CHAPTER 4 THE FUTURE OF ROYALTY VALUATION AND MANAGEMENT IN THE DEPARTMENT OF INTERIOR

• Jurisdiction: United States

Royalty Valuation and Management
(Mar 1988)
CHAPTER 4
THE FUTURE OF ROYALTY VALUATION AND MANAGEMENT IN THE DEPARTMENT OF INTERIOR
James E. Cason
U.S. Department of the Interior
Washington, D.C.

A. Overview of Royalty Management Program (RMP)

1. Statutory direction

2. Lease universe

3. Basic royalty functions

4. Relationship to other Bureaus

5. Fiscal profile

B. RMP systems

1. Auditing and Financial System (AFS)

— System objectives

— Improvement initiatives

2. Production Accounting and Auditing System (PAAS)

— System objectives

— Onshore conversion project

— Production verification roles

3. Bonus and Rental Accounting Support System (BRASS)

— System objectives

C. Product Valuation Regulations

1. Oil & Gas Regulations

a. Basic Principles

— Arms-length contracts measure value

— Constructive flexibility to audit value

— Arms-length vs non-arms-length contracts

— Indian leases

— Gross proceeds

— Allowances

b. Future actions

— Training for new regulations

— Extraordinary cost provisions

2. Coal Regulations

— Anticipated rulemaking process

— Key issues

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