Empower Your Business with Morris Miller Webinars
ONRR Regulatory Requirements for Unbundling Systems and Plants
Understanding Standardized and Plant-Specific Unbundling Cost Allocations
Understanding Standardized and Plant-Specific Unbundling Cost Allocations
Study the Marketable Condition Rule where gas must meet pipeline specifications (pressure, CO₂, H₂S, H₂O) before claiming cost deductions, with lessees bearing the burden of proof. Review how unbundling requires separating allowed costs (e.g., residue gas transport, NGL fractionation) from disallowed expenses (e.g., initial dehydration, CO₂ removal). Learn about how the key requirements of cost allocation, allowance caps, and contract types play a role in unbundling. Discover the compliance tools of process flow diagrams, Form ONRR-2014, and disallowed costs.
Understanding Standardized and Plant-Specific Unbundling Cost Allocations
Understanding Standardized and Plant-Specific Unbundling Cost Allocations
Understanding Standardized and Plant-Specific Unbundling Cost Allocations
Learn how the ONRR's Standardized UCAs offer pre-approved cost splits by geographic regions or processing technologies using simplified royalty reporting. These apply to facilities lacking custom methodologies and include allowances for common cost structures. Plant-specific UCAs, developed for approx. 25 facilities provide tailored cost splits based on actual equipment, fuel use, and compliance milestones. Transportation allowances and processing deductions must align with UCA-approved splits and validated with ONRR-2014 reporting.
Process of Unbundling a System or Plant
Understanding Standardized and Plant-Specific Unbundling Cost Allocations
Process of Unbundling a System or Plant
Discover how to unbundle a system or plant by identifying marketable conditions and determining where gas meets pipeline specs (pressure, CO₂, H₂S, H₂O). Learn how to separate transportation and processing fees, distinguishing allowed costs (e.g., residue gas transport, NGL fractionation) from disallowed expenses (e.g., initial dehydration, CO₂ removal). Review the Standardized UCAs, process diagrams, and ONRR’s unbundling guidelines used in the process.
ONRR Valuation & Pricing of Allowances Against Royalty Value
Specific Transportation System and Gas Plant Unbundling Cost Allocations
Specific Transportation System and Gas Plant Unbundling Cost Allocations
The ONRR royalty equation calculates deductions and allowances for reasonable transportation/processing costs (e.g., residue gas transport, NGL fractionation), but exclude gathering or pre-marketable condition expenses. Understand transportation and processing allowances for gas plant products. Learn the valuation methods depend on contract type: Arm’s-length sales use gross proceeds calculations, and Non-arm’s-length transactions use actual cost documentation.
Specific Transportation System and Gas Plant Unbundling Cost Allocations
Specific Transportation System and Gas Plant Unbundling Cost Allocations
Specific Transportation System and Gas Plant Unbundling Cost Allocations
Discuss the key features of Specific Transportation Systems (STS) and Gas Plants, including transportation, processing, and compliance. Understand how movement from the central accumulation point (CAP) to processing plants or beyond, including compression, dehydration, and sweetening to meet pipeline specs. Review the way facilities process gas to extract NGLs, often including compression, sweetening, and boosting compression.
How to Determine Marketable Conditions for ONRR Values in Natural Gas
Specific Transportation System and Gas Plant Unbundling Cost Allocations
How to Determine Marketable Conditions for ONRR Values in Natural Gas
Learn how to determine the Marketable Conditions for ONRR values in natural gas transportation systems. Identify the mainline pipeline specifications downstream from the processing facilities. These specifications define the required gas quality and pressure for acceptance into the pipeline network. Review each requirements for pressure, CO2, H2S, and H2O, and some mainlines might also have a "total acid gas" or "total inert gas"specification.
COPAS 2025 Spring Meeting, Rogers, AR
Morris Miller presents Understanding the ONRR's Unbundling Process
Council of Petroleum Association Societies Revenue Standing Committee
Spring 2025 Meeting
Tuesday, April 22 - Friday, April 25, 2025
Hosted by:
Petroleum Accountants Society of Oklahoma-Tulsa and
Petroleum Accountants Society of Arkansas
Embassy Suites Northwest Arkansas Hotel, Spa & Convention Center
3303 Pinnacle Hill Parkway, Rogers, AR 12758
Morris Miller presents Understanding the ONRR's Unbundling Process
Thursday, April 24
This presentation provides a comprehensive overview of Office of Natural Resources Revenue (ONRR) regulatory requirements for unbundling gas transportation and processing costs, focusing on identifying allowable component expenses and compliance strategies. Participants will learn to differentiate between arm’s-length and non-arm’s-length service contracts, apply methodologies for separating allowed and disallowed costs (e.g., compression, dehydration), and evaluate Standardized or Plant-Specific Unbundling Cost Allocations (UCAs).
Key topics include determining Marketable Condition Requirements (MCR)—ensuring gas meets quality standards for sale without undue costs to the government—and practical steps to unbundle systems or plants, such as analyzing facility data, allocating costs across products, and submitting UCAs for ONRR approval. We will review real-world examples like the Southern Star Tariff to illustrate transportation cost allocations and highlights publicly available resources, including ONRR guidance documents and training materials, to streamline compliance. By integrating regulatory frameworks with hands-on exercises, participants will enhance their ability to optimize royalty calculations, resolve audit disputes, and navigate evolving federal reporting standards.
