§ 15-74-602 - Fraudulently withholding payments. - Arkansas Statutes

15-74-602. Fraudulently withholding payments.

(a) If the first purchaser, or owner of the right to drill and produce substituted for the first commercial purchaser as provided in this subchapter, violates this subchapter by willfully withholding payments without just cause or through bad faith from persons legally entitled to the proceeds from production, the court may award, in addition to the unpaid amount of proceeds and interest as provided in 15-74-601, a penalty in an amount not to exceed simple interest at a rate of fourteen percent (14%) per annum on the amount of the unpaid proceeds from the due date as provided in 15-74-601 and a reasonable attorney's fee.

(b) The terms of this section shall not be applicable to any producing unit or well that produces liquid hydrocarbons only, or liquid hydrocarbons associated with the production of gas, or gas produced associated with the production of liquid hydrocarbons.