Form MMS-4295 Gas Transportation Allowance Report

U.S. Department of the Interior
Office of Natural Resources Revenue
1

Gas Transportation Allowance Report
Form MMS-4295

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

FOR ONRR USE ONLY:

2 PAYOR CODE

PAYOR NAME
ADDRESS
CITY

ZIP

STATE

4 AMENDED REPORT
5 REPORTING
PERIOD
(mm/dd/ccyy)

6

7

8
LEASE
NUMBER

10

9
AGREEMENT
NUMBER

PRODUCT
CODE

NON-ARM’SLENGTH INDICATOR

to
11
a

3

FOR PAYOR USE ONLY:

ACTUAL DATA
b
ROYALTY
QUANTITY

ALLOWANCE
RATE PER UNIT

c

ROYALTY
ALLOWANCE
AMOUNT

1
2
3
4
5
6
7
8
9
10
11
12 PAGE TOTAL
13 REPORT TOTAL (LAST PAGE ONLY)
IF MORE LINES ARE NEEDED, ATTACH ADDITIONAL PAGES OF FORM MMS-4295

xxxxxxxxxxxx
xxxxxxxxxxxx

I have read and examined the statements in this report and, to t he 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 Oi l 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 15 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-4295 (revised 3/2012)

Page 1 of 3

Gas Transportation Allowance Report
Form MMS-4295
General Instructions
The purpose of Form MMS-4295 is to provide for the determination and reporting of costs associated with
non-arm’s-length contracts or no contract situations for transporting gas and gas plant products under
30 CFR 1206.178. 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's -length based
allowance--actual, allowable operating cost plus depreciation, plus a return on the undepreciated portion of
the depreciable capital. Allowable cost divided by lease production yields the transportation allowance rate.
In accordance with 30 CFR 1206.177, a payor may deduct from royalty payments the reasonable actual
costs incurred by the lessee to transport unprocessed gas, residue gas, and gas plant products from a lease
to a point off the lease including, if appropriate, transportation from the lease to a gas processing plant off the
lease and from the plant to a point away from the plant. Costs for transporting products, excluding waste
products that 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, payors are not required to submit Form
MMS–4295. Instead, payors are required to submit a copy of its arm’s -length transportation contract to ONRR
within 2 months of the date ONRR receives your first report that deducts the allowance on t he Form MMS 2014. For transportation costs incurred under other than arm's -length conditions, 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-4295 within 3 months after the end of the 12-month period to which the allowance applies.
For purposes of this report, a sale means the disposition of gas or gas products under a non -arm's-length
contract, or no contract situation. A transportation facility means a physical system associated with the
transportation of gas or gas products 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
such as from one tie -in to another tie-in location on the pipeline, or may constitute the entire facility.
Examples of a transportation segment would be an origin -to-destination pipeline owned by the lessee, and
truck haulage over specific routes where the equipment is owned by the lessee. An example of a multi segment transportation system would be a pipeline bringing sour gas to a processing facility and rail or truck
haulage to transport sulfur from the processing plant to a remote point of sale.
Form MMS-4295, Page 1, is used to report the royalty allowance amount claimed during the reporting period
by Lease Number and Agreement Number (if applicable), combination and product code.
Form MMS-4295, 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 and
Agreement Number (if applicable), comb ination.
Form MMS-4295, Schedule 1A, summarizes operating, maintenance, and overhead costs for a non -arm'slength or no contract transportation segment.
Form MMS-4295, Supplemental Schedule 1A, is used to detail operating, maintenance, and overhead cost s
that could not be shown on Schedule 1A because of its limited space.
Form MMS-4295, Schedule 1B, summarizes depreciation and undepreciated capital investment costs for a
non-arm's-length or no contract transportation segment.
Form MMS-4295, Schedule 1C, is used to determine an allowance for non -arm's-length or no contract
transportation of natural gas liquids (NGLs) or sulfur from a lease to a gas processing facility.

FORM MMS-4295 (revised 3/2012)

Page 2 of 3

Gas Transportation Allowance Report
Form MMS-4295
Line-by-Line Instructions
1.

Enter the payor name and address used to report royal ties 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.

Check the Amended Report box if this report is amending previously submitted data. A corrected report
requires a two-line entry. The first line reverses the original entry using a minus sign ( -) in columns 11a,
11b, and 11c, 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. The reporting period will begin the first day of the calendar year or when the
transportation contract begins, is modified or amended and will end the last day of the calendar year or
when the transportation contract or rate terminates, is modified or amended 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 as used on Form MMS-2014.

9.

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

10. Enter a non-arm’s-length indicator as "NARM" for the portion of the transportation costs incurred under
non-arm's-length or no contract situations.
11. Column 11 is used to report actual cost data for the repor ting 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 16, or 50 percent of the unit value of the gas or gas product unless
ONRR 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.)
12. Enter page totals on line 12.
13. If the number of allowances being reported exceeds the number of lines on the Form MMS-4295, use
additional Page 1, Form MMS-4295s. If more than one Page 1, Form MMS-4295 is submitted, add the
amounts on line 12 from each page and enter the total only once on line 13 of the last page of the Gas
Transportation Allowance Report.
Indicate by checking the appropriate box whether the information should be considered proprietary or
nonproprietary.

FORM MMS-4295 (revised 3/2012)

Page 3 of 3

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

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

2

Gas Transportation Facility Summary Sheet
Form MMS-4295, Schedule 1

LEASE NUMBER:
AGREEMENT NUMBER:

1 PAYOR NAME AND CODE

FACILITY NAME/ID NUMBER:

ADDRESS

PRODUCT CODE:

CITY

STATE

ZIP

PERIOD: (mm/dd/ccyy )

(a)

(b)

(c)

(d)

Segment
Name or
Number

Mode
of
Transportation

Non-Arm’s-Length
Indicator

Non-Arm’s-Length
Operating Costs

to

(e)

(f)

Depreciation

Rate
of
Return

(g)
Undepreciated
Capital
Investment at
Beginning of Year

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

From
To
A. TRANSPORTING GAS TO A REMOTE GAS PROCESSING FACILITY.
$

$

$

$

3
4
5
6
7

Totals

$

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

$
Part A Total Cost

_..

=
Part A Total Quantity

$

8

$

9

Gas Rate/Mcf
10

Allowance rate for transporting NGL's or Sulfur from the lease to plant.
B. TRANSPORTING GAS OR GAS PRODUCTS FROM LEASE OR PLANT TO A REMOTE SALES POINT.
$
$

Sulfur Rate/LT
$

NGL Rate/Gal
$

11
12
13

Totals

$

$

Allowance rate = (lines 14d + 14e + 14h)/Quantity of products.

_.

.

=

Part B Total Quantity
Part B Total Cost
Total Unit Allowance Rate = the sum of line 9h and 15h if the allowance is for gas;
line 10g and 15h if the allowance is for sulfur; or 10h and 15h if the allowance is for NGL's . 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-4295, SCHEDULE 1 (revised 3/2012)

PROPRIETARY

$

14

$
Product Rate

15
16

Allowance Rate

NONPROPRIETARY
Page 1 of 3

Gas Transportation Facility Summary Sheet
Form MMS-4295, Schedule 1
Instructions
A separate Form MMS-4295, Schedule 1, must be used to determine the royalty allowance rate 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 accumu late segment costs and to determine an allowance for transporting gas or gas
products from the lease to a processing facility off the Iease. The payor, using Part A, will compute a gas
transportation rate (line 9h) which will be applicable to entrained pr oducts including NGLs, sulfur, CO 2,
helium, and nitrogen. The payor must first complete lines 1 through 9 of Part A. If entrained liquids or sulfur
are present in the gas stream, the payor must complete Schedule 1C (Allowance for Non -Arm's-Length
Transportation of Gas Liquids and Sulfur) using the computed gas transportation rate from line 9h, Schedule
1. A transportation rate will be computed for NGLs and sulfur (in the gaseous form), The payor may then
complete Part A, Schedule 1, by completing lines 10( g) and 10(h), Schedule 1, for the sulfur and NGL rates,
respectively. The gas, sulfur, and NGL rates (lines 9h, 10g, and 10h) will be used in completing Part B,
Schedule 1, for each product.
Part B is used to accumulate segment costs and compute an allow ance for transporting gas or gas
products from either a lease, or from a processing facility, to the nearest available marketplace or sales
outIet off the Iease. When gas is transported to a processing facility, processed, and gas or gas products
are 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. Processing 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 shown on Form MMS-4295, Gas
Transportation Allowance Report.

2.

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 Product Code (see Reporter Handbook) of the product for which an
allowance is being claimed. (Note: For a transportation facility consisting of only one segment,
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-4295, Gas Transportation Allowance Report.
The following instructions are applicable to Part A (lines 3 -7) and Part B (lines 11 -13):
a.

Describe each segment o f the transportation facility; e.g., from lease XX-YYYYY-Z to St. John
processing 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 using "NARM" to denote non -arm’s-length costs
which include non-arm's-length and no contract situations.

FORM MMS-4295, SCHEDULE 1 (revised 3/2012)

Page 2 of 3

Gas Transportation Facility Summary Sheet
Form MMS-4295, Schedule 1
Instructions
d.

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.

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 i nvestment by multiplying column f by column g.
Total columns d, e, and h and enter on lines 8d, 8e, and 8h, or lines 14d, 14e, and 14h, accordingly.
For Part A, sum lines 8d, 8e, and 8h and enter on line 9 - Total Costs. Enter total quantity of producti on
transported from the lease, as measured at the approved point of royalty measurement, to the processing
facility on line 9 Total Quantity. (Note: The total throughput quantity excluding waste products that have no
value must be used.) Compute the allow ance rate, to six decimal places, by dividing line 9 - Total Cost, by
Iine 9 - Total Volume, and enter on line 9h.
When determining an allowance for sulfur or NGLs, Schedule 1 C must be completed.
a.

If the allowance is for transporting sulfur, enter th e sulfur allowance rate from Schedule 1C, line 13 (f),
on Schedule 1, line 10g.

b.

If the allowance is for transporting NGL'S, enter the NGL allowance rate from Schedule 1C, line 12, on
Schedule 1, line 10h.

For Part B, sum lines 14d, 14e, and 14h and enter on line 15 - total cost. Enter the total product sales
quantity transported from the lease, or processing facility to the sales point on line 15 - Total Quantity.
(Note: The total quantity to be used is the sum of the sales quantities reported on Form MMS-2014 for the
reporting period.) Compute the allowance rate, to six decimal places, by dividing line 15 - Total Cost, by line
15 - Total Quantity, and enter on line 15h.
16.

The total unit allowance rate is equal to the sum of line 9h plus line 15h if the product is gas; line 10g
plus line 1 5h if the product is sulfur, or line 10h plus line 15h if the product is NGLs. Enter on line
16.

Indicate by checking the appropriate box whether the information should be considered proprietary or
nonproprietary.

FORM MMS-4295, SCHEDULE 1 (revised 3/2012)

Page 3 of 3

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-4295, Schedule 1A

A.

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

to

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

$

23

F.

:

Total throughput

Segment Allocated Operating, Maintenance, and
Overhead Costs
(Line 21 x line 22) Enter in column d, Schedule 1
THIS INFORMATION SHOULD BE CONSIDERED (Please check one)

FORM MMS-4295, 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-4295, 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 fo r 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-4295, Gas 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 -4295, Gas
Transportation Allowance Report.
Instructions for Computing Operating, Maintenance, and Overhead Costs .
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 additiona l 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).
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.
FORM MMS-4295, SCHEDULE 1A (revised 3/2012)

Page 2 of 4

Non-Arm‘s-Length Transportation
System/Segment Operations, Maintenance, and Overhead Expenditures
Form MMS-4295, Schedule 1A
Instructions
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 CapitaI Costs - Costs incidental to marketing (e.g., on -lease compression, gathering,
separation, dehydration, storage, and treatment). Also, schools, hospital, 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 wh ile 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, 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-4295, SCHEDULE 1A (revised 3/2012)

Page 3 of 4

Non-Arm‘s-Length Transportation
System/Segment Operations, Maintenance, and Overhead Expenditures
Form MMS-4295, 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 inc ome 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.

5.

Costs for services that the lessee is obligated to perform at no cost to the gove rnment.

FORM MMS-4295, SCHEDULE 1A (revised 3/2012)

Page 4 of 4

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-4295, 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 -4295, 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-4295, 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 separat e 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 shou ld 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 9,
15, or 19 accordingly.
Indicate by checking the appropriate box whether the information should be considered proprietary or
nonproprietary.

FORM MMS-4295, SUPPLEMENTAL SCHEDULE 1A (revised 3/2012)

Page 2 of 2

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-4295, Schedule 1B
1

2
Initial Capital
Investment
and Date
Placed in Service

Expenditure
Item
$

3
Salvage
Value

4
Depreciable
Life/Years
of Depreciation
Taken to Date

$

Facility ID No:
Segment ID No:
Period:
(mm/dd/ccyy)
5
Undepreciated
Capital
Investment at
Beginning of Year
$

to
6

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-4295, 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-4295, 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 dep reciable 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
equipment or the life of the reserves which the transp ortation 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
from the beginning -of-year undepreciated capital investment. 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, col umns 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-4295, SCHEDULE 1B (revised 3/2012)

Page 2 of 2

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
Gas Liquids and Sulfur from the Lease to the
Gas Processing Plant
Form MMS-4295, Schedule 1C

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

to

Liquids
(a)

(b)

(c)

(d)

(e)

(f)

Product

Gallons
of
Liquids
Sold

Volume 1
_/
Factors
Mcf/Gallon
(14.73 psia)

Volume
of Liquids
in Mcf
(b)x(c)

Allowance
per Mcf
(Line 9h
Schedule 1)

Product
Allowance
(d)x(e)
$

1

Ethane
Propane

0.039608
0.036416

2

Isobutane

0.030829

3

N-butane

0.031527

4

Pentanes

0.027437

5

Hexane

0.024244

6

Heptane

0.021550

7

Pentanes and
Heavier

0.024044

8

Other

9

Other

10

Totals

..

Allowance Rate/Gallon
(line 11f line 11b)

$

11

$

12

Sulfur
(a)

Tons of
Sulfur Sold

(b)

(c)

(d)

(e)

Plant 2_/
Recovery
Factor

Tons of
Sulfur
in Gas
Stream
(a) (b)

Volume (Mcf) 3_/
of H 2 S in Gas

Allowance
per Mcf
(line 9h
Schedule 1)

..

Stream
(c) x 26.207682

(f)
Sulfur
Allowance
(d x e) a

..

$
_/
1 Petroleum Refinery Engineering,

13

Fourth Edition, McGraw Hill (1958).

_/ To be based on actual plant sulfur recovery experience.
2
3_/ Based upon PV = ZNRT Mcf at 60 oF, 14.73 psia, 94.08467 Wt% S in H2S.

THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
FORM MMS-4295, SCHEDULE 1C (revised 3/2012)

PROPRIETARY

NONPROPRIETARY

Page 1 of 2

Non-Arm’s-Length Transportation
Gas Liquids and Sulfur from the Lease to the Gas Processing Plant
Form MMS-4295, Schedule 1C
Instructions
Schedule 1C is used to determine an allowance for transporting natural gas liquids (NGLs) or sulfur from a
lease to a processing facility.
Complete the payor identification block (see Schedule 1A instructions).
Compute the transportation allowance rate for NGLs as follows:
a.

Identify the liquid products produced.

b.

Enter the gallons of liquids sold.

c.

Enter the volume factor (Mcf/Gallon) if the volume factor used by the payor is other than listed. Use
column c1 for 14.75 psia.

d.

Compute the volume of liquids in Mcf by multiplying columns b and c.

e.

Enter the allowance per Mcf from line 9h, Schedule 1.

f.

Compute the product allowance value by multiplying column d by column e.

Sum columns b and f and enter on line 11b and 11f, accordingly. Compute th e allowance rate, using six
decimal places, for NGLs by dividing the total allowance (line 11f) by the total volume of liquids sold (line
11b). Enter on line 12 of Schedule 1C and line 10h of Schedule 1.
Compute the transportation allowance rate for sulfu r as follows:
a.

Enter the total volume of sulfur (in long tons) marketed during the reporting period.

b.

Enter the sulfur recovery factor for the plant. This shall be based on actual plant sulfur recovery
experience.

c.

Compute the tons of sulfur in the gas stream by dividing column a by column b.

d.

Enter the volume (Mcf) of H2S in the gas stream. This volume is determined by multiplying column c by
the conversion factor 26.207682.

e.

Enter the transportation rate for transporting gas from the l ease to the plant from line 9h, Schedule 1.

f.

Determine the sulfur allowance rate per ton, using six decimal places, by dividing the product of columns
d and e by column a.

Enter the sulfur allowance per ton on line 10g of Schedule 1.
Indicate by chec king the appropriate box whether the information should be considered proprietary or
nonproprietary.

FORM MMS-4295, SCHEDULE 1C (revised 3/2012)

Page 2 of 2