256.40—Definitions.

The following definitions apply to §§ 256.38 through 256.44 of this part.
(a) Single bid means a bid submitted by one person for an oil and gas lease under section 8(a) of the Act.
(b) Joint bid means a bid submitted by two or more persons for an oil and gas lease under section 8(a) of the Act.
(c) Average daily production is the total of all production in an applicable production period which is chargeable under § 256.43 of this title divided by the exact number of calendar days in the applicable production period.
(d) Barrel means 42 U.S. gallons.
(e) Crude oil means a mixture of liquid hydrocarbons including condensate that exists in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities, but does not include liquid hydrocarbons produced from tar sand, gilsonite, oil shale, or coal.
(f) An economic interest means any right to, or any right dependent upon, production of crude oil, natural gas, or liquefied petroleum products and shall include, but not be limited to, a royalty interest, or overriding royalty interest, whether payable in cash or in kind, a working interest, a net profits interest, a production payment, or a carried interest.
(g) Liquefied petroleum products means natural gas liquid products including the following: ethane, propane, butane, pentane, natural gasoline, and other natural gas products recovered by a process of absorption, adsorption, compression, or refrigeration cycling, or a combination of such processes.
(h) Natural gas means a mixture of hydrocarbons and varying quantities of nonhydrocarbons that exist in the gaseous phase.
(i) Oil and gas lease means an oil and gas lease either offered or issued pursuant to the provisions of the Act.
(j) Owned means:
(1) With respect to crude oil— having either an economic interest in or a power of disposition over the production of crude oil;
(2) With respect to natural gas— having either an economic interest in or a power of disposition over the production of natural gas; and
(3) With respect to liquefied petroleum products— having either an economic interest in or a power of disposition over any liquefied petroleum product at the time of completion of the liquefaction process.
(k) Prior production period means the continuous six month period of January 1 through June 30 preceding November 1 through April 30 for joint bids submitted during the six month bidding period from November 1 through April 30, and means the continuous six month period of July 1 through December 31 preceding May 1 through October 31 for joint bids submitted during the six month bidding period from May 1 through October 31.
(l) Production— (1) Of crude oil means the volume of crude oil produced worldwide from reservoirs during the prior production period. The amount of such crude oil production shall be established by measurement of volumes delivered at the point of custody transfer (e.g., from storage tanks to pipelines, trucks, tankers, or other media for transport to refineries or terminals) with adjustments for:
(i) Net differences between opening and closing inventories, and
(ii) Basic sediment and water;
(2) Of natural gas means the volume of natural gas produced worldwide from natural oil and gas reservoirs during the prior production period, with adjustments, where applicable, to reflect
(i) The volume of gas returned to natural reservoirs; and
(ii) The reduction of volume resulting from the removal of natural gas liquids and nonhydrocarbon gases.
(3) Of liquefied petroleum products means the volume of natural gas liquids produced from reservoir gas and liquefied at surface separators, field facilities, or gas processing plants worldwide during the prior production period; these liquefied petroleum products include the following:
(i) Condensate— natural gas liquids recovered from gas well gas (associated and non-associated) in separators or field facilities;
(ii) Gas plant products— natural gas liquids recovered from natural gas in gas processing plants and from field facilities. Gas plant products shall include the following as classified according to the standards of the Natural Gas Processors Association (NGPA) or the American Society for Testing and Materials (ASTM):
(A) Ethane—C2 H6
(B) Propane—C3 H8
(C) Butane—C4 H10 including all products covered by NGPA specifications for commercial butane.
(1) Isobutane,
(2) Normal butane,
(3) Other butanes—all butanes not included as isobutane or normal butane;
(D) Butane-Propane Mixtures—All products covered by NGPA specifications for butane-propane mixtures;
(E) Natural Gasoline—A mixture of hydrocarbons extracted from natural gas, which meet vapor pressure, end point, and other specifications for natural gasoline set by NGPA;
(F) Plant Condensate—A natural gas plant product recovered and separated as a liquid at gas inlet separators or scrubbers in processing plants or field facilities; and
(G) Other Natural Gas Plant Products meeting refined product standards (i.e., gasoline, kerosene, distillate, etc.).
(m) Six month bidding period means the six month period of time
(1) From May 1 through October 31; or
(2) From November 1 through April 30, respectively.

Code of Federal Regulations

[44 FR 38276, June 29, 1979; 44 FR 55380, Sept. 26, 1979. Redesignated at 47 FR 47006, Oct. 22, 1982, as amended at 66 FR 11518, Feb. 23, 2001]