Tex. Natural Resources Code § 32.203

This is the official text of Tex. Natural Resources Code § 32.203, part of Texas’s Natural Resources Code — governs land, minerals, and natural resource management.

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§ 32.203. COMPENSATORY ROYALTY.

Official statutory text

Compensatory royalty shall be paid to the state on any lease offered and granted under Section 32.201 of this code if the lease is not being held by production on the tract, by production from a pooled unit, or by payment of shut-in royalties in accordance with the terms of the lease, and if oil or gas is sold and delivered in paying quantities from a well located within 2,500 feet of the leased premises and completed in a producible reservoir underlying the state lease or in any case in which drainage is occurring. Such compensatory royalty shall be paid at the royalty rate provided in the state lease based on the value of production from the well as provided in the lease on which such well is located. The compensatory royalty shall be paid in the same proportion that the acreage of the state lease has to the acreage of the state lease plus the acreage of a standard proration unit under statewide field rules or, if applicable, the special field rules adopted by the Railroad Commission of Texas for the field in which the well has been completed. The compensatory royalty is to be paid monthly to the commissioner on or before the last day of the month next succeeding the month in which the oil or gas is sold and delivered from the well. Notwithstanding anything herein to the contrary, compensatory royalty payable under this section shall be no less than an amount equal to double the annual rental payable under the state lease. Payment of compensatory royalty shall maintain the state lease in force and effect for so long as such payments are made as provided in this section.

Status: in_force · Read it on the official government site

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About this page: Statute text is reproduced from official government publishers via the Open US Law dataset (Vaquill AI, snapshot v2026.08, CC BY 4.0). Primary legislative text like this is public domain under the government-edicts doctrine (Georgia v. Public.Resource.Org, 2020). We link every section back to its official source so you can verify it independently.