Form MMS-4110 Oil Transportation Allowance Report

U.S. Department of the Interior
Office of Natural Resources Revenue

1

Oil Transportation Allowance Report
Form MMS-4110
2

PAYOR NAME

ADDRESS

STATE

PAYOR CODE

ZIP
REPORTING
PERIOD

5

8
LEASE
NUMBER

FOR ONRR USE ONLY:

4 REPORT TYPE

CITY

6 7

OMB Control Number 1012-0002
OMB Approval Expires 08/31/2012

9
AGREEMENT
NUMBER

10
PRODUCT
CODE

11
ARM'S-LENGTH/
NON-ARM’S-LENGTH
INDICATOR

to

PRIOR PERIOD ACTUAL DATA
b

a
ROYALTY
QUANTITY

ALLOWANCE
RATE PER UNIT

c

ROYALTY
ALLOWANCE
AMOUNT

3

12

FOR PAYOR USE ONLY:

CURRENT PERIOD ESTIMATED DATA
b

a
ROYALTY
QUANTITY

c

ALLOWANCE
RATE PER UNIT

ROYALTY
ALLOWANCE
AMOUNT

1
2
3
4
5
6
7
8
9
10
11
13

PAGE TOTAL

xxxxxxxxxxxx

14

REPORT TOTAL (LAST PAGE ONLY)

xxxxxxxxxxxx

xxxxxxxxxxxx
xxxxxxxxxxxx

IF MORE LINES ARE NEEDED, ATTACH ADDITIONAL PAGES OF FORM MMS-4110

I have read and examined the statements in this report and, to the best of my knowledge, they are accurate and complete.
NAME (FIRST, MIDDLE INITIAL, LAST) (typed or printed)

DATE:

AUTHORIZED SIGNATURE:

DATE:

NAME OF PREPARER:

THIS INFORMATION SHOULD BE CONSIDERED (Please check one)

TELEPHONE NUMBER:

PROPRIETARY

NONPROPRIETARY

Paperwork Reduction Act of 1995 (PRA) Statement: The PRA (44 U.S.C. 3501 et seq.) requires us to inform you that we collect this information to determine product valuation and to ensure that royalties are paid properly. ONRR uses the information to evaluate the reasonableness of allowances claimed.
Responses are required to obtain a benefit. Proprietary information is protected in accordance with standards established by the Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1733), the Freedom of Information Act (5 U.S.C. 552(b)(4)), and the Department regulations (43 CFR 2). An agency
may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB Control Number. Public reporting burden for this form is estimated to average 5 hours per response, including the time for reviewing instructions, gathering and maintaining
data, and completing and reviewing the form. Direct comments regarding the burden estimate or any other aspect of this form to the Office of Natural Resources Revenue, Attention: Rules & Regs Team, P.O. Box 25165, Denver, CO 80225-0165.

FORM MMS-4110 (revised 3/2012)

Page 1 of 4

Oil Transportation Allowance Report
Form MMS-4110
General Instructions
The purpose of Form MMS-4110 is to provide for the determination and reporting of costs for transporting
oil under 30 CFR 1206.55. Allowable transportation costs must be based upon the following criteria: (1)
arm's-length based allowances--allowable cost incurred under an arm's-length contract; and (2) non-arm'slength based allowance--actual, allowable operating costs plus depreciation, plus a return on the
undepreciated portion of the depreciable capital investment. Allowable costs divided by lease production
yields the transportation allowance rate.
In accordance with 30 CFR 1206.54, a payor may deduct from royalty payments the reasonable actual
costs incurred by the lessee to transport oil from an onshore lease to a point off the lease; provided,
however, no transportation will be granted for transporting oil taken as Royalty-in-Kind (RIK). Costs for
transporting products, excluding waste products which have no value, which are not valued for royalty
purposes will be allowed only if the lessee has secured prior approval from ONRR.
For transportation costs incurred under arm's-length conditions, Schedule 1 will be used to determine the
allowance and will be submitted to ONRR with Page 1 of Form MMS-4110. For transportation costs
incurred under other than arm's-length conditions or when transportation costs are a combination of arm'slength and non-arm's-length costs, Schedules 1, 1A, 1B, and 1C, as appropriate, will be used to determine
the allowance and will be submitted to ONRR with Page 1 of Form MMS-4110.
For purposes of this report, a sale means the disposition of oil under an arm's-length contract, non-arm'slength contract, or no contract situation. A transportation facility means a physical system associated with
the transportation of oil from the lease to a point of disposition remote from the lease. A transportation
segment is any mode of transportation from one point to another for which the payor can associate
unique, identifiable costs. A transportation segment may be part of the total transportation facility or may
constitute the entire facility. Examples of a transportation segment would be an origin-to-destination
pipeline owned by the lessee to transport the oil to a point on a third-party pipeline through which the oil is
transported under an arm's-length contract to the sales point.
Form MMS-4110, Page 1, is used to report the actual royalty allowance amounts claimed during the
reporting period.
Form MMS-4110, Schedule 1, is used to accumulate segment costs and to compute the royalty allowance
rate for a transportation facility. A separate Schedule 1 must be completed for each Lease
Number/Agreement Number (if applicable), combination.
Form MMS-4110, Schedule 1A, summarizes operating, maintenance, and overhead costs for a non-arm'slength or no contract transportation segment.
Form MMS-4110, Supplemental Schedule 1A, is used to detail operating, maintenance, and overhead
costs that could not be shown on Schedule 1A because of its limited space.
Form MMS-4110, Schedule 1B, summarizes depreciation and undepreciated capital investment costs for
a non-arm's-length or no contract transportation segment.

FORM MMS-4110 (revised 3/2012)

Page 2 of 4

Oil Transportation Allowance Report
Form MMS-4110
Line-by-Line Instructions
1.

Enter the payor name and address used to report royalties and transportation deductions on
Form MMS-2014.

2.

Enter the same payor code as used on Form MMS-2014.

3.

Reserved for payor comment.

4.

Enter the report type indicator as follows: “1” if this is an initial report for the lease and/or
agreement number and product code in columns 7 through 9 (only column 12 will be completed); “2”
if this is a routine form to report the reporting period actual data and current period estimated data
(both columns 11 and 12 must be completed); or “3” if this is a corrected report to correct previously
reported data. A corrected report requires a two-line entry. The first line reverses the original entry
using a minus sign (-) in columns 11a, 11b, 11c, 12a, 12b, and 12c, as applicable, and the second
line shows the correct entry.

5.

Enter as the reporting period the period covered by the actual cost data for the transportation
allowance being reported in column 11. If this is an initial report for start-up, the completion of
column 11 is not applicable. Enter as the reporting period the period covered by the estimated cost
data being reported in column 12. The reporting period will be controlled by the arm’s-length/payorowned indicator in column 10. If a “NARM” or “BOTH” is shown in column 10, the reporting period
will be: (a) for the initial reporting period, beginning the month the lessee is first authorized to deduct
a transportation allowance and ending at the end of the calendar year or when the transportation
terminates, whichever is earlier, or (b) after the initial reporting period, beginning the first day of the
calendar year and ending the last day of the calendar year or when the transportation terminates,
whichever is earlier. If a “ARMS” is shown in column 10, the reporting period will be: (a) for the
initial reporting period, beginning the month the lessee is first authorized to deduct a transportation
allowance and ending when the contract or rate terminates, is modified or amended, or the end of
the calendar year, whichever is earlier, or (b) after the initial period, beginning the first day after the
period covered by the previous Form MMS-4110 and ending when the contract or rate terminates, is
modified or amended, or the end of the calendar year, whichever is earlier.

6.

Line count; i.e., the number of allowances being reported.

7.

Enter the same Lease Number as used on Form MMS-2014.

8.

Enter the same Agreement Number (if applicable) as reported on Form MMS-2014.

9.

Enter the same product code as used on Form MMS-2014.

10.

Enter an arm's-length/non-arm’s-length indicator as follows: "NARM" if 100% of the transportation
costs were incurred under non-arm's-length conditions; "BOTH" if transportation costs were a
combination of arm's-length and non-arm's-length conditions; or "ARMS" if 100% of the
transportation costs were incurred under arm's-length conditions.

11.

Column 11 is used to report actual cost data for the reporting period. Enter in column 11a the royalty
quantity transported during the reporting period. Enter in column 11b the lesser of the transportation
allowance rate from Schedule 1, line 15, or 50 perc ent of the unit value of the oil unless MMS has
approved a rate in excess of 50 percent. Enter in column 11c the royalty allowance amount determined
by multiplying column 11a by column 11b. (Royalty quantity is the total of the monthly royalty quantities
actually transported during the reporting period.)

FORM MMS-4110 (revised 3/2012)

Page 3 of 4

Oil Transportation Allowance Report
Form MMS-4110
Line-by-Line Instructions
12.

Column 12 is used to report estimated transportation allowance for the current reporting period. The
transportation quantity or allowance rate may be the sa me as the actual quantity or rate reported in
column 11. If so, enter the corresponding values from columns 11a, 11b, and 11c into columns 12a,
12b, and 12c accordingly. If the lessee believes the quantity or the rate for the current reporting period
will be higher or lower than the reporting period,he
t estimates should be adjusted upward or downward
accordingly. Care should be taken to ensure that estimates are as accurate as possible and that the
royalty allowance amount does not exceed 50 percentof the expected royalty value without prior ONRR
approval. If a transportationallowance is not applicable to the current period, enter zeros in columns
12a, 12b, and 12c.
Estimates for transportation facility start-up must be computed as follows:
If transportation costs are to be incurred solely under arm’s-length conditions, enter in column 12a
the estimated royalty quantity to be transported during the current period. In column 12b enter the
allowance rate per unit as specified in the arm’s-length contract and shown on Schedule 1, line 15.
In column 12c enter the estimated royalty allowance amount computed by multiplying column 12a
times column 12b. (Note: the allowance rate cannot exceed 50 percent of the unit value of the
product without prior ONRR approval.)
For transportation costs to be incurred under non-arm’s-length conditions or a combination of both
arm’s-length and non-arm’s-length conditions, Schedules 1, 1A, and 1B, as appropriate, shall be
used in estimating the allowance rate. Enter in column 12a the estimated royalty quantity to be
transported. In column 12b enter the lesser of the estimated transportation allowance rate from
Schedule 1, line 15 or 50 percent of the expected unit value of the gas product transported for the
selling arrangement unless ONRR has approved a rate in excess of 50 percent. In column 12c enter
the royalty allowance amount determined by multiplying column 12a by column 12b.)
Enter page totals on line 13.
If more than one Form MMS-4110 is submitted, add the amount on line 14 for each page and enter
the total only once on line 14 of the last page of the Oil Transportation Allowance Report.

Indicate by checking the appropriate box whether
nonproprietary.

FORM MMS-4110 (revised 12/2008)

the information should be considered proprietary or

Page 4 of 4

1

2

LEASE NUMBER:
AGREEMENT NUMBER:

PAYOR NAME AND CODE

FACILITY NAME/ID NUMBER:

ADDRESS
CITY

From

OMB Control Number 1012-0002
OMB Approval Expires 08/31/2012

Oil Transportation Facility Summary Sheet
Form MMS-4110, Schedule 1

U.S. Department of the Interior
Office Of Natural Resources Revenue

STATE
(a)

(b)

Segment
Name or
Number

Mode
of
Transportation

ZIP

PERIOD: (mm/dd/ccyy)

(c)

(d)
Arm's-Length
Contract/
Arm's-Length/
Non-Arm’s-Length Non-Arm’s-Length
Operating Costs
Indicator

(e)

(f)

Depreciation

Rate
of
Return

to
(g)
Undepreciated
Capital
Investment at
Beginning of Year

(h)
Return on
Investment
(f) x (g)

To

A. TRANSPORTING OIL TO A REMOTE TREATMENT FACILITY.
$

$

$

$

3
4
5
6
7

Totals

$

$

¸

$

Allowance rate = (lines 8d + 8e + 8h)/Volume of production
transported from the lease to processing/treatment facility.

Part A Total Cost

=
Part A Total Volume

$

8

$

9

Cost per Barrel

B. TRANSPORTING OIL TO A REMOTE SALES POINT.
$

$

$

$

10
11
12

Totals
Allowance rate = (lines 13d + 13e + 13h)/Volume of products
transported from the lease plant to the sales point.

$

$

$
_.

=

.

$
Part B Total Cost

Part B Total Volume

Total Unit Allowance Rate = the sum of line 9h and 14h. The allowance rate cannot exceed 50 percent
of the value of the product without prior ONRR approval.
THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
FORM MMS-4110, SCHEDULE 1 (revised 3/2012)

PROPRIETARY

13

$
Cost per Barrel

14
15

Allowance Rate
NONPROPRIETARY
Page 1 of 3

Oil Transportation Facility Summary Sheet
Form MMS-4110, Schedule 1
Instructions
A separate Form MMS-4110, Schedule 1 must be used to determine the royalty transportation allowance
amount for each Lease Number and Agreement Number (if applicable), combination. No allowance may
be claimed if the facility is not off the lease.
Part A is used to accumulate segment costs and to compute an allowance for transporting oil from the
lease to a separation facility remote from where the lease is situated. Part B is used to accumulate
segment costs and compute an allowance for transporting oil from either a lease, or from a separation
facility, to the nearest available market place or sales outlet remote from the lease. When oil is
transported to a separation facility, treated, and clean oil is transported from the facility to a remote sales
point, both Parts A and B must be used in computing the allowance.
The payor must submit a clear schematic diagram, on no larger than 8-1/2 by 11-inch paper, illustrating
the transportation facility from the lease to the point where the products are disposed of. Separation
facilities, points of measurement, and points of sale or disposition for royalty purposes must be
designated.
1. Enter the same payor name, payor code, and address as used on Page 1 of Form MMS-4110.
2. Enter the same Lease Number and Agreement Number (if applicable), combination as used on Form
MMS-2014. Enter the transportation facility name or identification number (as designated by the
payor) unique to the transportation facility. (Note: For a transportation facility consisting of only one
segment, the segment name or number will be the same as the facility name or number.)
Enter the reporting period. The period must be the same period shown in item 5 on Form MMS-4110,
OiI Transportation Allowance Report.
The following instructions are applicable to Part A (lines 3-7) and Part B (lines 10-12):
a. Describe each segment of the transportation facility; e.g., from Lease No. XX-YYYYY-Z to St.
John treatment facility.
b . Identify the mode of transportation under which costs are incurred; e.g., pipeline, truck, rail,
tanker, barge, etc.
c . Indicate how facility/segment costs were incurred ("NARM" denotes non-arm’s-length costs which
include non-arm's-length and no contract situations; "ARMS" denotes arm's-length contract costs).
d. If transportation costs were incurred under arm's-length condition, enter the total costs incurred for
the period by multiplying the transportation rate by the volume transported at that rate. No
transportation allowance may be given for substances or products that are not valued for royalty
purposes without prior ONRR approval. If two or more rates are applicable during the reporting
period, the cost incurred under each rate must be computed and summed. If, for example, the
rates were $1.00 per barrel for 150 barrels and $1.50 per barrel for 100 barrels, the transportation
costs would be $1.00 times 150 barrels plus $1.50 times 100 barrels or $300.00. Do not complete
columns (e) through (h) for arm's-length costs.
If transportation costs were incurred under other than arm's-length conditions, complete columns
(d) through (h). Using Schedule 1A determine the operations, maintenance, and overhead
expenditures and enter in column (d). A separate Schedule 1A must be completed for each
individual segment.

FORM MMS-4110 SCHEDULE 1 (revised 3/2012)

Page 2 of 3

Oil Transportation Facility Summary Sheet
Form MMS-4110, Schedule 1
Instructions
e. Enter depreciation costs for the reporting period. Schedule 1B must be used to determine
depreciation costs.
f.

The rate of return shall be the industrial rate associated with Standard and Poor's BBB rating.
Enter the monthly average rate as published in Standard and Poor's Bond Guide for the first
month of the reporting period.

g. Enter the beginning-of-year undepreciated capital investment. Schedule 1B must be used to
determine beginning-of-year undepreciated capital investment. A separate Schedule 1B must be
completed for each individual segment.
h. Calculate the return on undepreciated capital investment by multiplying column f by column g.
Total columns d, e, and h and enter on lines 8d, 8e, and 8h, or lines 13d, 13e, and 13h, accordingly.
For Part A, sum lines 8d, 8e, and 8h and enter on line 9 - Total Costs. Enter total volume of
production transported from the lease, as measured at the approved royalty measurement point, to the
facility on line 9 - Total Volume. (Note: The total throughput volume excluding waste products that
have no value must be used.) Compute the allowance cost per barrel, to six decimals, by dividing line
9 - Total Cost, by line 9 - Total Volume, and enter on line 9h.
For Part B, sum lines 13d, 13e, and 13h and enter on line 14 - Total Cost. Enter the total volume
transported from the lease or treatment facility on line 14 - Total Volume (Note: Total volume is the
volume transported through the transportation facility for the prior reporting period.) Compute the
allowance cost per barrel, to six decimals, by dividing line 14 - Total Cost, by line 14 - Total Volume,
and enter on line 14h.
15. The total unit allowance rate is equal to the sum of line 9h plus line 14h. Enter this allowance rate on
line 15. The allowance rate cannot exceed 50 percent of the value of the product without prior ONRR
approval.
Indicate by checking the appropriate box whether the information should be considered proprietary or
nonproprietary.

FORM MMS-4110 SCHEDULE 1 (revised 3/2012)

Page 3 of 3

OMB Control Number 1012-0002
OMB Approval Expires 08/31/2012

U.S. Department of the Interior
Office of Natural Resources Revenue

PAYOR IDENTIFICATION BLOCK
Payor Name and Code:
Lease Number:

Non-Arm‘s-Length Transportation
System/Segment Operations, Maintenance,
and Overhead Expenditures
Form MMS-4110, Schedule 1A

Agreement Number:
Facility ID No:
Segment ID No:
Period:
(mm/dd/ccyy)

to

Estimated Costs - Check when estimating costs for systems/segment start-up.
A.

Lessee's Operating Costs for System/Segment
Operations Supervision and Engineering

$

1

Operations Labor

2

Utilities

3

Materials

4

Ad Valorem Property Taxes

5

Rent

6

Supplies

7

Other (specify). Attach Supplemental Schedule 1A

8

as necessary

9

Total Operating Costs -- Subtotal
B.

$

10

$

11

Lessee's Maintenance Costs
Maintenance Supervision
Maintenance Labor

12

Materials

13

Other (specify). Attach Supplemental Schedule 1A

14
15

as necessary
Total Maintenance Costs -- Subtotal
C.

$

16

$

17

Lessee's Overhead Allocation (specify)
18
19

Other (specify) use Supplemental Schedule 1A
Total Overhead Allocation

$

20

D.

Total Operating and Maintenance Costs
(Line 10 + line 16 + line 20)

$

21

E.

Allocated to Segment
Lease Volume

$

22

F.

Segment Allocated Operating, Maintenance, and
Overhead Costs
(Line 21 x line 22) Enter in column d, Schedule 1

$

23

:

Total throughput

THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
FORM MMS-4110, SCHEDULE 1A (revised 3/2012)

PROPRIETARY

NONPROPRIETARY
Page 1 of 4

Non-Arm‘s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form MMS-4110, Schedule 1A
Instructions
Schedule 1A is used to record reasonable actual operating, maintenance, and overhead costs for a
transportation segment for the prior reporting period. A separate Schedule 1A must be completed for
each segment in the transportation facility. The costs for all transportation facility segments are
accumulated on Schedule 1 to determine the total operating costs for the facility. A list of allowable and
nonallowable costs is provided herein and should be used as a guide in determining operating,
maintenance, and overhead costs.
Complete the payor information block as follows.
Enter the same payor name and code as used on Form MMS-4110, Oil Transportation
Allowance Report.
Enter the same Lease Number and Agreement Number (if applicable), as used on
Form MMS-2014.
Enter the transportation facility name or identification number (as designated by the payor) unique to the
transportation facility.
Enter the transportation segment name or identification number (as designated by the payor) unique to the
transportation segment. (Note: For a transportation facility consisting of only one segment, the segment
name or identification number will be the same as the facility name or identification number.)
Enter the reporting period. The period must be the same period shown in item 5 on Form MMS-4110, Oil
Transportation Allowance Report.
Instructions for Computing Operating, Maintenance, and Overhead Costs.
Note: If estimated costs are used for start-up, check the estimated cost block.
Identify and list on Part A and Part B all operating and maintenance costs directly attributable to the
transportation facility/segment during the reporting period. If additional space is needed to identify or
explain other cost items, complete and attach a Supplemental Schedule 1A noting the nature and amount
of the cost.
Line 10 - Enter total operating costs (the sum of lines 1-9).
Line 16 - Enter total maintenance costs (the sum of lines 11-15).
Part C - Identify and list all overhead costs directly allocable and attributable to the operations and
maintenance of the transportation facility/segment. If additional space is needed, complete and attach a
Supplemental Schedule 1A noting the nature and amount of the expenditure.
Line 20 - Sum lines 17 through 19 to obtain the total overhead expenditures directly allocable to the
facility/segment.
Line 21 - Sum lines 10, 16, and 20 to obtain the total operating costs.
Part E - Enter the lease volume transported through this segment and the total throughput of this segment.
(Note: The total throughput quantity excluding waste products that have no value must be used.) Divide
the lease volume by the total throughput and enter answer in 6 decimal places on line 22 (.XXXXXX).

FORM MMS-4110, SCHEDULE 1A (revised 3/2012)

Page 2 of 4

Non-Arm‘s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form MMS-4110, Schedule 1A
Instructions
Part F - Determine the allocated operating, maintenance, and overhead costs for the segment by
multiplying line 21 times line 22 and enter on line 23. Enter in column (d) of Part A or B, Schedule 1, as
appropriate.
Indicate by checking the appropriate box whether the information should be considered proprietary or
nonproprietary.
ALLOWABLE AND NONALLOWABLE OPERATING, MAINTENANCE, AND CAPITAL COSTS
Allowable Capital Costs - Allowable capital costs are generally those costs for depreciable fixed assets
(including costs of delivery and installation of capital equipment) which are an integral part of the
transportation system. The following capital items are generally considered as allowable: garages and
warehouses, rail haulage equipment including rail spurs, trucks, barges, pipeline compressors and pumps,
and roads.
Nonallowable Capital Costs - Costs incidental to marketing (e.g., on-lease compression, gathering,
separation, dehydration, storage, and treatment). Also, schools, hospitals, roads, sewer and other capital
improvements or equipment not an integral part of the transportation facility are not allowable capital
costs. The capital cost associated with the preparation of an environment impact statement is not
allowable. However, capital costs for environmental equipment that are an integral part of the
transportation facility are allowable.
Allowable Operating Costs - Allowable operating and maintenance costs are those nondepreciable costs
that are directly attributable to the operation and maintenance of a transportation facility/segment. These
expenditures include the following:
1.

Salaries and wages paid to employees and supervisors while engaged in the operation and
maintenance of equipment and facilities.

2.

Fuel and utility costs directly related to transporting lease products.

3.

Chemicals (including rust preventives and thinning agents) and lubricants used for the purpose of
enhancing flow protection, or cleaning.

4.

Repairs, labor, materials, and supplies directly related to transportation equipment and facilities.

5.

Port and toll fees, insurance and ad valorem property taxes (Federal and State income taxes are not
allowable deductions).

6.

Arm's-length rental, leasing, or contract service costs for equipment, facilities, on-site location or
maintenance of equipment and facilities.

7.

General administrative overhead costs (headquarters personnel, telephone service, payroll taxes,
employee benefits, vehicle expenses, office supplies, etc.). The total of these costs shall be limited to
those reasonable expenditures directly attributable and allocable to the operation and maintenance of
the transportation equipment and facilities.

FORM MMS-4110, SCHEDULE 1A (revised 3/2012)

Page 3 of 4

Non-Arm‘s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form MMS-4110, Schedule 1A
Instructions
Nonallowable Operating Costs –
1. Costs incidental to marketing; e.g., on-lease gathering and storage, compression, separation, and
dehydration; also, heaters, treaters, meters, water knockouts, ACT meters, meter sleds, and pumps
(surface, subsurface, and circulating), and other operating costs associated with nonallowable capital
expenditures which are not directly allocable or attributable to the transportation of lease products are
not allowable.
2. Theoretical or actual line losses.
3. Federal and State income taxes, production taxes, royalty payments, or fees such as State severance
taxes.
4. The value of fuel taken from the gas stream and used to run compressors and pumps. Costs for
services that the lessee is obligated to perform at no cost to the Federal Government or Indian owner.

FORM MMS-4110, SCHEDULE 1A (revised 3/2012)

Page 4 of 4

OMB Control Number 1012-0002
OMB Approval Expires 08/31/2012

U.S. Department of the Interior
Office of Natural Resources Revenue

PAYOR IDENTIFICATION BLOCK
Payor Name and Code:
Lease Number:
Agreement Number:

Non-Arm’s-Length Transportation System/Segment
Depreciation and Capital Expenditure Summary
Form MMS-4110, Schedule 1B
1

2

Expenditure
Item

Initial Capital
Investment
and Date
Placed in Service

3

Salvage
Value

Segment ID No:
Period:
(mm/dd/ccyy)
5

Depreciable
Life/Years
of Depreciation
Taken to Date

Undepreciated
Capital
Investment at
Beginning of Year
$

to
6

4

$

$

Facility ID No:

7
Undepreciated
Capital
Investment at
End-of-Year

Depreciation
$

$

Totals

$

$

8

Allocated to Segment (from line 22, Schedule 1A)

$

$

9

Segment Depreciation and Capital Expenditure
(Line 8 x line 9) Enter in column g and e, Schedule 1

$

$

10

THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
FORM MMS-4110 SCHEDULE 1B (revised 3/2012)

PROPRIETARY

NONPROPRIETARY
Page 1 of 2

Non-Arm’s-Length Transportation System/Segment
Depreciation and Capital Expenditure Summary
Form MMS-4110, Schedule 1B
Instructions
Schedule 1B is used to summarize actual or estimated facility/segment depreciation and undepreciated
capital investment for computing return on investment. A separate Schedule 1B must be completed for
each segment in the transportation facility. The costs of all transportation facility segments are
accumulated on Schedule 1 to determine the total depreciation and undepreciated capital investment for
the facility.
Complete the payor identification block (see Schedule 1A instructions).
For each facility/segment capital expenditure item complete one line as follows:
1.

Identify the capital expenditure item.

2.

Enter the initial capital expenditure amount and the date the expenditure was placed in service.

3.

Enter a reasonable salvage value.

4.

Enter the depreciable life of the expenditure and the number of years of depreciation taken to date.

5,

Enter the undepreciated capital investment at beginning-of-year. In computing this value, salvage
must be deducted from the initial capital investment.

6.

Enter the amount of depreciation to be taken for the year. In computing depreciation, the payor may
elect to use either a straight-line depreciation method or a unit of production method based on the life
of the equipment or the life of the reserves which the transportation facility/segment services. Once
an election is made, the payor may not alternate methods without ONRR approval. Equipment shall
not be depreciated below a reasonable salvage value.

7.

Enter the undepreciated capital investment at end-of-year. This is computed by subtracting
depreciation (column 6) from the beginning-of-year undepreciated capital investment (column 5).
This amount will be used as the next year's beginning-of-year undepreciated capital investment.

8.

Total columns 5 and 6 and enter on Schedule 1, Part A, columns e and g, or Part B, columns e and g,
accordingly.

9.

Enter the "Allocated to Segment" amount from line 22, Schedule 1A, on line 9, columns 5 and 6.

10. Multiply line 8 by line 9 for columns 5 and 6 and enter on line 10 and on Schedule 1, columns
g and e, Parts A and B as appropriate.
Indicate by checking the appropriate box whether the information should be considered proprietary or
nonproprietary.

FORM MMS-4110 SCHEDULE 1B (revised 3/2012)

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U.S. Department of the Interior
Office of Natural Resources Revenue

OMB Control Number 1012-0002
OMB Approval Expires 08/31/2012

PAYOR IDENTIFICATION BLOCK
Payor Name and Code:
Lease Number:

Non-Arm’s-Length Transportation
System/Segment Operations, Maintenance,
and Overhead Expenditures
Form MMS-4110, Supplemental Schedule 1A

Agreement Number:
Facility ID No:
Segment ID No:
Period:
(mm/dd/ccyy)

to

Type of Expenditure - Describe
$

Total

THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
FORM MMS-4110 SUPPLEMENTAL SCHEDULE 1A (revised 3/2012)

$

PROPRIETARY

NONPROPRIETARY
Page 1 of 2

Non-Arm’s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form MMS-4110, Supplemental Schedule 1A
Instructions
Supplemental Schedule 1A is used to identify and document operating, maintenance, and
overhead expenditures listed under the "Other” expenditure categories on Schedule 1A.
Complete the payor identification block (see Schedule 1A instructions).
A separate Supplemental Schedule 1A must be prepared for other operating costs, other
maintenance costs, and other overhead costs associated with the transportation
facility/segment.
Describe and specify each expenditure item and amount. Receipts and invoices should be
retained in the office of the payor subject to audit.
Sum the amounts of each expenditure and list on the total line.
Enter the total amount of the operations, maintenance, or overhead expenditures on
Schedule 1A, lines 10, 16, or 20 accordingly.
Indicate by checking the appropriate box whether the information should be considered
proprietary or nonproprietary.

FORM MMS-4110, SUPPLEMENTAL SCHEDULE 1A (revised 3/2012)

Page 2 of 2