Sep 302021

Time limit: This Directive shall apply to all overlapping certification bodies whose date of validity is after the date of issue of that rapid management body. In accordance with MS 3160-9, the date of entry into force of a certification body is the date of agreement or the date of commencement of production from communitarisation packages, whichever is earlier. The treatment of horse CAs in this way has led to problems with production and reporting assignment. The Office of Natural Resources Revenue (ONRR) has raised concerns that blM is not uniform, on a case-by-case basis and across the different offices in the Land blM, in assessing overlapping CAS. The work of calculating these assignments by the ONRR requires a lot of work, as each overlapping certification body requires individual verification and counting. In addition, the BIA and industry have identified problems with the allocation of production to unp overlapping leasing contracts. Subject: This Memorandum (IM) establishes a procedure for the decision and approval of a draft communitarisation agreement (CA) when the area covered by the proposed CA overlaps with an area covered by an existing CA zone or single participation area (PA) for the same formation. This rapid messaging service directs offices to stop allocating production and related royalties from a new certification body that overlap to an existing underlying certification body, if the offices allow a new overlapping certification body. Agencies typically require federal and Indian lease operators to respect well distances and state location orders. However, agencies may impose other requirements if BLM finds that the well distance and the state situation are not in the public interest or in the best interest of Indian owners. If necessary for the full exploitation of the mineral resource, operators may obtain and obtain from the State regulatory authority the authorization of units of distance that overlap with existing units of distance. Although agencies do not modify existing certification bodies to meet the following distance sequences, the BLM requires the creation of a new certification body corresponding to the new overlapping distance unit.

Some BLM offices have asked the new CA, which would duplicate an existing CA(s), to allocate production and corresponding royalties to existing CA(s). The operator would then allocate this production and the royalties related to the leases within the existing CA(s). When it comes to the vertical development of drilling projects, there is usually only an overlap of an existing certification body. However, due to the large size of horizontal development units, there may be several overlapping CAs. Agencies will continue to follow existing guidelines to deal with a proposed certification body that would duplicate an existing certification body within a federal or Indian unit (see Project H-3180-1). Since there are already guidelines for overlapping ASAs/SAAs and overlapping SAA/APs are generally limited to overlap between agreements, there have been no problems in assessing these overlaps. Each factual scenario will be different and an oil tanker and a gas company will need to assess the facts and risks to determine the level of clarification and healing measures needed to address the risks associated with novation requests when leases overlap. Where the operator allocates production by the new certification body to existing overlapping certification bodies, the allocated production sometimes goes to leases outside the boundaries of the new certification body. The production awarded by the new overlapping certification body holds these leasing contracts and prevents them from being terminated, even after the actual production to the existing certification body has ceased.

With large horizontal development units and multiple overlapping certification bodies, this can happen even if the drilling produced is several miles away from an existing certification body previously authorized in the overlap sequence/chain. Background: The current BLM Guide (MS 3160-9) remains silent on how BLM should deal with a proposed certification body that would duplicate one or more existing certification bodies. . . .

 Posted by at 4:58 pm

Sorry, the comment form is closed at this time.