The allocation depends on when production occurs, when we issued the lease, when we assigned it to the field, and whether we award the volume suspension by an approved application or establish it in the lease terms, as prescribed in this section.
(a) If your authorized field has an approved royalty suspension volume under Sec. Sec. 203.67 and 203.69, we will suspend payment of royalties on production from all leases in the field that participate in the application until their cumulative production equals the approved volume. The following conditions also apply: ------------------------------------------------------------------------
(1) We assign an eligible We will not change Production from the
lease to your authorized your authorized assigned eligible
field after we approve field's royalty lease(s) counts
relief, suspension volume toward the royalty
determined under suspension volume
Sec. 203.69, for the authorized
field, but the
eligible lease will
not share any
remaining royalty
suspension volume
for the authorized
field after the
eligible lease has
produced the volume
applicable under 30
CFR 560.114.(2) We assign a pre-Act or We will not change The assigned
post-November 2000 deep your field's lease(s) may share
water lease to your field royalty suspension in any remaining
after we approve your volume, royalty relief by
application, filing the short-
form application
specified in Sec.
203.83 and
authorized in Sec.
203.82. An
assigned RS lease
also gets any
portion of its
royalty suspension
volume remaining
even after the
field has produced
the approved relief
volume.(3) We assign another lease In our evaluation of (i) You toll the
that you operate to your your authorized time period for
field while we are field, we will take evaluation until
evaluating your into account the you modify your
application, value of any application to be
royalty relief the consistent with the
added lease already newly constituted
has under 30 CFR field;
560.114 or its (ii) We have an
lease document. If additional 60 days
we find your to review the new
authorized field information; and
still needs (iii) The assigned
additional royalty pre-Act lease or
suspension volume, royalty suspension
that volume will be lease shares the
at least the royalty suspension
combined royalty we grant to the
suspension volume newly constituted
to which all added field. An eligible
leases on the field lease does not
are entitled, or share the royalty
the minimum suspension we grant
suspension volume to the new field.
of the authorized If you do not agree
field, whichever is to toll, we will
greater, have to reject your
application due to
incomplete
information.
Production from an
assigned eligible
lease counts toward
the royalty
suspension volume
that we grant under
Sec. 203.69 for
your authorized
field, but you will
not owe royalty on
production from the
eligible lease
until it has
produced the volume
applicable under 30
CFR 560.114.
(4) We assign another We will change your (i) You both toll
operator's lease to your field's minimum the time period for
field while we are suspension volume evaluation until
evaluating your provided the both of you modify
application, assigned lease your application to
joins the be consistent with
application and is the new field;
entitled to a (ii) We have an
larger minimum additional 60 days
suspension volume, to review the new
information; and
(iii) The assigned
lease(s) shares the
royalty suspension
we grant to the new
field. If you (the
original applicant)
do not agree to
toll, the other
operator's lease
retains any
suspension volume
it has or may share
in any relief that
we grant by filing
the short form
application
specified in Sec.
203.83 and
authorized in Sec.
203.82.(5) We reassign a well on a The past production For any field based
pre-Act, eligible, or from the well relief, the past
royalty suspension lease counts toward the production for that
from field A to field B, royalty suspension well will not count
volume that we toward any royalty
grant under Sec. suspension volume
203.69 to field B, that we grant under
Sec. 203.69 to
field A. Moreover,
past production
from that well will
count toward the
royalty suspension
volume applicable
for the lease under
30 CFR 560.114 if
the well is on an
eligible lease or
under 30 CFR
560.124 if the well
is on a royalty
suspension lease.------------------------------------------------------------------------
(b) When a project has more than one lease, the royalty suspension volume for each lease equals that lease's actual production from the project (or production allocated under an approved unit agreement) until total production for all leases in the project equals the project's approved royalty suspension volume.
(c) You may receive a royalty-suspension volume only if your entire lease is west of 87 degrees, 30 minutes West longitude. If the field lies on both sides of this meridian, only leases located entirely west of the meridian will receive a royalty-suspension volume.