1. Reference & Reporting Management OGOR Reporting & ecommerce update
Lee-Ann Martin, Program Manager
Lydia Barder, Manager
PASO February 2019

2. Disclaimer
The statements or opinions expressed in all ONRR presentations and panel discussions at the 2019 PASO-Tulsa Federal/Indian Royalty Compliance Workshop do not necessarily represent the views of ONRR or the Department of the Interior.

3. RRM’s Mission & Functions
RRM is the foundation of accurate data for which all other processes rely upon to achieve ONRR’s mission.
Functions:
Collects, establishes, and manages Federal and Indian mineral leases, agreements, logical mining units (LMUs), mines, wells, and facility measurement points (FMPs) to support accurate royalty and production reporting operations.
Ensures that production and royalty reporters have the knowledge and information necessary to fulfill their reporting requirements according to current regulations.
Receives royalty and production reports.
Resolves reporting exceptions and researches anomalies.
Ensures various electronic ONRR reporting forms, such as the ONRR-2014, OGOR, PASR, P&R, EMARF, and Solids Sales Summaries and Facility reports remain current.

4. eCommerce – 2014 & OGOR eCommerce Edits
Question: What front-end edits will be dropped during the next year?
Answer: At this time, RRM anticipates that no front-end edits will be dropped this year; however, we are always evaluating the reporting edits.
Question: What front-end edits will be added?
Answer: None at this time; however, we are always evaluating the reporting to determine the need for additional or refined edits.

5. eCommerce - 2014 Question: Can we get a list of errors and warnings?
Form ONRR-2014 edits are located at:

6. eCommerce
Question: Sometimes transportation and processing deductions are reported exactly at 50%, but the digits beyond the second digit (the number of decimals on the ONRR-2014 report) may be > 0 causing an error message during validation stating that we have overreported the deduct. How many decimal points out does eCommerce look in it’s validation process? Is it possible to limit it to the two decimals shown on the report?
Answer: eCommerce validation looks at two decimal places. If you are receiving an error, please contact your Royalty Analyst for guidance.

7. eCommerce
Question: What product code should we use to report LNG royalties?
Answer: Product code 03 should be used to report LNG royalties.

8. eCommerce - OGOR Question: Can we get a list of errors and warnings?
OGOR edits

9. eCommerce - OGOR
Question: With increased OGOR line counts, does ONRR anticipate any problems with eCommerce handling the volume?
Answer: There will be no impact to eCommerce being able to handle the increase in lines.

10. Reference Related Questions
Question: Can ONRR give an example of ONRR calculations for a CA overlapping a PA?  (Also involves the new IM ).  The example should include at least one federal lease in the PA and one in the CA. 
Let’s start with a basic overview:
An Agreement Overlap is when land of any type (Federal, Indian, Fee or State) is in more than one agreement and in the same formation and is overlapping each other.
Partial Overlap – CA is partially within the Agreement
OGORs - Each Agreement will report it’s own Production.
2014s - CA production allocated to the overlapped portion of the CA is then reallocated to the Overlapped Agreement (PA) in accordance with that Agreement’s allocation schedule.

11. CA/PA Overlap Simple Example
Tract 1 = 50%
Tract 2 = 50%
200 Bbls from CA2
Tr 1 = 100 Bbls
Tr 2 = 100 Bbls
CA 2
Tract 1 = 25%
Tract 4 = 25%
Tract 3 = 25%
Tract 2 = 25%
800 Bbls
produced & sold
Tr 1 = 200 Bbls to PA1
Tr 2 = 200 Bbls
Tr 3 = 200 Bbls
Tr 4 = 200 Bbls
Here’s an example showing a Partial Overlap. The New Agreement (CA 2) overlapping an existing Agreement (CA 1).
In this example CA 2 produced 800 barrels, this production is then allocated to each Tract of CA 2. CA 2 has 4 tracts each receiving 25% of the production, 200 barrels each.
CA 2’s tract 1 overlaps CA 1’s tract 2. Tract 1’s 200 barrels are now reported on CA 1 and are broken down by it’s allocation schedule. CA 1 has 2 tracts with an allocation of 50% each. The 200 barrels are now reallocated based on CA 1’s allocation schedule so that each tract is getting 100 barrels.

12. So how does it work?
Here’s an example showing a Partial Overlap. The New Agreement (CA 2) is overlapping an existing Agreement (PA 1).
In this example, CA 2 produced 800 barrels, this production is then allocated to each Tract of CA 2. CA 2 has 4 tracts each receiving 25% of the production, 200 barrels each.
CA 2’s tract 1 overlaps PA 1’s tract 2. Tract 1’s 200 barrels are now reported on PA 1 and are broken down by it’s allocation schedule. PA 1 has 2 tracts with an allocation of 50% each. The 200 barrels are now reallocated based on PA 1’s allocation schedule so that each tract is getting 100 barrels.

13. Reference Related Questions
Question: Once CAs are approved, it can take ONRR several weeks to several months to have setups on their end to accept payment, but royalties are due within 30 days of the CA approval letter. What process does ONRR have in place to account for the setup delay in terms of delaying penalties and interest?
Please contact me or see me during a break. We are currently up to date with all CAs that are in a producing status.

14. Cross-lease Netting and Interest
Question: How can companies ensure ONRR’s system properly handles cross-lease netting for interest calculations?
Answer:  In order to ensure Cross Lease Netting (CLN) is properly handled in the system, ONRR recommends that the companies submit the CLN reporting in a separate report, not to be combined with their standard monthly reporting. It is also beneficial to inform their Financial Service accountant of the CLN situations (listing provided on ONRR.gov under Payments), to include the leases involved and the corresponding PAD. 

15. System
Question: What is the status of the Identity Access Management System, specifically the ability to add/delete users and change contact information?
Answer: The Identity Access Management (IAM) System is technically in place. With the change of administration, regulations to support the processes that were associated with IAM were put on hold and a number of priorities delayed the rollout. ONRR anticipates being able to rollout the use of IAM this summer.
Question: When will States auditing on behalf of ONRR be able to view reports in eCommerce?
Answer: States and Tribes are in the process of getting trained on using eCommerce. With their access they will have the same access to reports as ONRR’s auditors and Minerals Revenue Specialists.

16. BLM Related Issues
ONRR expects industry to pay the full 1/8 royalty to the BLM assigned tract until such time as each CA is approved. This presents several issues, including a payment of interest which cannot be recovered (due to the amendment to FOGRMA in the 12/5/15 FAST act), as well as large outlays of chase to pay “phantom royalties.” In a depressed pricing environment, it will be difficult to recover quickly once agreements are signed. What is ONRR and the BLM doing to alleviate this problem?
When sliding-scale royalties are involved, companies sometimes must make out of pocket entries until a CA is approved. After approval of the CA, what part of that reporting is assessed interest? Is it back to 1st sales? If so, why?

17. BLM Related Issues
Answer: ONRR can only enter into the reference database system APPROVED CAs. Until there is an approved CA, industry must pay at the lease level. Once a CA has been approved, industry should reverse/rebook the lines originally reported at the lease level, re-report at the agreement level based upon the allocation schedule AND make sure to use Adjustment Reason Code (ARC) 35.
Late payment interest charges will not be assessed due to the formation, expansion, contraction, or termination of a Unit or Communization Agreement so long as lump-sum retroactive royalties are received, by ONRR, by the end of the month following the month of approval by BLM, BIA, or BSEE. You may use ARC 35 one time per the event referenced above. Interest will be calculated from the end of the next month following the approval date of the letter from BLM, BIA, or BSEE if not reported/paid timely.

18. Dear Reporter Letter Flaring and Venting Reporting
Issued April 9, 2018
Subject: Reporting requirements for reporting flared and vented gas volumes on the Oil and Gas Operations Report (OGOR), Form ONRR-4054
Notified reporters of a change in OGOR reporting for royalty-bearing flared and vented gas volumes on the OGOR

19. OGOR: Royalty-bearing Flaring and Venting
OGOR-B Disposition Codes (DC) for royalty-bearing flared and vented gas:
Flared gas – royalty due = DC 33
Vented gas – royalty due = DC 63
DCs 33 and 63 must be used effective production month July 2018, but can also be used for prior periods

20. OGOR: Non-royalty-bearing Flaring and Venting
OGOR-B Disposition Codes (DC) for non-royalty-bearing flared and vented gas:
Flared oil-well gas – royalty not due = DC 21
Flared gas-well gas – royalty not due = DC 22
Vented oil-well gas – royalty not due = DC 61
Vented gas-well gas – royalty not due = DC 62

21. ONRR-2014: Royalty-bearing Flaring and Venting
Royalty Reporting on the Report of Sales and Royalty Remittance, Form ONRR-2014:
Transaction Code 01 – Royalty Due: Report royalties due in value on producing Federal and Indian leases
Product Code 16 – Gas lost – flared or vented

22. BLM Related Issues
What is the status on reporting new BLM FMP numbers on the OGOR?
How will ONRR’s system handle oil inventories maintained at a lower level resulting in the ending inventory from the prior month now split to multiple “beginning inventory” FMP numbers?

23. Contact Information
Lee-Ann Martin, Program Manager RRM or
Royalty Contacts:
Production Contacts:
Reference Contacts: