C&E Launches New Royalty Incentive Program

New Tools Encourage Investment and Development of State-Owned Minerals

For Immediate Release
Contact: Patrick Courreges, 225-342-0510

BATON ROUGE – The Louisiana Department of Conservation and Energy (C&E) Office of State Resources is implementing a new royalty relief program aimed at re-invigorating interest and investment in developing Louisiana’s oil and gas resources.

C&E staff worked with stakeholders to develop the 2026 State Lease Investment Program, approved earlier this month by the State Mineral and Energy Board, creating a set of royalty reduction incentives that can apply to both new and existing state mineral leases. The program is intended to encourage increased oil and gas production from state lands and water bottoms.

C&E Secretary Dustin Davidson explained that the initiative is part of the department’s fulfillment of the directives Governor Jeff Landry laid out in Executive Order JML 25-072 of 2025, entitled “Unleashing Louisiana’s Energy Production” and the vision described by the governor in unveiling the Whole-of-Louisiana Energy Strategy earlier this year.

“While we do look to explore all energy options in this state, Louisiana’s traditional oil and gas exploration and production industry still plays a huge role in our economic future, driving job and business growth as we expand our role in providing fuel to our nation and the world,” Davidson said. “But we also know that there are other places where oil and gas can be found, so the department has worked to put together incentives to remind companies that Louisiana has always been a place to invest oil and gas dollars, to the mutual benefit of companies and our people.”

The program lays out a process for amending existing state leases to allow for reducing royalties by up to 8 percent (but never reducing it below the legal floor of 12.5 percent) for up to seven years for newly drilled wells or for orphaned wells brought back into production. Operators re-starting production on wells shut in for six months or longer, or operators doing substantive workovers can receive the benefit for up to six years. For newly proposed leases, the Mineral and Energy Board could give consideration to bids below traditional rates, taking all factors into account.

The Board approved the program for an initial period of two years in which operators could apply for the relief, with extensions of up to two years at a time for the program as a whole.

“Setting a two-year time period on the availability of the program gives industry some certainty that there is time to appropriately plan while also giving C&E and the Board a chance to assess how well it is working,” Davidson said. “We want to make sure we are being responsive to the drivers of our energy economy, while still protecting the interests of our state and its citizens.”

For questions or more information on the program, please visit www.dce.louisiana.gov.

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