Unbundling Cost Allocations

If lessees choose to take allowances against their federal gas gross proceeds, they (not ONRR) must unbundle those allowances. ONRR provides UCAs as a courtesy, and your use of a UCA does not limit ONRR’s right to require strict compliance with ONRR regulations and to audit.

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. 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. 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.

ONRR calculates the Unbundling Cost Allocations (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) and 1206.158 (processing allowances). 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.