XOM Exxon Mobil Corp

By Dean Seal

Exxon subsidiary XTO Energy has agreed to pay $16 million to resolve claims that it knowingly underpaid royalties owed on natural gas extracted from federal and Native American lands.

The U.S. Department of Justice alleges that between 2009 and 2017, the oil and natural-gas company failed to pay royalties on carbon dioxide and improperly deducted both carbon-dioxide transportation costs and costs necessary to put extracted gas into a marketable condition.

The actions allegedly violate the False Claims Act, which stipulates that lessees of federal and Native American lands must put gas in a marketable condition at no cost the U.S.

XTO and the DOJ have agreed to settle the allegations with no determination of liability.

The Exxon unit said in a statement that it "never viewed this as a False Claims Act case."

"This was a difference of opinion over the non-binding nature of agency guidance and other typical royalty issues," the company said in a statement. "We were happy to resolve this long-standing matter."

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

November 01, 2023 12:47 ET (16:47 GMT)

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