The Department of Justice issued a press release Monday detailing an agreement they reached with Devon Energy Corporation, Devon Energy Corp. and Devon Energy Production Company LP. The terms of the agreement detail that the companies (collectively ‘Devon’) will pay $6.15 million to the United States to resolve allegations that they “violated the False Claims Act by underpaying and underreporting royalties for natural gas from federal lands in Wyoming and New Mexico.”
Devon is an oil and natural gas exploration and production company based in Oklahoma. Devon was leased federal land by the United States for the purpose of producing natural gas. In exchange, they are required to pay royalties on the value of gas that they produce. Per the terms of the agreement, the gas provided by Devon must be in a “marketable condition,” that poses no cost to the United States.
The initial allegations that claimed that when Devon was calculating the royalties they owed, they “improperly deducted payments to third-parties for gas transportation and processing that included costs to place the gas in marketable condition.” Ultimately, this resulted in Devon “knowingly” underreporting and underpaying the owed royalties to the government, specifically the Department of the Interior.
The Acting Assistant Attorney General, Brian M. Boynton, said of the settlement, “this settlement demonstrates that the government will hold accountable those who take improper advantage of public resources.” Another Acting U.S. Attorney, Matthew T. Kirsch, explained, “we will not allow companies extracting natural resources from those lands to avoid paying what they rightfully owe.”