From: Subject: NTL_4a Date: Wed, 14 Jul 2010 14:36:36 -0400 MIME-Version: 1.0 Content-Type: multipart/related; type="text/html"; boundary="----=_NextPart_000_0000_01CB2361.F677D740" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2900.5931 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01CB2361.F677D740 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.blm.gov/wy/st/en/programs/energy/Oil_and_Gas/docs/ntl_4a.html NTL_4a
U.S. = DEPARTMENT OF THE=20 INTERIORBUREAU OF LAND = MANAGEMENT=20
Wyoming 		 
Print=20 Page

<<=20 Back to Onshore Operations

 =20
UNITED STATES
DEPARTMENT OF THE = INTERIOR
GEOLOGICAL=20 SURVEY
Conservation DIVISION=20

Notice to Lessees and Operators of = Onshore
Federal and=20 Indian Oil and Gas Leases
(NTL-4A)

Royalty or Compensation for Oil and Gas=20 Lost

This Notice is issued pursuant to the = authority=20 prescribed in the Oil and Gas Operating Regulations, Title = 30 CFR=20 221, and in accordance with the terms of the Federal and = Indian oil=20 and gas leases under the jurisdiction of the Geological = Survey. This=20 Notice supersedes certain provisions of NTL-4, issued = effective=20 December 1, 1974; Supplement No. 1 to NTL-4, issued = effective=20 December 1, 1978, to 10 lessees and operators on a = nationwide basis;=20 and Supplement No. 1 to NTL-4, issued effective December 1, = 1978, to=20 all lessees and operators in Wyoming. Lessees and operators = who=20 submitted payments for royalty on oil and gas lost under = these=20 provisions of NTL-4, which are hereby revoked, may file with = the=20 Area Oil and Gas Supervisor (Supervisor) an application for = a refund=20 of those payments in accordance with the addendum attached = to this=20 Notice.=20

I. GENERAL

Oil production subject to royalty shall include that = which (1) is=20 produced and sold on a lease basis or for the benefit of a = lease=20 under the terms of an approved communitization or = unitization=20 agreement and (2) the Supervisor determines to have been = avoidably=20 lost on a lease, communitized tract, or unitized area. No = royalty=20 obligation shall accrue as to that produced oil which (1) is = used on=20 the same lease, same communitized tract, or same unitized=20 participating area for beneficial purposes or (2) the = Supervisor=20 determines to have been unavoidably lost.

Gas Production (both gas well gas and oil well gas) = subject to=20 royalty shall include that which is produced and sold on a = lease=20 basis or for the benefit of a lease under the terms of an = approved=20 communitization or unitization agreement. No royalty = obligation=20 shall accrue on any produced gas which (1) is used on the = same=20 lease, same communitized tract, or same unitized = participating area=20 for beneficial purposes, (2) is vented or flared with the=20 Supervisor's prior authorization or approval during = drilling,=20 completing, or producing operations, (3) is vented or flared = pursuant to the rules, regulations, or orders of the = appropriate=20 State regulatory agency when said rules, regulations, or = orders have=20 been ratified or accepted by the Supervisor, or (4) the = Supervisor=20 determines to have been otherwise unavoidably lost.

Where produced gas (both gas well gas and oil well gas) = is (1)=20 vented or flared during drilling, completing, or producing=20 operations without the prior authorization, approval, = ratification,=20 or acceptance of the Supervisor or (2) otherwise avoidably = lost, as=20 determined by the Supervisor, the compensation due the = United States=20 or the Indian lessor will be computed on the basis of the = full value=20 of the gas so wasted, or the allocated portion thereof, = attributable=20 to the lease.

II. DEFINITIONS

As used in this Notice, certain terms are defined as=20 follows:  

    A. "Avoidably lost" production shall mean the venting or = flaring of produced gas without the prior authorization, = approval,=20 ratification, or acceptance of the Supervisor and the loss = of=20 produced oil or gas when the Supervisor determines that = such loss=20 occurred as a result of (1) negligence on the part of the = lessee=20 or operator, or (2) the failure of the lessee or operator = to take=20 all reasonable measures to prevent and/or to control the = loss, or=20 (3) the failure of the lessee or operator to comply fully = with the=20 applicable lease terms and regulations, appropriate = provisions of=20 the approved operating plan, or the prior written orders = of the=20 Supervisor, or (4) any combination of the foregoing.=20

    B. "Beneficial purposes" shall mean that oil or gas = which is=20 produced from a lease, communitized tract, or unitized=20 participating area and which is used on or for the benefit = of that=20 same lease, same communitized tract, or same unitized=20 participating area for operating or producing purposes = such as (1)=20 fuel in lifting oil or gas, (2) fuel in the heating of oil = or gas=20 for the purpose of placing it in a merchantable condition, = (3)=20 fuel in compressing gas for the purpose of placing it in a = marketable condition, or (4) fuel for firing steam = generators for=20 the enhanced recovery of oil. Gas used for beneficial = purpose=20 shall also include that which is produced from a lease,=20 communitized tract, or unitized participating area and = which is=20 consumed on or for the benefit of that same lease, same=20 communitized tract, or same unitized participating area = (1) as=20 fuel for drilling rig engines, (2) as the source of = actuating=20 automatic valves at production facilities, or (3) with the = prior=20 approval of the Supervisor, as the circulation medium = during=20 drilling operations. Where the produced gas is processed = through a=20 gasoline plant and royalty settlement is based on the = residue gas=20 and other products at the tailgate of the plant, the gas = consumed=20 as fuel in the plant operations will be considered as = being=20 utilized for beneficial purposes. In addition, gas which = is=20 produced from a lease, communitized tract, or unitized=20 participating area and which, in accordance with a plan = approved=20 by the Supervisor, is reinjected into wells or formations = subject=20 to that same lease, same communitized tract, or same = unitized=20 participating area for the purpose of increasing ultimate = recovery=20 shall be considered as being used for beneficial purposes; = provided, however, that royalty will be charged on the gas = used=20 for this purpose at the time it is finally produced and = sold.

    C. "Unavoidably lost" production shall mean (1) those = gas=20 vapors which are released from storage tanks or other = low-pressure=20 production vessels unless the Supervisor determines that = the=20 recovery of such vapors would be warranted, (2) that oil = or gas=20 which is lost because of line failures, equipment = malfunctions,=20 blowouts, fires, or otherwise except where the Supervisor=20 determines that said loss resulted from the negli=F0 gence = or the=20 failure of the lessee or operator to take all reasonable = measures=20 to prevent and/or control the loss, and (3) the venting or = flaring=20 of gas in accordance with Section III=20 hereof.  

III. AUTHORIZED VENTING AND = FLARING OF=20 GAS=20

Lessees or operators are hereby authorized to vent or = flare gas=20 on a short-term basis without incurring a royalty obligation = in the=20 following circumstances:  

    A. Emergencies. During temporary emergency situations, = such as=20 compressor or other equipment failures, relief of abnormal = system=20 pressures, or other conditions which result in the = unavoidable=20 short-term venting or flaring of gas. However, this = authorization=20 to vent or flare gas in such circumstances without = incurring a=20 royalty obligation is limited to 24 hours per incident and = to 144=20 hours cumulative for the lease during any calendar month, = except=20 with the prior authorization, approval, ratification, or=20 acceptance of the Supervisor.=20

    B. Well Purging and Evaluation Tests. During the = unloading or=20 cleaning up of a well during drillstem, producing, routine = purging, or evaluation tests, not exceeding a period of 24 = hours.=20

    C. Initial Production Tests. During initial well = evaluation=20 tests, not exceeding a period of 30 days or the production = of 50=20 MMcf of gas, whichever occurs first, unless a longer test = period=20 has been authorized by the appropriate State regulatory = agency and=20 ratified or accepted by the Supervisor.

    D. Routine or Special Well Tests. During routine or = special=20 well tests, other than those cited in III.B and C above, = only=20 after approval by the Supervisor.  

IV. = OTHER=20 VENTING OR FLARING  =20
    A. Gas Well Gas. Except as provided in II.C and III = above, gas=20 well gas may not be flared or vented. For the purposes of = this=20 Notice, a gas well will be construed as a well from which = the=20 energy equivalent of the gas produced, including its = entrained=20 liquid hydrocarbons, exceeds the energy equivalent of the = oil=20 produced.=20

    B. Oil Well Gas. Except as provided in II.C and III = above, oil=20 well gas may not be vented or flared unless approved in = writing by=20 the Supervisor. The Supervisor may approve an application = for the=20 venting or flaring of oil well gas if justified either by = the=20 submittal of (1) an evaluation report supported by = engineering,=20 geologic, and economic data which demonstrates to the = satisfaction=20 of the Supervisor that the expenditures necessary to = market or=20 beneficially use such gas are not economically justified = and that=20 conservation of the gas, if required, would lead to the = premature=20 abandonment of recoverable oil reserves and ultimately to = a=20 greater loss of equivalent energy than would be recovered = if the=20 venting or flaring were permitted to continue or (2) an = action=20 plan that will eliminate venting or flaring of the gas = within 1=20 year from the date of application.

    The venting or flaring of gas from oil wells completed = prior to=20 the effective date of this Notice is authorized for an = interim=20 period. However, an application for approval to continue = such=20 practices must be submitted within 90 days from the = effective date=20 hereof, unless such venting or flaring of gas was = authorized,=20 approved, ratified, or accepted previously by the = Supervisor. For=20 oil wells completed on or after the effective date of this = Notice,=20 an application must be filed with the Supervisor, and = approval=20 receive, for any venting or flaring of gas beyond the = initial=20 30-day or other authorized test period.

    C. Content of Applications. Applications under section = B above=20 shall include all appropriate engineering, geologic, and = economic=20 data in support of the applicant's determination that = conservation=20 of the gas is not viable from an economic standpoint and, = if=20 approval is not granted to continue the venting or flaring = of the=20 gas, that it will result in the premature abandonment of = oil=20 production and/or the curtailment of lease development. = The=20 information provided shall include the applicant's = estimates of=20 the volumes of oil and gas that would be produced to the = economic=20 limit if the application to vent or flare were approved = and the=20 volumes of the oil and gas that would be produced if the = applicant=20 was required to market or beneficially use the gas. When=20 evaluating the feasibility of requiring conservation of = the gas,=20 the total leasehold production, including both oil and = gas, as=20 well as the economics of a fieldwide plan shall be = considered by=20 the Supervisor in determining whether the lease can be = operated=20 successfully if it is required that the gas be=20 conserved.  

V. REPORTING AND = MEASUREMENT=20 RESPONSIBILITIES=20

The volume of oil or gas produced, whether sold, = avoidably or=20 unavoidably lost, vented or flared, or used for beneficial = purposes=20 (including gas that is reinjected) must be reported on Form = 9-329,=20 Monthly Report of Operation, in accordance with the = requirement of=20 this Notice and the applicable provisions of NTL-1 and = NTL-1A. The=20 volume and value of all oil and gas which is sold, vented or = flared=20 without the authorization, approval, ratification, or = acceptance of=20 the Supervisor, or which is otherwise determined by the = Supervisor=20 to be avoidably lost must be reported on Form 9-361, Monthly = Report=20 of Sales and Royalties. Payments submitted in this respect = must be=20 accompanied by a Form 9-614-A, Rental and Royalty Remittance = Advice.=20

In determining the volumes of oil and gas to be reported = in=20 accordance with the first and second paragraphs of this = Section V,=20 lessees and operators shall adhere to the = following:  

    1. When the amount of oil or gas involved has been = measured in=20 accordance with Title 30 CFR 221.43 or 221.44, that = measurement=20 shall be the basis for the volume reported.=20

    2. When the amount of oil and gas avoidably or = unavoidably=20 lost, vented or flared, or used for beneficial purposes = occurs=20 without measurement, the volume of oil or gas shall be = determined=20 utilizing the following criteria, as applicable:

      a. Last measured throughput of the production = facility.

      b. Duration of the period of time in which no = measurement was=20 made.

      c. Daily lease production rates.

      d. Historic production data.

      e. Well production rates and gas=F0oil ratio tests. =

      f. Productive capability of other wells in the area = completed=20 in the same formation.

      g. Subsequent measurement or testing, as required by = the=20 Supervisor.

      h. Such other methods as may be approved by the=20 Supervisor.  

The Supervisor may = require the=20 installation of additional measurement equipment whenever it = is=20 determined that the present methods are inadequate to meet = the=20 purposes of this Notice.=20

VI. VALUE DETERMINATIONS FOR ROYALTY OR COMPENSATION = PURPOSES=20

In computing the royalty or compensation due on oil or = gas under=20 the provisions of this Notice, the value shall be computed = in the=20 same manner as the Supervisor would have calculated the = value of the=20 oil or gas had it been sold from the same lease, same = communitized=20 tract, or same unitized participating area.

VII. COMPLIANCE

The failure to comply with the requirements of this = Notice will=20 result in compliance being secured by such actions as are = provided=20 by law and regulation. 

January 1, 1980 /s/ C.J. Curtis
_________________________________ _______________________________
Date C.J. Curtis

 Oil and Gas Supervisor

Northern Rocky Mountain = Area

Approved:

 

 

/s/ Hillary A.=20 Oden
____________________________________
Hillary A.=20 Oden
Acting Chief, Conservation Division

 

 =20
ADDENDUM TO NTL-4A=20

Refund Applications

Certain provisions of NTL-4 have been revoked retroactive = to=20 December 1, 1974, the effective date of said Notice. = Accordingly,=20 lessees and operators who submitted royalty payments under = the=20 provisions of NTL=F04 may apply for a refund of those = payments made=20 for (1) oil that was unavoidably lost or used for beneficial = purposes on the lease, communitized tract, or unitized = participating=20 area from which it was produced and/or (2) gas that was = vented or=20 flared with the prior approval of the Supervisor or = unavoidably=20 lost. No refunds will be processed in the absence of such an = application, and no refunds will be made of those payments = submitted=20 on the basis of a determination of waste by the Supervisor. = In=20 addition, liquidated damages assessed for the late filing of = reports=20 or the failure to report pursuant to the provisions of NTL-4 = will=20 not be refunded.

The application shall be in the form of a letter signed = by an=20 authorized officer or agent of the lessee or operator and = for each=20 individual lease shall include:  

    1. The lease prefix code and lease number.=20

    2. The month and year.

    3. The product code (01, 02, 03, 04, 41, or 43) used in = the=20 report and payments previously submitted to the = Supervisor.

    4. The volume of lost oil and/or gas previously = reported and=20 the amount of the refund requested.

    5. The total amount of the refund requested for each = lease as a=20 subtotal.

    6. The total amount of the refund requested for all = leases as a=20 grand total.  

Additional instructions = in regard=20 to the filing and contents of said applications may be = obtained by=20 contacting the Supervisor having juris=F0 diction over the = lease or=20 leases involved.=20

Refund applications will be processed as promptly as = possible.=20 The Supervisor, as to Federal leases, may process a direct = refund or=20 authorize the applicant to withhold the refund amount from = future=20 royalty accruals. However, refunds authorized by the = Supervisor with=20 respect to Indian leases will be recoverable only as a = credit=20 against future rental or royalty accruals in accordance with = the=20 provisions of Section IX (Over=F0 payments) of NTL-1A.=20


 
Last updated: = 05-11-2007
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= PADDING-BOTTOM: 10px; PADDING-TOP: 10px; FONT-FAMILY: Verdana } #whitespace { FONT-SIZE: 12px; FONT-FAMILY: Verdana } #whitespace TABLE { FONT-SIZE: 12px; FONT-FAMILY: Verdana } *#whitespace FONT { FONT-SIZE: 12px; FONT-FAMILY: Verdana } *#whitespace INPUT { FONT-SIZE: 12px; FONT-FAMILY: Verdana } #boilerplate { FONT-SIZE: 10px; FONT-FAMILY: Verdana } #imageCol { FLOAT: left; WIDTH: 200px } #imageCol IMG { BORDER-RIGHT: #a6ac90 1px solid; BORDER-TOP: #a6ac90 1px solid; = BORDER-LEFT: #a6ac90 1px solid; BORDER-BOTTOM: #a6ac90 1px solid } #copy { FLOAT: left; MARGIN: 0px 10px 0px 15px; WIDTH: 300px } #addNav { FONT-SIZE: 10px } #addNav DIV.addNavItem { BORDER-RIGHT: #1e2901 1px solid; BORDER-TOP: #1e2901 1px solid; = BACKGROUND: #cccc99; MARGIN-BOTTOM: 10px; BORDER-LEFT: #1e2901 1px = solid; BORDER-BOTTOM: #1e2901 1px solid } #addNav DIV.sourceLink { PADDING-BOTTOM: 1px; WIDTH: 100%; COLOR: #000; BORDER-BOTTOM: #1e2901 = 1px solid } #addNav DIV.sourceLink A { MARGIN-LEFT: 5px } #addNav UL { PADDING-RIGHT: 0px; PADDING-LEFT: 10px; PADDING-BOTTOM: 0px; MARGIN: = 0px; PADDING-TOP: 1px; LIST-STYLE-TYPE: none } #addNav LI { PADDING-RIGHT: 0px; PADDING-LEFT: 0px; MARGIN-BOTTOM: 4px; = PADDING-BOTTOM: 0px; WIDTH: auto; PADDING-TOP: 0px; POSITION: relative } #addNav A { COLOR: #000 } #addNav LI A { COLOR: #000; TEXT-DECORATION: none } #addNav A:hover { COLOR: #415264; TEXT-DECORATION: underline } #privacy { CLEAR: both; PADDING-TOP: 40px } #field_office_text { FONT-WEIGHT: bold; FONT-SIZE: 14px; COLOR: #5f7f67; TEXT-ALIGN: right } #alternate_view_text { FONT-WEIGHT: normal; FONT-SIZE: 9px; COLOR: black; TEXT-ALIGN: right } .lastupdated { FONT-WEIGHT: normal; FONT-SIZE: 9px; COLOR: black; TEXT-ALIGN: right } P.privacy { FONT-SIZE: 9px } H2 { FONT-SIZE: 20px; COLOR: #5f7f67 } .caption { FONT-SIZE: 9px } #footer_top { FONT-SIZE: 10px; COLOR: #000000; BACKGROUND-COLOR: #cccc99; TEXT-ALIGN: = center } #footer_top A { COLOR: black; TEXT-DECORATION: none } #footer_top A:hover { TEXT-DECORATION: none } #footer_bottom { FONT-SIZE: 10px; BACKGROUND: #000000; COLOR: #ffffff; TEXT-ALIGN: = center } #footer_bottom A { COLOR: white; TEXT-DECORATION: none } #footer_bottom A:hover { COLOR: #415264; TEXT-DECORATION: underline } .topa_lite { FONT-SIZE: 10px; COLOR: #fff } .topb_lite { FONT-WEIGHT: 900; FONT-SIZE: 14px; MARGIN: 0px 17px 0px 10px; COLOR: = #fff } .topc_lite { FONT-WEIGHT: 900; FONT-SIZE: 10px; MARGIN: 0px 20px 0px 10px; COLOR: = #fff } #lite_top { PADDING-RIGHT: 5px; PADDING-LEFT: 5px; BACKGROUND: #779475; = PADDING-BOTTOM: 5px; PADDING-TOP: 5px; TEXT-ALIGN: right } #print_top { PADDING-RIGHT: 5px; PADDING-LEFT: 5px; BACKGROUND: #779475; = PADDING-BOTTOM: 5px; PADDING-TOP: 5px; TEXT-ALIGN: right } #print_bottom { BACKGROUND: black; WIDTH: 2px } ------=_NextPart_000_0000_01CB2361.F677D740--