30 CFR § 203.42 - What conditions and limitations apply to royalty relief for deep wells and phase 1 ultra-deep wells?
§ 203.42 What conditions and limitations apply to royalty relief for deep wells and phase 1 ultra- deep wells?
The conditions and limitations in the following table apply to royalty relief under § 203.41.
|If . . .||Then . . .|
|(a) Your lease has produced gas or oil from a well with a perforated interval the top of which is 18,000 feet TVD SS or deeper,||your lease cannot earn an RSV under
|(b) You determine RSV under
||that determination establishes the total RSV available for that drilling depth interval on your lease (
|(c) A qualified deep well or qualified phase 1 ultra-deep well on your lease is within a unitized portion of your lease,||the RSV earned by that well under
|(d) Your qualified deep well or qualified phase 1 ultra-deep well is a directional well (either an original well or a sidetrack) drilled across a lease line,||the lease with the perforated interval that initially produces earns the RSV. However, if the perforated interval crosses a lease line, the lease where the surface of the well is located earns the RSV.|
|(e) You earn an RSV under
||that RSV is in addition to any RSS for your lease under
|(f) Your lease earns an RSV under
||the RSV is not forfeited or terminated, but you may not apply the RSV under
|(g) You qualify for an RSV under paragraphs (b) or (c) of
||you still owe minimum royalties or rentals in accordance with your lease terms.|
|(h) You transfer your lease,||unused RSVs transfer to a successor lessee and expire with the lease.|
Example to paragraph (b):
If your first qualified deep well is a sidetrack with a perforated interval whose top is 16,000 feet TVD SS and earns an RSV of 12.5 BCF, and you later drill a qualified original deep well to 17,000 feet TVD SS, the RSV for your lease remains at 12.5 BCF and does not increase to 15 BCF. However, under paragraph (c) of § 203.41, if you subsequently drill a qualified deep well to a depth of 18,000 feet or greater TVD SS, you may earn an additional RSV.