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.
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.