Current through Register Vol. 41, No. 25, June 23, 2022
For purposes of this regulation, the following definitions shall apply:
"Commission" shall be defined as
specified in K.A.R. 81-1-1
. However, the term shall not include any interest in
the oil and gas estate being sold, including any overriding royalty interest
and any interest in the production from the oil and gas estate, if the identity
of the person or persons owning or holding the interest and the extent of the
interest are fully disclosed to all purchasers.
(2) "Public auction" means the public sale of
an interest in an oil and gas royalty, lease, or mineral deed to the highest
bidder when the offer of the interest and the bids are communicated through
open, public outcry and the sale is complete when the auctioneer so announces
by the fall of the hammer or other customary manner.
(3) "Purchaser" means any individual,
corporation, limited liability company, partnership, association, joint stock
company, trust, or unincorporated organization. However, if an entity was
organized for the specific purpose of acquiring the oil or gas interests
offered, each beneficial owner of an equity interest or equity security in the
entity shall count as a separate purchaser.
Oil and gas transactions.
K.S.A. 17-12a301 through 17-12a306 and
K.S.A. 17-12a401, 17-12a402, and 17-12a504, and amendments thereto, shall not
apply to any offer or sale of any limited partnership interest, fractional
undivided interest, or certificate based upon any fractional undivided interest
involving any oil or gas royalty, lease, or deed, including subsurface gas
storage and payments out of production, if the land subject to the interest or
certificate is located in Kansas and all sales are made in accordance with one
of the following conditions:
(A) Each sale is
made to a person who is or has been during the preceding two years engaged
primarily in the business of drilling for, producing, or refining oil or gas or
whose corporate predecessor, for a corporation, has been so engaged or whose
officers and two-thirds of the directors, for a corporation having an existence
of less than two years, have each been so engaged.
(B) Sales are made to not more than a total
of 32 purchasers without regard to whether the purchasers reside within or
without the state of Kansas; the seller reasonably believes that every
purchaser is purchasing the interest or certificate for investment purposes and
not for resale; no general solicitation is used in connection with the offer or
sale of the interest or certificate to any person; and no commission is paid or
given for the offer or sale of the interest or certificate or the solicitation
of prospective purchasers.
Each sale involves property that produces oil, gas, or petroleum products in
paying quantities on the date of sale, and the seller, after the sale, does not
retain any ownership interest in or control over the lease or the interest or
interests that are being sold.
(2) The exemption provided by this subsection
shall not be cumulative to or used in conjunction with any other exemption
provided under K.S.A. 17-12a202, and amendments thereto.
(c) Oil and gas auctions. The offer and sale
of any interest in an oil and gas royalty, lease, or mineral deed shall be
exempt from the requirements of K.S.A. 17-12a301 through 17-12a306 and K.S.A.
17-12a401, 17-12a402, and 17-12a504, and amendments thereto, if the interest is
sold at a public auction.
Kan. Admin. Regs. § 81-5-10
Authorized by K.S.A. 2005
Supp. 17-12a605(a); implementing K.S.A. 2005 Supp. 17-12a203; effective June
28, 1993; amended Jan. 19, 2007.