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Royalty Owners Vow Action Against Intrastate Natural Gas Marketing Practices

Posted on: Monday, 18 September 2006, 21:00 CDT

OKLAHOMA CITY, Sept. 18 /PRNewswire/ -- The National Association of Royalty Owners (NARO) announced here, today, the launching of campaign against intrastate natural gas marketing practices that are harmful to the producer, royalty owner and consumer alike.

Meeting in Las Colinas, Texas, for their annual convention September 7-9, members of NARO passed a series of resolutions outlining their concerns that these practices not only negatively impact State and local tax revenues and consumer pocketbooks but prevent an accurate audit of related transportation and processing fees charged by pipeline carriers.

"With another winter heating season just around the corner, the ever- widening gap between wellhead price and burner-tip prices paid by consumers is creating economic havoc not only in the oilpatch but across the nation. NARO has resolved to commit effort and resources to informing and educating State government officials, royalty owners, independent producers and the general public about the possible need for legislative or regulatory remedies to the problem," noted Jerry Simmons, executive director of the Oklahoma City-based organization.

Over 300 convention attendees gathered on Thursday, Sept. 7, to hear presentations from a panel of eight industry and public sector experts during NARO's special three-hour Gas Marketing Program. Panelists included George Wilson, Attorney, Dallas, Texas; Mary Ellen Denomy, CPA, Rifle Colorado; Steve Hartmann, Executive Director, University of Texas Land Office; Mary Williams from the Denver office of the U.S. Minerals Management Service; William Geise, Texas Railroad Commission Gas Services Section; Steve Howell, an independent producer from Marshall, Texas; Martin Fleming, Government Relations rep from Dallas-based Noble Royalties; Ed Smith, Mayor of Marshall, Texas; Dan Schooley, Schooley and Associates of Tulsa,, Okla.; Erick Nordling, Executive Secretary of Southwest Kansas Royalty Owners Assn.; and Obie O'Brien, government relations specialist with Apache Corporation of Houston, Texas.

NARO President Linn A. Willers of Jacksonville, Fla., summed up the situation at the association's business session where the NARO resolutions were unanimously approved. "We must take action, now, to help preserve the integrity of natural gas production, or the marketing system could be facing a meltdown in the coming months and years. The proliferation of Master Limited Partnerships which create virtual regional monopolies in the pipeline gathering sector, coupled with relatively ineffective or non-existent intrastate regulatory oversight, has resulted in enormous profits for a handful of companies at the expense of independent producers without pipeline capabilities, royalty interest owners and consumers of natural gas and its by- products. It is essential to the health of our industry that NARO does its best to support a competitive natural gas market and transparency in the area of contractual transportation agreements."

2006 RESOLUTIONS OF THE NATIONAL ASSOCIATION OF ROYALTY OWNERS September 9, 2006 * Irving, Texas

WHEREAS, The National Association of Royalty Owners (NARO) is the only national organization representing, solely and without compromise, the interests of the nation's estimated 5 million owners of oil and gas mineral rights; and

WHEREAS, Royalty Owners have a material interest in the revenues received for production from their oil and gas properties; and

WHEREAS, Certain practices by the natural gas transportation and marketing sector of the oil and gas industry prevent Royalty Owners, Independent Producers and other affected parties from determining if they are being properly paid for their proportional interests; and

WHEREAS, These practices also have an adverse economic impact not only on Royalty Interest Owners, but also on State severance tax revenues, Independent Producers without pipeline transportation capability, Municipal Utilities and the nation's Consumers; and

WHEREAS, The detrimental economic effects of these practices are not limited to specific geographic regions, but are national in scope;

BE IT THEREFORE RESOLVED, That NARO

1. Will endorse and actively support, legislative or regulatory efforts to remove the veil of confidentiality from contractual agreements between natural gas producers and transporter/purchasers.

2. Will endorse and support any legislative or regulatory initiatives that would strengthen oversight of Intrastate natural gas affiliate sales transactions.

3. Will, because of nationwide concern over the increasing gap between wellhead and end-user prices, commit effort and resources to better inform and educate State Governmental Officials, Royalty Owners, Independent Producers and the General Public regarding this critical issue.

Contact: Jerry Simmons (405) 286-9400 naro@naro-us.org

National Association of Royalty Owners

CONTACT: Jerry Simmons of National Association of Royalty Owners,+1-405-286-9400, naro@naro-us.org

Web site: http://www.naro-us.org/

Source: PRNewswire

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