HB 393 Summary

• Changes royalty rates for Cook Inlet sedimentary basin leases issued on or after July 1, 2024: zero percent on gas production and 5 percent on oil production from newly drilled wells.

• Establishes zero royalty provision for leases on state property south of 68 degrees North latitude if lessees are recovering development costs for wells drilled on or after July 1, 2024, including costs for new drilling, well sidetracks, and workovers.

• Requires the commissioner of natural resources to negotiate with existing Cook Inlet leaseholders to modify lease terms to comply with the new royalty rates, with no other lease terms subject to change.

• Maintains existing royalty reduction provisions for specific Cook Inlet oil and gas fields discovered before 1988 and Cook Inlet platforms with tiered royalty rates based on production volumes.

• Takes effect July 1, 2024.