Opinion ID: 2611955
Heading Depth: 2
Heading Rank: 2

Heading: Coronado's Appeal

Text: Coronado raises two issues on appeal. The first is whether the district court erred in dismissing Coronado's fraud claim. We need not address this issue since we have upheld the jury award based on conversion. The second issue is whether the district court erred by not applying the statutory interest rate of 18 percent. Coronado argues that W.S. 30-5-301 to -305 are applicable to the net profits interest entitling it to an interest rate of 18 percent on the unpaid proceeds. We agree and reverse and remand for a recalculation of the appropriate interest. The Royalty Payment Act [W.S. 30-5-301 to -305] is a remedial statute intended to stop oil producers from retaining other people's money for their own use. [Independent Producers Marketing Corp. v.] Cobb, 721 P.2d [1106,] 1110 [ (Wyo.1986) ].    Equity is not a factor for consideration because there are no exceptions in the Act providing justification for royalty nonpayment. Cities Serv. Oil & Gas Corp. v. State, 838 P.2d 146, 156 (Wyo.1992). The Act is to be liberally construed to effectuate its remedial purpose. Moncrief v. Harvey, 816 P.2d 97, 105 (Wyo.1991). The relevant portions of the Act provide: The proceeds derived from the sale of production from any well producing oil, gas or related hydrocarbons in the state of Wyoming shall be paid to all persons legally entitled thereto, except as hereinafter provided, commencing not later than six (6) months after the first day of the month following the date of first sale and thereafter not later than sixty (60) days after the end of the calendar month within which subsequent production is sold, unless other periods or arrangements for the first and subsequent payments are provided for in a valid contract with the person or persons entitled to such proceeds. Payment shall be made directly to the person or persons entitled thereto by the lessee or operator or by any party who assumes such payment obligation under any legal arrangement. W.S. 30-5-301(a) (1983) (emphasis added). Any lessee or operator, purchaser or other party legally responsible for payment who violates the provisions of this article is liable to the person or persons legally entitled to proceeds from production for the unpaid amount of such proceeds, plus interest at the rate of eighteen percent (18%) per annum on the unpaid principal balance from the due date specified in W.S. 30-5-301(a). W.S. 30-5-303(a) (1994 Cum.Supp.). The statute unambiguously requires the party who has the legal obligation to pay any proceeds from the production of an oil or gas well to make the payments in accordance with either the time set out in the statute or within a time frame established by a legal agreement between the parties. Failure to do so results in liability for the amount of the unpaid proceeds plus 18 percent per annum interest. There are no exceptions. Cities Serv., at 156. The net profits owed to Coronado are proceeds derived from the sale of production from any well producing oil   . W.S. 30-5-301(a). The agreement provided that the net profits were to be computed on the basis of the gross proceeds of oil    produced, saved and sold from    the field. Ferguson did not remit Coronado's share of the proceeds as required; the statute mandates an interest rate of 18 percent on the delinquent amount.