treasury during the period.

The news release from the U.S. attorney's office said the amount of the settlement with SEECO -- $950,000 -- is the value of the federally owned natural gas produced and sold by SEECO.

"SEECO decided to pay an additional settlement amount to avoid litigation costs over whether its actions were willful, intentional or in bad faith, which SEECO continues to deny," the statement from Southwestern Energy said. "These are the only two wells on which mistakes like this have occurred. SEECO and all [Southwestern Energy] companies are dedicated to acting lawfully and within our rights, and to promptly rectifying unintentional mistakes such as these."

Business on 09/03/2015

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