Valuation
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.