Gross proceeds

Gross proceeds means the total monies and other consideration accruing for the disposition of oil produced. Gross proceeds also include, but are not limited to, the following examples:
(1) Payments for services, such as dehydration, marketing, measurement, or gathering that the lessee must perform—at no cost to the lessor—in order to put the production into marketable condition;
(2) The value of services to put the production into marketable condition, such as salt water disposal, that the lessee normally performs but that the buyer performs on the lessee's behalf
(3) Reimbursements for harboring or terminalling fees;
(4) Tax reimbursements, even though the Indian royalty interest may be exempt from taxation;
(5) Payments made to reduce or buy down the purchase price of oil to be produced in later periods by allocating those payments over the production whose price the payment reduces and including the allocated amounts as proceeds for the production as it occurs; and
(6) Monies and all other consideration to which a seller is contractually or legally entitled but does not seek to collect through reasonable efforts.


30 CFR § 1206.51

Scoping language

For purposes of this subpart:

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