FOR RELEASE:  May 6, 1993               CONTACT: Tom DeRocco
                                                 (202) 208-3983
                                                       or
                                                 Michael L. Baugher
                                                 (303) 231-3162

         MMS DETAILS CONTRACT SETTLEMENT POLICY (#30025)

     The Department of the Interior's Minerals Management Service
(MMS) announced today a more detailed interpretation of its policy
on royalties due on contract settlements.

     As a general principle, royalties are due on payments received
under contract settlement agreements to the extent the payments are
attributable to production from federal and Indian leases.

     Contract settlements in the natural gas industry became common
in the mid-1980's in response to changing market and regulatory
conditions.  Many companies negotiated modifications or
terminations to solve contract disputes.  These settlements, which
are still occurring, have been expanded to other minerals.

     "The Secretary of the Interior directed that MMS ensure a
mineral royalty collection policy, in cases of contract
settlements, be appropriately developed and fairly implemented,"
said MMS Acting Director Carolita Kallaur.  "These guidelines will
expedite resolution of royalties due the federal government and
could result in the collection of millions of dollars in
royalties."

     MMS is responsible for collecting, accounting for,
distributing bonuses, rents, and royalties from companies that
lease and produce minerals from Indian and federal onshore and
offshore lands.

     In a letter sent to all federal lease holders, the MMS stated
that "Lease terms require that royalties be paid on quantities
produced, remove and sold.  Royalty value is base don the gross
proceeds accruing to the lessee for the disposition of products
produced."

     In the next few weeks, MMS may require lessees and other
royalty payors to provide information regarding contract
settlements related to federal and Indian leases.

                              -MMS-
Subject: PR-5/6/93 Contract Settlement/MMS Details Contract
Settlement Policy (#30025)