Volume 4, issue #4 - 03-03-1999

sponsored by:

MMS proposes accounting and auditing relief for low-volume wells

21-01-99 The U.S. Interior Department's Minerals Management Service proposed rules to provide accounting and auditing relief in the royalty fees paid by leaseholders of low-volume oil and natural gas wells located on federal land.
The new regulations would include specific options to reduce reporting requirements, provide audit relief and allow for the use of alternative methods to determine the value of oil and natural gas production.
The rules would apply only to so-called "marginal" properties that produce less than 15 bpd or 90,000 cfpd of natural gas.
"Our purpose for providing relief for marginal producers is to promote production, reduce administrative costs and increase revenues to the states and federal government," said MMS Director Cynthia Quarterman.
The new rules come at time that marginal producers are suffering from low crude prices, which have forced many to shut their well operations.
The proposed rules were published in the Federal Register and the MMS said it would take public comment on the guidelines through March 22.
The regulatory relief is being implemented as part of a royalty simplification law enacted in August 1996.