By Denny Jacob

The U.S. Department of Justice said Hilcorp San Juan L.P. agreed to pay $34.6 million to resolve allegations that it knowingly underpaid royalties owed on oil and natural gas produced from federal lands.

The DOJ said the oil and gas company's agreement resolves allegations that it knowingly made payments to the federal government based on estimated volumes and prices without indicating that the payments were based on estimates and without subsequently making payments in the following month based on actual volumes and values from August 2017 through December 2018.

Congress allows federal lands to be leased for gas and oil production in exchange for royalty payments on the value of the oil and gas produced. Although lessees may make estimated royalty payments the month following production, they are required to pay actual royalties at the end of the month following the month in which the estimated payment is made.

Hilcorp Energy didn't immediately respond to a request for comment.

Write to Denny Jacob at denny.jacob@wsj.com

(END) Dow Jones Newswires

January 19, 2024 13:30 ET (18:30 GMT)