A Houston, Texas energy company with a strong presence in Oklahoma and regional offices in Oklahoma City has agreed to pay more than $2 million to settle a federal court case filed against it by the Department of Justice.
Citation Oil and Gas Corp. and its affiliates, Citation 2002 Investment Limited Partnership and Citation 2004 Investment Limited Partnership agreed to the $2.25 million settlement.
It will settle allegations made under the False Claims Act that they had underpaid royalties owed on natural gas produced from federal lands in Wyoming.
“The United States allows companies to remove gas from public lands, which belong to all of us in exchange for the full payment of royalties owed,” sad Acting Assistant Attorney General Chad Readler of the Justice Department’s Civil Division. “This settlement demonstrates that the government will hold accountable those who seek to take improper advantage of the federal royalty program at the expense of American taxpayers.”
U.S. Attorney Bob Troyer in Denver, Colorado also made the announcement, explaining that Citation was accused of deducting the cost of making natural gas into a marketable product from its royalties.
Citation has a heavy presence in southern Oklahoma following its 1985 purchase of the Healdton II Unit located west of Ardmore. Since then, the firm has expanded its asset base with several acquisitions of mature, shallow oil property from Mobil, Shell, Arco, Tenneco and Unocal.
In 2010, Citation purchased more than 500 leases and units in 69 fields in the state from Noble Energy.
Three years ago, the company increased its proved reserves with its Chesapeake Energy acquisition in the Ardmore Basin.
