Title 11 . Natural Resources

Chapter 83 . (No Regulations Filed)

Section 245. Reporting and payment requirements

11 AAC 83.245. Reporting and payment requirements

(a) For each NPSL not in commercial production, each lessee shall file an annual report within 90 days following the end of each calendar year on forms prescribed by the department. Where two or more lessees hold a working interest in the same NPSL, they may, with the consent of the commissioner, appoint a designated operator of that NPSL to be responsible for the above reporting requirements.

(b) Once commercial production commences, each lessee shall file a report on forms prescribed by the department, together with the appropriate payment due the state on each NPSL, not later than 60 days following the end of each month during production. If the due date falls on a Saturday, Sunday or holiday, the report is due on the next business day. The report must contain the following information:

(1) the volume and dispositions of all oil and gas production saved, removed or sold for the production period;

(2) the value of oil or gas removed or sold;

(3) the amount and description of items in the NPSL accounts as defined in 11 AAC 83.209 - 11 AAC 83.214 and the balance of the accounts for the month; and

(4) the monthly profit share of the lessee and the monthly net profit payment due the state.

(c) Repealed 8/15/82.

(d) Interest will be charged at a variable rate per year equal to the prime rate as announced from time to time by the Bank of America, San Francisco, California, plus 1.25 percent a year on the amount of the net profit share payment due the state from the due date of the net profit share payment until the payment is received by the state.

(e) Records pertaining to development costs incurred before the start of commercial production, which are not included in reports filed under (b) of this section, must be kept and maintained for four years after the expiration of the calendar year in which commercial production begins or until abandonment of the lease if no commercial production begins. Records of the information required in (b) of this section, including a lessee's standard or joint accounting system records, must be kept and maintained for six years after the expiration of the calendar year in which the reports were filed with the state under (b) of this section. However, records of information required in (b) of this section, including standard or joint accounting system records, relating to abandonment cost amortization, must be kept and maintained from the date of issuance of the lease until three years following abandonment of the lease. Upon request by the state, the lessee shall make all records required by this section available for inspection and copying by authorized representatives of the state during normal business hours.

(f) Upon notice to the lessee, the state has the authority to audit the lessee's records of financial transactions, including the lessee's standard or joint accounting system records, inventories and other records pertaining to net profit share leasing operations. The audit period will remain open for the same period of time as specified in (e) of this section for record retention. If the commissioner determines there has been a showing of fraud or misrepresentation, then the audit period will remain open. Where possible, the auditor for the state will coordinate audit efforts with any other non-operators.

History: Eff. 11/9/79, Register 72; am 8/15/82, Register 83

Authority: AS 38.05.020

AS 38.05.180