mitree's world

A separate form for each transfer, in triplicate, must be filed for each lease out of which a transfer is made. The BLM does not require triplicate copies of the assignment or transfer when it is electronically submitted. Copies of documents other than the current form approved by the Director must not be submitted. However, reference(s) to other documents containing information affecting the terms of the transfer may be made on the submitted form. A commenter expressed concerns regarding the proposed changes in light of the BLM’s own delays in processing APDs and lease suspensions and with agency policy against “premature suspensions.” The commenter asked the BLM to clarify its intent so that lessees can clearly understand the appropriate time by which they should submit any requests for suspensions.

The BLM reorganized paragraph (d) for temporarily abandoned wells to add subparagraphs and ensure the language in the final rule was clear. The BLM also added paragraph (f) to cover the requirements for mechanical integrity tests. The BLM makes these changes in the final rule to more clearly inform the regulated community of the requirements. One commenter requested that a provision be added to the regulations that allows recreational access to the reclaimed locations.

Lease income

Other commenters stated that the 90-day threshold proposed by the BLM is arbitrary, because there is no recorded evidence that the BLM can approve an APD in 90 days. The BLM proposed the 90 days based upon the BLM’s average processing time for an APD across all BLM offices. In fiscal year 2022, the BLM’s average processing time did increase to 162 days; however, the BLM decided accounting for lease termination lessor to keep with the 90-day limit as it represents an average over a period of 3 years. The BLM did not propose any changes to this paragraph and disagrees with the commenter. If the operator does not need the water well and it is not supporting on-lease activity, the BLM cannot require the operator to cover any additional costs related to setting up the well as a water well.

The discount rate used to determine present value should be the rate of interest implicit in the lease. Practitioners will need to look closely at each fact pattern to determine the proper treatment of a lessor’s termination payment, as the result will depend on the motivation behind the overall transaction and the steps undertaken to achieve it. Where available, this rule can provide accelerated cost recovery and remove some of the uncertainty that often surrounds the treatment of these payments.

PART 3160—ONSHORE OIL AND GAS OPERATIONS

(e) The potential for oil and gas development, giving preference to lands with high potential for development. (a) No action pursuant to the regulations in this subpart will be suspended under 43 CFR 4.21(a) due to a protest from a notice by the authorized officer to hold a lease sale. (2) The oil and gas interests of the United States in the lands have been disposed of or otherwise have become unavailable for leasing. The payment of a compensatory royalty will extend the term of any lease for the period during which such compensatory royalty is paid and for a period of 1 year from the discontinuance of such payments. (a) A legally recognized change of name of a lessee or sublessee must be reported to the proper BLM office. The notice of name change must be submitted in writing with adequate information concerning the name change.