Unsubstantiated Allegations of Royalty Fraud

We investigated allegations that a gas company underpriced carbon dioxide (CO2) produced from Federal leases and deducted unallowable costs from its CO2 production that resulted in a potential loss of Federal royalties.

We did not substantiate the allegations. We found the company’s pricing used to calculate royalty payments associated with the sale of CO2 was comparable to competitors. We also found the company’s transportation allowances deducted during Federal royalty calculations complied with the Government’s permitted threshold.