The tables in this section summarize the similar application and approval provisions for the discretionary end-of-life and deep water royalty relief programs in Sec. Sec. 203.50 to 203.91. Because royalty relief for deep gas on leases not subject to deep water royalty relief, as provided for under Sec. Sec. 203.40 to 203.48, does not involve an application, its provisions do not parallel the other two royalty relief programs and are not summarized in this section.
(a) We require the information elements indicated by an X in the following table and described in Sec. Sec. 203.51, 203.62, and 203.81 through 203.89 for applications for royalty relief. ----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Information elements lease Expansion Pre-act Development
(1) Administrative information report................. X X X X(2) Net revenue and relief justification report X ........... ...........
(prescribed format)..................................(3) Economic viability and relief justification report .............. X X X
(Royalty Suspension Viability Program (RSVP) model
inputs justified with Geological and Geophysical
(G&G;), Engineering, Production, & Cost reports)......(4) G&G; report........................................ .............. X X X(5) Engineering report................................ .............. X X X(6) Production report................................. .............. X X X(7) Deep water cost report............................ .............. X X X----------------------------------------------------------------------------------------------------------------
(b) We require the confirmation elements indicated by an X in the following table and described in Sec. Sec. 203.70, 203.81, 203.90 and 203.91 to retain royalty relief. ----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Confirmation elements lease Expansion Pre-act Development
(1) Fabricator's confirmation report.................. .............. X X X(2) Post-production development report approved by an .............. X X X
independent certified public accountant (CPA) * * *..----------------------------------------------------------------------------------------------------------------
(c) The following table indicates by an X, and Sec. Sec. 203.50, 203.52, 203.60 and 203.67 describe, the prerequisites for our approval of your royalty relief application. ----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Approval conditions lease Pre-act Development
(1) At least 12 of the last 15 months have the X ........... ...........
required level of production.........................(2) Already producing................................. X ........... ...........(3) A producible well into a reservoir that has not .............. X X X
produced before......................................(4) Royalties for qualifying months exceed 75 percent X ........... ...........
of net revenue (NR)..................................(5) Substantial investment on a pre-Act lease (e.g., .............. ........... ...........
platform, subsea template)...........................(6) Determined to be economic only with relief........ .............. X X X----------------------------------------------------------------------------------------------------------------
(d) The following table indicates by an X, and Sec. Sec. 203.52, 203.74, and 203.75 describe, the prerequisites for a redetermination of our royalty relief decision. ----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Redetermination conditions lease Expansion Pre-act Development
(1) After 12 months under current rate, criteria same X ........... ...........
as for approval......................................(2) For material change in geologic data, prices, .............. X X X
costs, or available technology.......................----------------------------------------------------------------------------------------------------------------
(e) The following table indicates by an X, and Sec. Sec. 203.53 and 203.69 describe, the characteristics of approved royalty relief. ----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Relief rate and volume, subject to certain conditions lease Expansion Pre-act Development
(1) One-half pre-application effective lease rate on X ........... ...........
the qualifying amount, 1.5 times pre-application
effective lease rate on additional production up to
twice the qualifying amount, and the pre-application
effective lease rate for any larger volumes..........(2) Qualifying amount is the average monthly X ........... ...........
production for 12 qualifying months..................(3) Zero royalty rate on the suspension volume and the .............. X X X
original lease rate on additional production.........(4) Suspension volume is at least 17.5, 52.5 or 87.5 .............. ........... X
million barrels of oil equivalent (MMBOE)............(5) Suspension volume is at least the minimum set in .............. X ........... X
the Notice of Sale, the lease, or the regulations....(6) Amount needed to become economic.................. .............. X X X----------------------------------------------------------------------------------------------------------------
(f) The following table indicates by an X, and Sec. Sec. 203.54 and 203.78 describe, circumstances under which we discontinue your royalty relief. ----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Full royalty resumes when lease Expansion Pre-act Development
(1) Average NYMEX price for last 12 months is at least X ........... ...........
25 percent above the average for the qualifying
months...............................................(2) Average NYMEX price for last calendar year exceeds .............. X X
$28/bbl or $3.50/mcf, escalated by the gross domestic
product (GDP) deflator since 1994....................(3) Average prices for designated periods exceed .............. X ........... X
levels we specify in the Notice of Sale or the lease.----------------------------------------------------------------------------------------------------------------
(g) The following table indicates by an X, and Sec. Sec. 203.55, 203.76, and 203.77 describe, circumstances under which we end or reduce royalty relief. ----------------------------------------------------------------------------------------------------------------
Deep water
End-of-life -----------------------------------------
Relief withdrawn or reduced lease Expansion Pre-act Development
(1) If recipient requests............................. X X X X(2) Lease royalty rate is at the effective rate for 12 X ........... ...........
consecutive months...................................(3) Conditions occur that we specified in the approval X ........... ...........
letter in individual cases...........................(4) Recipient does not submit post-production report .............. X X X
that compares expected to actual costs...............(5) Recipient changes development system.............. .............. X X X(6) Recipient excessively delays starting fabrication. .............. X X X(7) Recipient spends less than 80 percent of proposed .............. X X X
pre-production costs prior to start of production....(8) Amount of relief volume is produced............... .............. X X X----------------------------------------------------------------------------------------------------------------