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States' Decisions on Participating in Accounting and Auditing Relief for Federal Oil and Gas Marginal Properties

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Office of Natural Resources Revenue, Interior.


Notice of states' decisions to participate or not participate in accounting and auditing relief for Federal oil and gas marginal properties located within the states' boundaries for calendar year 2011.


Final regulations published September 13, 2004 (69 FR 55076), provide two types of accounting and auditing relief for Federal onshore or Outer Continental Shelf lease production from marginal properties. As required by the regulations, the Office of Natural Resources Revenue (ONRR) (the former Minerals Management Service) provided a list of qualifying marginal Federal oil and gas properties to states that received a portion of Federal royalties. Each state then decided whether to participate in one or both relief options. For calendar year 2011, this notice provides the decisions by the affected states to allow one or both types of relief.


Effective January 1, 2011.

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Thomas Peterson, Economic and Market Analysis, ONRR, telephone (303) 231-3869; e-mail thomas.peterson@; or mail to Office of Natural Resources Revenue, P.O. Box 25165, MS 61110B, Denver Federal Center, Denver, Colorado 80225-0165.

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The regulations, codified at 30 CFR part 1204, subpart C, implement certain provisions of section 7 of the Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 (RSFA) (Pub. L. 104-185, 110 Stat. 1700, 1715 (Aug. 13, 1996)) and provide two options for relief: (1) Notification-based relief for annual reporting; and (2) other requested relief, as proposed by industry and approved by ONRR and the affected state. The regulations require ONRR to publish a list of the states and their decisions regarding marginal property relief by December 1 of each year.

To qualify for the first relief option (notification-based relief) for calendar year 2011, properties must have produced less than 1,000 barrels-of-oil-equivalent (BOE) per year for the base Start Printed Page 6820period (July 1, 2009, through June 30, 2010). Annual reporting relief will begin January 1, 2011, with the annual report and payment due February 28, 2012; or March 31, 2012, if an estimated payment is on file. To qualify for the second relief option (other requested relief), the combined equivalent production of the marginal properties during the base period must equal an average daily well production of less than 15 BOE per well per day calculated under 30 CFR 1204.4(c).

The following table shows the states that have qualifying marginal properties and the states' decisions to allow one or both forms of relief.

StateNotification-based relief (less than 1,000 BOE per year)Request-based relief (less than 15 BOE per well per day)
New MexicoNoYes
North DakotaYesYes
South DakotaNoNo

Federal oil and gas properties located in all other states where a portion of Federal royalties is not shared with the state are eligible for relief if they qualify as marginal under the regulations. The ONRR believes this covers any exceptions under section 117(c) of RSFA (30 U.S.C. 1726(c)). For information on how to obtain relief, please refer to 30 CFR 1204.205 or to the published rule, which you may view on our Web site at​Laws_​R_​D/​FRNotices/​AC30.htm.

Unless the information received is proprietary data, all correspondence, records, or information that we receive in response to this notice may be subject to disclosure under the Freedom of Information Act (FOIA) (5 U.S.C. 552 et seq.). If applicable, please highlight the proprietary portions, including any supporting documentation, or mark the pages that contain proprietary data. Proprietary information is protected by the Trade Secrets Act (18 U.S.C. 1905); FOIA, Exemption 4; and Department regulations (43 CFR part 2).

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Dated: February 3, 2011.

Gregory J. Gould,

Director, Office of Natural Resources Revenue.

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[FR Doc. 2011-2745 Filed 2-7-11; 8:45 am]