Office of Public Affairs
FOR IMMEDIATE RELEASE
Monday, June 20, 2011

Anadarko and Kerr-Mcgee to Pay More Than $17 Million to Resolve Allegations of Royalty Underpayments from Federal and Indian Lands

WASHINGTON – Anadarko Petroleum Corporation, Kerr-McGee Corporation and their affiliates have agreed to pay the United States more than $17 million to resolve claims that the companies violated the False Claims Act by knowingly underpaying royalties owed on natural gas produced from federal and Indian leases, and numerous additional administrative claims,

the Justice Department announced today. Anadarko is among the largest independent oil and natural gas exploration and production companies in the world. Anadarko and Kerr-McGee were independent companies and were separately sued when this case was originally filed in 1996. In June of 2006, Kerr-McGee Corporation became a wholly-owned Anadarko subsidiary.

Congress has authorized federal and Indian lands to be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced. Each month companies are required to report to the U.S. Department of the Interior the amount of royalty that is due. This settlement resolves claims by the United States under the False Claims Act that the Anadarko and Kerr-McGee defendants improperly deducted from royalty values the cost of boosting gas up to pipeline pressures and improperly reported processed gas as unprocessed gas to reduce royalty payments, as well as a series of outstanding administrative claims.

“This case is one in a series of significant oil and gas settlements that demonstrate our commitment to ensuring that companies pay all of the royalties they owe,â€