US MMS eases reporting regulations on marginal oil and gas properties

By OGJ editors
HOUSTON, Sept. 17 -- The US Minerals Management Service has issued a new regulation aimed at reducing administrative costs and reporting duties for marginal oil and natural gas well owners.

The rule outlines how lessees and their designees can obtain accounting and auditing relief for production from federal oil and gas leases that qualify as marginal properties.

A marginal property is defined as having average production of fewer than 15 boe/d for each well or 1,000 boe/year for the entire property.

"This new rule encourages leaseholders to continue production from marginal properties," said Lucy Querques Denett, MMS associate director in Washington, D.C.

The rule provides that leaseholders of marginal properties can report and make royalty payments on an annual basis rather than on a monthly basis.

The MMS noted that if the marginal property involves onshore wells, then the state government where the production occurs also must concur before the relief will be granted. If the marginal property is in federal waters, the MMS can approve the reporting relief.

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