FOR RELEASE:  July 18, 1995                 CONTACT:  Tom DeRocco
                                                   (202) 208-3983
                                               Michael L. Baugher
                                                   (303) 231-3162

                 MMS ISSUES IMPROVED GUIDELINES
                       ON ROYALTY PAYMENTS

     The Interior Department's Minerals Management Service (MMS)
today published in the Federal Register a notice of availability
of MMS's recently issued guidelines regarding the extent of time
periods to be covered during reviews and audits of royalty
payments.

     "MMS developed these guidelines in consultation with
affected states, Indian tribes, and the minerals industry to be
more responsive to the public we serve," said MMS Director
Cynthia Quarterman.  

     Controversy arose during the 1980's, when MMS increased
audit activities in compliance with the Federal Oil and Gas
Royalty Management Act.  The resulting orders issued to companies
for royalty underpayments often covered periods more than six
years old.  In response to those orders, many companies have
challenged MMS on statute of limitations grounds, which have been
asserted in federal court cases and a large number of
administrative appeals.

     "MMS has been working to conduct all audits on a
contemporaneous basis consistent with the most effective and
efficient use of audit resources, to provide industry with
earlier closure, and to streamline the royalty collection
process," said Quarterman.

     "The improved guidelines state that it is MMS's policy to
complete audits of royalty payments within 6 years of the date of
payment and to issue audit reports and closure letters within 6
months of completion of audits.  Additionally, the MMS Associate 
Director for Royalty Management has been asked to establish
within the next 12 months necessary processes to shorten the time
required to verify adjustments to royalty payments."

     For more information, contact:  David Guzy, Chief, Rules and
Procedures Staff, Minerals Management Service, Royalty Management
Program, P.O. Box 25165, MS 3101, Denver, CO 80225-0165; (303)
231-3432.

     MMS is the federal agency that manages the nation's natural
gas, oil and other mineral resources on the OCS, and collects,
accounts for and disburses about $4 billion yearly in revenues
from offshore federal mineral leases and from onshore mineral
leases on federal and Indian lands.

                             --MMS--