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

AGENCY:

Minerals Management Service, Interior.

ACTION:

Notice of states' decisions to participate or not participate in accounting and auditing relief for Federal oil and gas marginal properties located in their state for calendar year 2006.

SUMMARY:

The Minerals Management Service (MMS) published final regulations on September 13, 2004 (69 FR 55076), to provide accounting and auditing relief for marginal Federal oil and gas properties. The rule requires MMS to publish in the Federal Register the decisions of the states concerned to allow or not to allow one or both forms of relief in their state. As required in the rule, MMS provided each state receiving a portion of the Federal royalties with a list of qualifying marginal Federal oil and gas properties located in the state so that each affected state could decide whether to participate in one or both relief options. This Notice provides the decisions by the respective states concerned to allow one or both types of relief.

DATES:

Effective Date: January 1, 2006.

FOR FURTHER INFORMATION CONTACT:

Mary Williams, Manager, Federal Onshore Oil and Gas Compliance and Asset Management, telephone (303) 231-3403, FAX (303) 231-3744, e-mail to mary.williams@mms.gov, or mail to P.O. Box 25165, MS 392B2, Denver Federal Center, Denver, Colorado 80225-0165.

SUPPLEMENTARY INFORMATION:

The rule implemented certain provisions of Section 7 of the Federal Oil and Gas Royalty Simplification and Fairness Act of 1996 and provides two options for relief: (1) Notification-based relief for annual reporting, and (2) other requested relief, as proposed by industry and approved by MMS and the state concerned. The rule requires that MMS publish by December 1 of each year a list of the states and the decisions of each state regarding marginal property relief.

To qualify for the first option of relief (notification-based relief) for calendar year 2006, properties must have produced less than 1,000 barrels-of-oil-equivalent (BOE) per year for the base period (July 1, 2004-June 30, 2005). Annual reporting relief will begin on January 1, 2006, with the annual report and payment due February 28, 2007 (unless an estimated payment is on file, which will move the due date to March 31, 2007). To qualify for the second option of relief (other requested relief), properties must have produced less than 15 BOE per well per day for the base period.

The following table shows the states that have marginal properties, where a portion of the royalties are shared between the state and MMS, and the states' decisions whether to allow one or both forms of relief.

Federal oil and gas properties located in all other states are eligible for relief if they qualify as marginal properties under the rule and if no portion of the royalties derived from the property is shared with the state.

For information on how to obtain relief, please refer to the rule, which can be viewed on the MMS Web site at http://www.mrm.mms.gov/Laws_R_D/ FRNotices/AC30.htm.

All correspondence, records, or information received in response to this Notice are subject to disclosure under the Freedom of Information Act. All information provided will be made public unless the respondent identifies which portions are proprietary. Please highlight the proprietary portions, including any supporting documentation, or mark the page(s) that contain proprietary data. Proprietary information is protected 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)), the Indian Mineral Development Act of 1982 (25 U.S.C. 2103), and Department regulations (43 CFR part 2).