Valuation
How Valuation Works
Volume is the quantity and quality of production as measured at the approved royalty measurement point. The Bureau of Land Management (BLM) or Bureau of Safety and Environmental Enforcement (BSEE) approve measuring points.
The unit value is the price at which you sold each unit of production or another price required by regulations. See valuation regulations for pricing non-arm's-length transactions. Pricing on Indian lands depends on the lease terms and location of the land. Learn how to price oil and gas on Indian lands.
The royalty rate is the rate specified in your lease.
Allowances are deductions in determining royalty value for reasonable, actual costs the lessee incurs.
Completed Forms ONRR-2014 for royalty payments and the associated payments are due by the end of the month following the production month (30 CFR 1210.53(a)).
Unbundling Cost Allocations (UCAs)
For questions or guidance on unbundling, contact onrrunbundling@onrr.gov
Unbundling Cost Allocations (UCAs)
If lessees choose to take allowances against their federal gas gross proceeds, they (not ONRR) must unbundle those allowances. ONRR provides Unbundling Cost Allocations (UCA) as a courtesy, and your use of a UCA does not limit ONRR’s right to audit and requires strict compliance with ONRR regulations.
Non-Arm’s-Length Agreements
A lessee transporting or processing Federal natural gas under a non-arm’s-length agreement must comply with the regulations for claiming allowances for transportation and processing costs, including 30 CFR 1206.157 and 1206.159 (for production prior to January 1, 2017) and 30 CFR 1206.152, 1206.154, 1206.159, and 1206.161 (for production after January 1, 2017). A lessee must base its transportation and processing allowance on its reasonable, actual costs and may not use values posted on this website.
Arm’s-Length Agreements
A lessee transporting or processing Federal natural gas under arm’s-length agreements must comply with the regulations for claiming allowances for transportation and processing costs in 30 CFR 1206.157 and 1206.159 (for production prior to January 1, 2017) and 30 CFR 1206.152, 1206.153, 1206.159, and 1206.160 (for production after January 1, 2017). When a lessee pays a bundled rate under an arm’s-length contract for both transportation and processing as well as to put gas into marketable condition, the lessee must unbundle that rate in order to comply with these regulations. A lessee cannot claim allowances for fees to place lease products into marketable condition under the provisions at 30 CFR 1206.152(i) and 1206.153(i) (for production prior to January 1, 2017) and 30 CFR 1206.146 (for production after January 1, 2017).
ONRR calculates the UCAs on this website based on the best information available to ONRR at the time of publication. If ONRR receives more accurate information, ONRR may update and modify a UCA. When ONRR updates or modifies information you may be subject to additional royalty obligations and associated interest or a credit under the provisions at 30 CFR 1206.156 (transportation allowances for production prior to January 1, 2017) and 1206.158 (processing allowances for production prior to January 1, 2017) and 30 CFR 1206.157 (transportation allowances for production after January 1, 2017) and 1206.164 (processing allowances for production after January 1, 2017). When ONRR updates a UCA for a specific year, you should adjust previously submitted royalty lines only for that specific year. You may use the most recent UCAs as estimates for future reporting months until such time as ONRR provides updated information.
Overview
If you claim allowances against your royalty value, you must unbundle those costs. Unbundling is the process of determining the allowed and disallowed costs included in bundled gas transportation and/or processing fees. You may not claim allowances for costs to place gas into marketable condition or other disallowed services that may be included in bundled fees.
Standardized Unbundling Cost Allocations (UCAs)
ONRR publishes Standardized Unbundling Cost Allocations (UCAs) that a lessee may use to calculate and report Federal arm’s-length processing allowances. Standardized UCAs are specific to both location of gas production and processing technology. Lessees may not use a Standardized UCA when there is an ONRR published plant-specific UCA available. A lessee may not continue to use a Standardized UCA if ONRR later publishes a plant-specific UCA for the plant used by that lessee. Standardized (and plant-specific) UCAs are not applicable to gas produced from Indian leases.
In summary, you may use a standardized UCA for processing allowances if:
1. Gas production is from a federal lease and not from an Indian (Tribal or allotted) lease.
2. We have not published a plant-specific UCA for the gas plant that processes your gas.
3. The processing contract is arm’s-length.
4. Gas production is in the geographical area and uses the technology specific to the Standardized UCA.
Like plant-specific UCAs, you are not required to use standardized UCAs. We provide them as a courtesy, and your use of a standardized UCA does not limit ONRR’s right to audit and requires strict compliance with ONRR regulations.
San Juan Basin
Published: 09/13/2018
| Standardized Plant UCA | Standardized Fuel UCA | |
|---|---|---|
| Allowed | 42% | 31% |
| Disallowed | 58% | 69% |
Green River Basin
Published: 09/13/2018
| Standardized Plant UCA | Standardized Fuel UCA | |
|---|---|---|
| Allowed | 52% | 55% |
| Disallowed | 48% | 45% |
Offshore Gulf - Cryogenic*
Published: 10/18/2016
| Standardized Plant UCA | Standardized Fuel UCA | |
|---|---|---|
| Allowed | 65% | 25% |
| Disallowed | 35% | 75% |
Offshore Gulf - Lean-Oil*
Published: 10/18/2016
| Standardized Plant UCA | Standardized Fuel UCA | |
|---|---|---|
| Allowed | 80% | 80% |
| Disallowed | 20% | 20% |
* The standardized UCA may not be applicable to leases that fall under Section 6 of the Outer Continental Shelf Leasing Act. You are responsible for determining allowances under the terms of your leases.
Specific Transportation System/Gas Plant UCAs
We calculate UCAs for specific transportation systems and gas plants. ONRR published UCAs are not applicable to gas produced from Indian (Tribal or allotted) leases.Â
When filing reports, use the most recent published UCA to estimate allowances. For example, use 2010 UCAs to estimate 2011, 2012, and 2013.
When we publish a new UCA, replace the estimated values for years that have new UCAs. For example, if we published new UCAs for 2011 and 2012, you would update values for 2011 and 2012. You would leave the previous estimate for 2013.
| Transportation system or gas plant | Type | Operator | Location | Doc Date |
|---|---|---|---|---|
| Blacks Fork | Plant | Andeavor Logistics | WY | 2/12/2018 |
| Buena Suerte Transportation System | Trans/Plant | Elm-Ridge | NM | 9/08/2014 |
| Calumet Gas Plant | Plant | Enterprise | LA | 8/07/2015 |
| Carlsbad Transportation System and Dew Point Plant | Trans/Plant | Enterprise | NM | 9/08/2014 |
| Chipeta Plant | Plant | Anadarko | UT | 2/12/2018 |
| DCP Supersystem | Plant | DCP Midstream | NM | 9/26/2019 |
| Echo Springs Gas Plant | Plant | Williams | WY | 2/01/2018 |
| Eunice Gas Plant | Plant | Enlink | LA | 3/23/2016 |
| Lybrook and Otero Transportation Systems - Huerfano Mountain Gas Plant | Trans/Plant | Elm-Ridge | NM | 9/08/2014 |
| Manzanares Transportation System | Trans | Williams | NM | 11/25/2013 |
| Meeker Gas Plant | Plant | Enterprise | CO | 8/16/2017 |
| Mobile Bay Gas Plant | Plant | Williams Mobile Bay Producer Services, LLC | AL | 7/21/2016 |
| Neptune Gas Plant | Plant | Enterprise | LA | 1/16/2016 |
| North Terrebonne Gas Plant | Plant | Enterprise | LA | 9/30/2015 |
| Opal Gas Plant | Plant | Williams | WY | 7/31/2015 |
Unbundling Methods
Examples of how to unbundle bundled fees are provided. These are not the only unbundling methods. You can use other methods that follow ONRR regulations. Regardless of the method used to unbundle, you are still subject to audit.
Examples
- How to Calculate a Transportation UCA
- How to Calculate a Processing UCA
- List of Engineering Data Needs
- List of Accounting and Cost Data Needs
See the Standardized UCAs and Plant-Specific UCAs pages for examples of applying UCAs. There are also Reporter Letters that apply to UCAs.
Valuation Regulations
We provide guidance to help determine product value based on Federal and Indian Valuation Regulations. Lease terms supersede regulations.
View ONRR's current CFRs on the GPO Electronic Code of Federal Regulations (eCFR).Â
For questions or guidance on valuation regulations, contact royaltyvaluation@onrr.gov
Rulemakings
Oil
| Federal/Indian | Current Rulemakings | Current CFR Citations | Historical Rulemakings |
|---|---|---|---|
| Federal | 2016 Valuation Rule (AA13) | 30 CFR 1206.100 – 1206.119 | All Federal Oil Rules |
| Indian (non-Osage) | 2015 Indian Oil Rule (AA15) | 30 CFR 1206.50 – 1206.65 | All Indian Oil Rules |
Gas
| Federal/Indian | Current Rulemakings | Current CFR Citations | Historical Rulemakings |
|---|---|---|---|
| Federal | 2016 Valuation Rule (AA13) | 30 CFR 1206.140 – 1206.165 | All Federal Gas Rules |
| Indian (non-Osage) | 2000 Indian Gas Rule (AC72) | 30 CFR 1206.170 – 1206.181 | All Indian Gas Rules |
Coal
| Federal/Indian | Current Rulemakings | Current CFR Citations | Historical Rulemakings |
|---|---|---|---|
| Federal | Partial Repeal of Consolidated Federal Oil & Gas and Federal & Indian Coal Reform | 30 CFR 1206.250 – 1206.273 | All Federal Coal Rules |
| Indian | Partial Repeal of Consolidated Federal Oil & Gas and Federal & Indian Coal Reform | 30 CFR 1206.450 – 1206.473 | All Indian Coal Rules |
Other Solid Minerals
| Federal/Indian | Current Rulemakings | Current CFR Citations | Historical Rulemakings |
|---|---|---|---|
| Federal & Indian | Solid Minerals Reporting Requirements (AC86) | 30 CFR 1206.301 | All Solid Minerals Rules |
Geothermal
| Federal/Indian | Current Rulemakings | Current CFR Citations | Historical Rulemakings |
|---|---|---|---|
| Federal & Indian | 2007 Geothermal Rule (AD32) | 30 CFR 1206.350 – 1206.366 | All Geothermal Rules |
Valuation Handbooks
Valuation Resources for Indian Leases
Interactive webpage for Valuation Resources for Indian Leases
Download Valuation Resources for Indian Leases Word document
Geothermal Payor Handbook - Class 1 Leases
Interactive webpage for the Geothermal Payor Handbook - Class 1 Leases
Geothermal Payor Handbook - Class 2 & 3 Leases
Interactive webpage for the Geothermal Payor Handbook - Class 2 & 3 Leases
Download Geothermal Payor Handbook - Class 2 & 3 Leases PDF
Valuation ExamplesÂ
Royalty Valuation produced the following examples to assist in correct valuation reporting. More examples are being produced and will be available as completed.
These examples serve as guidance for determining value for royalties and are not an appealable decision or order under 30 CFR 1290. If ONRR issues you an order to pay additional royalties or assesses civil penalties under 30 CFR 1241 at a later date based on this guidance, your appeal rights will be provided at that time. While these examples are not appealable, ONRR may use this guidance in conducting audits and as a basis for demanding additional royalties.
To find the example that fits your reporting, start by selecting Federal or Indian from the options below. If applicable, choose the area or zone. The example you need will be listed under Processed or Unprocessed Gas.
Federal Reporting
Processed GasÂ
Federal Processed Gas Reporting
Unprocessed Gas
Percent of Proceeds (POP) pre-2016
Indian Reporting
Reporting in an Index Zone Arm's-Length Dedicated Contracts
If you are reporting on an Index Zone Arm's-Length Dedicated Contract, choose the gas type to find the accounting example that fits your reporting.Â
Processed Gas
Alternative Dual Accounting
Actual Dual Accounting
Reporting in an Index Zone Arm's-Length Non-Dedicated Contract
If you are reporting on an Index Zone Arm's-Length Non-Dedicated Contract, choose the gas type to find the accounting example that fits your reporting.Â
Processed Gas
Alternative Dual Accounting
Processed Gas Reporting (Non-Dedicated Contract) in an Index Zone Using Alternative Dual Accounting
Actual Dual Accounting
Processed Gas Reporting (Non-Dedicated Contract) in an Index Zone Using Actual Dual Accounting
Unprocessed Gas
Alternative Dual Accounting
Unprocessed Gas Reporting (Non-Dedicated Contract) in an Index Zone with Alternative Dual Accounting
Actual Dual Accounting
Contact:Â royaltyvaluation@onrr.gov
Reporting in a Major Portion Area
If you are reporting in a Major Portion Area, choose the gas type to find the accounting example that fits your reporting.
Processed Gas
Initial Reporting
Initial Reporting Example: Processed Gas in Non-Index Zone Areas
Minimum Value Provisions for NGLs
Indian Example: Minimum NGL Value
Actual Dual Accounting
Revised Reporting Example: Actual Dual Accounting Processed Gas in Non-Index Zone Areas
Alternative Dual Accounting
Revised Reporting Example: Alternative Dual Accounting Processed Gas in Non-Index Zone Areas
Unprocessed Gas
Initial Reporting
Initial Reporting Example: Unprocessed Gas Reporting in Non-Index Zone (Major Portion) Areas
Actual Dual Accounting
Contact:Â royaltyvaluation@onrr.gov
Alternative Dual Accounting
Valuation Resources
ONRR determines royalties based on the valuation standards and procedures under 30 CFR 1202 and 1206 apply to all oil and gas production that is:
- removed or sold from the lease,
- avoidably lost,
- wasted,
- drained, or
- otherwise subject to royalty under the terms of the lease.
Valuation Basics, Indian Valuation Resources, and Federal Valuation Resources provide royalty valuation procedures for oil and gas production as well as information on establishing and reporting processing and transportation allowances. They also provide instructions for completing dual accounting, safety net, and transportation and processing allowance forms.
Valuation Basics
Coming soon!
Federal Valuation Resources
Coming soon!