By OGJ editors
HOUSTON, June 15 -- ConocoPhillips and the US Minerals Management Service negotiated a $21.7 million settlement of a royalty dispute involving coalbed methane (CBM) produced from federal leases in New Mexico.
ConocoPhillips agreed to pay MMS for royalties from Jan. 1, 1989, through the end of this month. MMS will split the settlement equally with the state of New Mexico.
The issue was whether ConocoPhillips could deduct from royalty payments the cost of removing carbon dioxide from CBM. The settlement followed a June 10 decision in a separate case before the US District Court of Appeals for the District of Columbia upholding MMS's contention that the cost related to making production marketable and shouldn't be borne by the lessor.
