(a) We will not consider ineligible costs as set forth in Sec. 203.89(h) in determining economic viability for purposes of royalty relief.
(b) We will consider sunk costs according to the following table. ----------------------------------------------------------------------------------------------------------------
(1) Include sunk costs, Whether a field that includes a pre-Act lease which has
not produced, other than test production, before the
application or redetermination submission date needs
relief to become economic.(2) Not include sunk costs, Whether an authorized field, a development project, or an
expansion project can become economic with full relief
(see Sec. 203.67).(3) Not include sunk costs, How much suspension volume is necessary to make the field,
a development project, or an expansion project economic
(see Sec. 203.69(c)).(4) Include sunk costs for the project discovery Whether a development project or an expansion project
well on each lease, needs relief to become economic.----------------------------------------------------------------------------------------------------------------