Form ONRR-4295 Gas Transportation Allowance Report

Gas Transportation Allowance Report
Form ONRR-4295

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

1 Payor Name
Address
City

________________________________

2 Payor Code

___________________________________

________________ State

6 7
Lease Number

3 Amended Report

_______ Zip ____

8
Agreement Number

9

5 Reporting Period
(mm/dd/ccyy)
10

Product
Code

For ONRR Use Only:

OMB Control Number 1012-0002
OMB Approval Expires 09/30/2015

Non-Arm's-Length
Indicator

4

FOR PAYOR USE ONLY

___________________
to
____________________
Actual Data

11
a

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 ONRR-4295

xxxxxxxxxx
xxxxxxxxxx

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 ensure that Indian mineral lessors receive the maximum revenues from mineral resources
on their land consistent with the Secretary’s trust responsibility. ONRR uses the information to aid in its compliance efforts. Responses are required to obtain a benefit (30 CFR 1206.172). 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. Annual public reporting burden of this form is estimated to average 10 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 Officer of Natural Resources
Revenue, Attention: Rules & Regs Team, P.O. Box 25165, MS 61030A, Denver, CO 80225-0165.

Form ONRR-4295 (revised 9/2015)

Page 1 of 3

Gas Transportation Allowance Report
Form ONRR-4295
General Instructions
This form to will be used to determine and report the costs of transporting non-arm’s length or no contract gas and
gas plant products under 30 CFR 1206.178 (b). Allowable transportation costs are: Operating and maintenance
expenses, overhead, and either depreciation and a return on undepreciated capital investment or a cost equal to the
initial capital investment in the transportation system multiplied by Standard and Poor’s BBB rating. Allowable
costs divided by lease production is 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, or gas plant products to a point off the lease. You
may not deduct any allowance for gathering costs.
Requirements: For transportation costs incurred under arm’s-length conditions, you are required to submit to
ONRR a copy of your arm’s length transportation contract(s) and all subsequent amendments to the contract(s)
within 2 months of the date ONRR receives your report which claims the allowance on the Form ONRR-2014. For
transportation costs incurred under other than arm’s-length conditions you must submit this Form ONRR-4295
within 3 months after the end of the 12-month period to which the allowance applies, unless ONRR approves a
longer period.
Definitions: For Purposes of this report:
Sale: means the disposition of gas or gas plant products under arm’s-length contract, non-arm’s-length contract, or
no contract situation.
Transportation facility: means a physical system associated with the transportation of gas or gas plant products
from the lease to a point of disposition remote from the lease.
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 gas and/or gas plant products to a point on a third-party pipeline through which
the gas and/or gas plant products are transported under an arm’s-length contract to the sales point.
Forms:
FormONRR-4295, is used to report the actual allowance amounts claimed during the reporting period.
From ONRR-4295 Schedule 1, is used to accumulate segment costs and to compute the allowance rate for a
transportation facility. A separate Schedule 1 must be completed for each Lease Number/Agreement Number (if
applicable), combination.
Form ONRR-4295 Schedule 1A, summarizes operating, maintenance, and overhead costs for a transportation
segment.
Form ONRR-4295 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 ONRR-4295 Schedule 1B, summarizes depreciation and undepreciated capital investment costs for a nonarm’s-length or no contract transportation segment.
Form ONRR-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 ONRR-4295 (revised 9/2015)

Page 2 of 3

Gas Transportation Allowance Report
Form ONRR-4295
Line-by-Line Instructions
1. Enter the payor name and address used to report royalties and transportation deductions on Form ONRR-2014.
2. Enter the same payor codes as used on Form ONRR-2014.
3. Enter the report type indicator as follows:
• “1” if this is an initial report for the lease and/or agreement number (only column 12 will be completed.)
• “2” if this is a follow up 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.
4. Reserved for payor comment.
5. Enter as the reporting period the period covered by the actual cost data for the transportation allowance being
reported in column 11.
6. Line count; i.e., the number of leases being reported.
7. Enter the same Lease Number as used on Form ONRR-2014.
8. Enter the same Agreement Number (if applicable) as reported on Form ONRR-2014.
9. Enter the same product code as used on Form ONRR-2014.
10. Enter a non-arm’s-length indicator as “NARM”.
11. Column 11 is used to report actual transportation allowance for the reporting period. Enter in column:
• 11a the actual royalty quantity transported during the reporting period.
• 11b the lesser of the transportation allowance rate from Schedule 1, line 15, or 50 percent of the unit value of
the gas or gas plant products.
• 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 more than one Form ONRR-4295 is submitted, add the amount on line 12 for each page and enter the total only
once on line 13 of the last page of the Oil Transportation Allowance Report.
Indicate by checking the appropriate box whether the information should be considered proprietary or nonproprietary.

FORM ONRR-4295 (revised 9/2015)

Page 3 of 3

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

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

OMB Control Number 1012-0002
OMB Approval Expires 09/30/2015

2 LEASE NUMBER: ________________________________
1 PAYOR NAME AND CODE _____________________/___________________

AGREEMENT NUMBER:___________________________

ADDRESS_______________________________________________________

FACILITY NAME/ID NUMBER:_______________________

CITY_______________________STATE__________ZIP___________________

PRODUCT CODE:_________________________________
Period: (mm/dd/ccyy)_______________to______________

(a)
Segment Name or Number

(b)
Mode of
Transportation

(c)
Non-Arm's-Length
Indicator

(d)
Non-Arm's-Length
Operating Costs

From
To
A. TRANSPORTATION SEGMENT TO A REMOTE GAS PROCESSING FACILITY
$

Allowance rate = (lines 8d + 8e + 8h)/Volume of Production
transported from the lease.

Totals

$

(e)
Depreciation

$

(f)

(g)

(h)

Rate of
Return

Undepreciated
Capital
Investment at
Beginning of
Year

Return on
Investment
(f) x (g)

$

$
÷
Part A Total Cost

Part A Total Quantity

$

$

3
4
5
6
7
8

=$

9

Gas Rate/MCF

Allowance rate for transporting NGLs or Sulfur from the lease to the
processing facility

Sulfur Rate/LT

NGLs Rate/Gal

B. TRANSPORTATION SEGMENT FROM LEASE OR PROCESSING FACILITY TO A REMOTE SALES POINT
$
$

$

$

Allowance rate = (lines 13d + 13e + 13h)/Volume of Production
transported after the lease.

Totals

10

$

$
Part B Total Cost

÷

Part A Total Volume

Total Unit Allowance Rate = the sum of line 9h and 15h for gas; line 10g and 15h for sulfur; or 10 h and 15h
for NGLs. The allowance cannot exceed 50 percent of the value of the product without prior ONRR approval
THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
FORM ONRR-4295 SCHEDULE 1 (revised 9/2015)

PROPRIETARY

$
=$
Product Rate

11
12
13
14
15
16

Allowance Rate
NONPROPRIETARY
Page 1 of 3

Oil Transportation Facility Summary Sheet
Form ONRR-4295, Schedule 1
Instructions
A separate Form ONRR-4295, Schedule 1 must be used to determine the transportation allowance amount for each
Lease Number and Agreement Number (if applicable), combination. No allowance may be claimed if the facility
is entirely on the lease.
Part A is used to accumulate segment costs and to compute an allowance for transporting gas or gas plant
products from the lease to a processing facility off the lease. The payor, using Part A, will compute a gas
transportation rate (line 9h). If entrained liquids or sulfur are present in the gas stream, the payor must complete
Schedule 1C to compute a transportation rate 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 Rate (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 allowance for transporting gas or gas products from a
processing facility to the remote sales point. 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. 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 ONRR-4295.
2. Enter the same Lease Number and Agreement Number (if applicable), combination as used on Form ONRR2014. 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, 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 ONRR-4295, Oil
Transportation Allowance Report.
The following instructions are applicable to Part A (lines 3-7) and Part B (lines 11-13):
a. Describe each segment of the transportation facility; e.g., form Lease No. 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.
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.

FORM ONRR-4295 SCHEDULE 1 (revised 9/2015)

Page 2 of 3

Oil Transportation Facility Summary Sheet
Form ONRR-4295, 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).
8. Total columns (d), (e), and (h) and enter on lines 8d, 8e, and 8h.
9. For Part A, sum lines 8d, 8e, and 8h and enter on line 9 – Total Costs. Enter total quantity of production
transported from the lease, as measured at the approved royalty measurement point, to the facility on line 9 –
Total Quantity. Compute the allowance rate, to six decimals, by dividing line 9 – Total cost, by line 9 – Total
Quantity, and enter on line 9h.
When determining an allowance for sulfur or NGLs, Schedule 1C must be completed.
a.

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

b.

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

15. 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 on line 15 – Total Quantity (Note: Total quantity is
the sum of the sales quantities reported on Form ONRR-2014 for the reporting period.) Compute the
allowance rate, to six decimals, 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 15h 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 ONRR-4295 SCHEDULE 1 (revised 9/2015)

Page 3 of 3

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

OMB Control Number 1012-0002
OMB Approval Expires 09/30/2015

Non-Arm's Length Transportation
System/Segment Operations, Maintenance, and
Overhead Expenditures Form ONRR-4295,
Schedule 1A

Payor Identification Block
Payor Name and Code:
Lease Number:
Agreement Number:
Facility ID Number:
Segment ID No:
Period:
(mm/dd/ccyy)

to

A. Lessee's Operating Costs for System/Segment
Operations Supervision and Engineering
Operations Labor
Utilities
Materials
Ad Valorem Property Taxes
Rent
Supplies
Other (specify). Attach Supplemental Schedule 1A
as necessary
Total Operating Costs -- Subtotal

$____________________________
_____________________________
_____________________________
_____________________________
_____________________________
_____________________________
_____________________________
_____________________________
_____________________________
$____________________________

1
2
3
4
5
6
7
8
9
10

B. Lessee's Maintenance Costs
Maintenance Supervision
Maintenance Labor
Materials
Other (specify). Attach Supplemental Schedule 1A
as necessary
Total Maintenance Costs -- Subtotal

$____________________________
_____________________________
_____________________________
_____________________________
_____________________________
$

11
12
13
14
15
16

C. Lessee's Overhead Allocation (specify)
___________________________________
___________________________________
Other (specify) use Supplemental Schedule 1A
Total Overhead Allocation

$____________________________
_____________________________
_____________________________
$____________________________

17
18
19
20

$____________________________

21

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

E. Allocated to Segment
Lease Volume _________________ ÷ Total throughput _________________%____________________________
F. 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 ONRR-4295, SCHEDULE 1A (revised 9/2015)

$____________________________

PROPRIETARY

22
23

NONPROPRIETARY
Page 1 of 4

Non-Arm’s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form ONRR-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 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 ONRR-4295, Gas Transportation Allowance Report.
Enter the same Lease Number and Agreement Number (if applicable), as used on Form ONRR-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 ONRR-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 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 expenditure directly allocable to the facility/segment.
Line 21 – Sum line 10, 16, and 20 to obtain the total operating costs.

FORM ONRR-4295 SCHEDULE 1A (revised 9/2015)

Page 2 of 4

Non-Arm’s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form ONRR-4295, Schedule 1A
Instructions
Part E - Enter the lease volume transported through this segment and the total throughput of this segment. Divide the
lease volume by the total throughput and enter answer in 6 decimal places on line 22.
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.
Indicated 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, and roads.
Nonallowable Capital Costs – Costs incidental to marketing (e.g., compressors, 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 costs associated with the
preparation of an environmental impact statement is not allowable. However, capital costs for environmental
equipment that are an integral part of 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. Overhead costs (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 operating and maintenance of the transportation equipment and facilities.

FORM ONRR-4295 SCHEDULE 1A (revised 9/2015)

Page 3 of 4

Non-Arm’s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form ONRR-4295, Schedule 1A
Instructions
Nonallowable Operating Costs –
1. Costs incidental to marketing; e.g. gathering, long term storage (more than 30 days), compression to meet a
standard high-pressure pipeline, separation, and dehydration; also, heaters, treaters, meters, water knockouts, ACT
meters, meter sleds, and pumps (surface, subsurface, and circulating), and operating costs associated with
nonallowable capital expenditures.
2. Theoretical line losses (based on volume or value) are not allowable transportation costs unless these costs are
based on a FERC or State approved tariff.
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.
5. Costs for services that the lessee is obligated to perform at not cost to the lessor.

FORM ONRR-4295 SCHEDULE 1A (revised 9/2015)

Page 4 of 4

U.S. Department of the Interior

OMB Control Number 1012-0002

Office of Natural Resources Revenue

OMB Approval expires 09/30/2015

Non-Arm's-Length Transportation
System/Segment Operations, Maintenance, and
Overhead Expenditures Form ONRR-4295,
Supplemental Schedule 1A

Payor Identification Block
Payor Name and Code: _____________
Lease Number: ____________________
Agreement Number: ________________
Facility ID No: _____________________
Segment ID No: ___________________
Period:
to

(mm/dd/ccyy)

Type of Expenditure - Describe

$

Total

THIS INFORMATION SHOULD BE CONSIDERED (Please check one)

FORM ONRR-4295 SUPPLEMENTAL SCHEDULE 1A (revised 9/2015)

$
PROPRIETARY

NONPROPRIETARY
Page 1 of 2

Non-Arm’s-Length Transportation System/Segment Operations,
Maintenance, and Overhead Expenditures
Form ONRR-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 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 9, 15, or 19
accordingly.
Indicate by checking the appropriate box whether the information should be considered proprietary or nonproprietary.

FORM ONRR-4295 SUPPLEMENTAL SCHEDULE 1A (revised 9/2015)

Page 2 of 2

U.S. Department of the Interior

OMB Control Number 1012-0002

Office of Natural Resources Revenue

OMB Approval Expires 9/30/2015

PAYOR IDENTIFICATION BLOCK
Payor Name and Code:
Lease Number:
Agreement Number:
Facility ID No:
Segment ID No:
Period:
(mm/dd/ccyy)
to

Non-Arm's-Length Transportation System/Segment
Depreciation and Capital Expenditure Summary form
ONRR-4295, Schedule 1B

1

Expenditure Item

2
Initial Capital
Investment and Date
Placed in Service
$

3

Salvage Value

4
Depreciable
Life/Years of
Depreciation Taken
to Date

$

Totals
Allocated to Segment (from line 22, Schedule 1A)
Segment Depreciation and Capital Expenditure
(Line 8 x line 9) Enter in column g and e, Schedule 1
THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
Form ONRR-4295 SCHEDULE 1B (revised 9/2015)

5
Undepreciated
Capital Investment
at Beginning of
Year
$

$

Undepreciated
Capital Investment
at End-of-Year
$

$
%
$

$
%
$

8
9
10

PROPRIETARY

6

7

Depreciation

NONPROPRIETARY
Page 1 of 2

Non-Arm’s-Length Transportation System/Segment
Depreciation and Capital Expenditures Summary
Form ONRR-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 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 ONRR-4295 SCHEDULE 1B (revised 9/2015)

Page 2 of 2

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

Liquids
(a)

Product

OMB Control Number 1012-0002
OMB Approval Expires 9/30/2015

Non-Arm's-Length Transportation Gas
Liquids and Sulfur from the Lease to the Gas
Processing Plant Form ONRR-4295, Schedule
1C

PAYOR IDENTIFICATION BLOCK
Payor Name and Code: _____________________
Lease Number: ___________________________
Agreement Number: _______________________
Facility ID No: ____________________________
Segment ID No: ___________________________
Period: __________________________________
(mm/dd/ccyy)
to

(b)

(c)

(d)

(e)

(f)

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)

Ethane
Propane
Isobutane
N-butane
Pentanes
Hexane
Heptane

0.039608
0.036416
0.030829
0.031527
0.027437
0.024244
0.021550

Pentanes and
Heavier
Other
Other
Other
Totals

$

0.024044

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

Sulfur
(a)

Tons of
Sulfur Sold

1
2
3
4
5
6
7

(b)

(c)

Plant 2/
Recovery
Factor

Tons of
Sulfur in
Gas Stream
(a)÷(b)

(d)
Volume (Mcf)
3/ of H2S in
Gas Stream
(c) x
26.207682

8
9
10
11
12

$
$

(e)

(f)

Allowance per
Mcf (line 9h
Schedule 1)

Sulfur Allowance
(d x e)÷a
$

1/ Petroleum Refinery Engineering, Fourth Edition, McGraw Hill (1958).
2/ To be based on actual plant sulfur recovery experience.
3/ Based upon PV = ZNRT Mcf at 60°F, 14.73 psia, 94.08467 Wt% S in H2S.
THIS INFORMATION SHOULD BE CONSIDERED (Please check one)
FORM ONRR-4295, SCHEDULE 1C (revised 9/2015)

PROPRIETARY

NONPROPRIETARY

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13

Non-Arm’s-Length Transportation
Gas Liquids and Sulfur from the Lease to the Gas Processing Plant
Form ONRR-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 used by the payor, if available. Otherwise use the NGL volume factor listed
(Mcf/Gallon).
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 the 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 sulfur as follows:
a. Enter the 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 lease to the plant from line 9h, Schedule 1.
f.

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

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

FORM ONRR-4295 SCHEDULE 1C (revised 9/2015)

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