New Mexico state land comissioner Ray Powell. Image courtesy of the Democratic Party of New Mexico.

An audit conducted by New Mexico’s State Land Office found that Houston-based Apache owed the agency $3 million in royalties.

Land Commissioner Ray Powell told the AP that the review of Apache’s production in Lea County uncovered royalties owed to the state going back to January 2009.

Apache has now paid the royalties.

The State Land Office has performed about 40 reviews of oil and gas production in the state since July.

So far, the agency has taken in an additional $4 million in revenue this year thanks to the audits and is on track to beat its 2013 earnings.

Powell said bookkeeping errors and confusion over the state’s royalty and tax structures are to blame for the missing royalty payments.

The agency is looking into ways to make the royalty process easier to navigate.

Apache ran two rigs in the Yeso play in New Mexico during the second quarter of 2014 and spudded 20 wells, with four horizontal and 16 vertical.

Yeso is located on the northwest shelf of the Permian Basin.

The company brought sixteen wells onto production at Yesto, adding 1,578 barrels of oil per day and 3,351 cubic feet of gas per day to the field’s output.

Apache also has 10 horizontal wells in the Cedar Lake area of New Mexico that are producing a combined 3,700 barrels of oil per day.


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