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C&E Unveils Proposed Royalty Incentives
Contact: Patrick Courreges, 225-342-0510
Agency seeking public input on plan to boost production on state-owned lands and waters
BATON ROUGE – The Louisiana Department of Conservation and Energy (C&E) Office of State Resources is seeking public comment on a set of guidelines for a proposed 2026 State Lease Investment Program, which would create a system of state lease royalty reduction incentives.
The State Mineral and Energy Board earlier this month approved publication of proposed guidelines outlining a set of royalty reduction incentives on new and existing state mineral leases intended to incentivize and encourage increases in oil and gas production from state lands and water bottoms.
C&E Secretary Dustin Davidson said this action is the next step in C&E’s fulfillment of the directives Gov. Jeff Landry laid out in Executive Order JML 25-072 earlier this year, entitled “Unleashing Louisiana’s Energy Production.”
“Gov. Landry has given us a clear mission here – to remind the industry that Louisiana is still a resource-rich state with much to offer investors and responsible operators in the traditional oil and gas sector,” Davidson said. “Our staff have proposed a way to prime the pump on investing here by giving companies a financial decision that is easier to make in favor of drilling and producing here.”
What the proposed guidelines lay out is a process allowing 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 five years for drilling new wells or re-starting production on wells shut in for six months or longer. They would also allow for similar reductions on new leases proposed by operators taking over orphaned wells. For completely new proposed leases, the Mineral and Energy Board could give consideration to bids below traditional rates, taking all factors into account.
C&E Office of Natural Resources Executive Director Andrew Young said the royalty reduction incentives add to a promising foundation laid by the legislature’s severance reform package during the 2025 session.
“This was an opportunity for policy alignment between the Board and the Legislature, sending a combined signal welcoming investment in Louisiana’s proven oil and gas fields” Young said. “The goal is to stimulate new activity by reducing economic barriers to entry.”
The draft guidelines can be found at -
Interested parties may submit written comment(s) to the Office of State Resources from
Dec. 17, 2025 until Jan. 28, 2026. All comments and correspondence should be directed to Greg Roberts, Director of Land Administration, Office of State Resources (Greg.Roberts@la.gov).
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