Classifying Producing and Non-Producing Oil and Gas Leases

UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
http://www.blm.gov

July 10, 2009

In Reply Refer To:
3100 (310) P

EMS TRANSMISSION 07/16/2009
Instruction Memorandum No. 2009-175
Expires: 09/30/2010

To: All State Directors and Director of National Operations Center

From: Assistant Director, Minerals and Realty Management

Subject: Classifying Producing and Non-Producing Oil and Gas Leases

Program Area: Oil and gas leasing.

Purpose: The purpose of this Instruction Memorandum (IM) is to implement changes in how the Bureau of Land Management (BLM) classifies oil and gas leases as producing or non-producing.

Policy/Action: The BLM will now classify oil and gas leases as “producing” if a lease is held by actual or allocated production. Previously, the BLM classified leases as “producible” if they were held by actual or allocated production, or if the lease was held by location in a producing unit. In all future reports, including Public Land Statistics, the BLM will replace the term “producible leases” with the term “producing leases.”

Within BLM’s Legacy Rehost 2000 (LR2000), action codes 650 and 651 are to be considered as the only production codes. Action code 653 is still to be used, where appropriate and as set out in the BLM data standards and existing BLM handbook guidance. However, a lease with action code 653 is not now considered to be producing.

All reports, including standard queries in the LR2000, are to be modified to reflect this change.

Timeframe: Implement immediately.

Budget Impact: None.

Background: The Office of the Inspector General (OIG) recently recommended that the BLM and the Minerals Management Service (MMS) coordinate the reporting of producing and non-
producing lease data to include adopting standard and consistent terminology (C-EV-MOA-0009-2008: Oil and Gas Production on Federal Leases: No Simple Answer, February 2009). The BLM agreed to make this minor change to how producing and non-producing leases are classified, consistent with the standard and terminology used by the MMS. This change has already been adopted informally by the Washington Office Division of Fluid Minerals and the National Applications staff at the National Operations Center (NOC).

Manual/Handbook Sections Affected: These procedures will be incorporated into the BLM Manual 3107 and BLM Handbook H-3107-1 when they are next updated. The specific handbook section affected by this IM is H-3107-1, Appendix 3.

Coordination: The BLM response to the referenced OIG evaluation, which is being implemented by this IM, was developed in coordination with the MMS and the NOC.

Contact: If you have any questions or concerns, please contact me by telephone at
202-208-4201, or your staff may contact Robyn Shoop, Mineral Leasing Specialist (detail),
by telephone at 202-452-0334, or by e-mail at robyn_shoop@blm.gov.

Signed by: Authenticated by:
Timothy R. Spisak Robert M. Williams
Acting, Assistant Director Division of IRM Governance,WO-560
Minerals and Realty Management