U.S. DEPARTMENT OF THE INTERIORBUREAU OF LAND MANAGEMENT
UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
WASHINGTON, D.C. 20240
February 1, 2008
In Reply Refer To:
3100 (310) P
EMS TRANSMISSION 02/19/2008
Instruction Memorandum No. 2008-067
To: All Field Officials
From: Assistant Director, Minerals, Realty and Resource Protection
Subject: Processing Oil and Gas Lessee Merger and Name Change Recognitions
Program Area: Oil and gas adjudication.
Purpose: This instruction memorandum (IM) provides guidance for consistency, timeliness, and accuracy in processing merger and name change recognitions. This guidance also relates to bond adequacy reviews.
Policy/Action: The office of record for the surviving entity’s bond will process any merger or name change. Specific guidance is contained in Attachment 1. The Bureau of Land Management (BLM) records will be updated consistent with existing data standards within 10 working days of merger or name change recognition. Leases and operations affected by the merger or name change will be reviewed for bond adequacy, as needed, by the field offices.
Timeframe: This guidance is effective immediately.
Budget Impact: There is no impact on the budget.
Background: The BLM provides efficient customer service by allowing lessees to file merger and name change documentation in any state office (SO) for nationwide recognition. Only one SO needs to recognize a merger or name change. Sometimes multiple offices receive such documentation and each office proceeds to recognize it. This leads to inconsistencies in processing the recognition and inaccuracies in LR 2000 Bond & Surety System.
Departmental regulations at 43 CFR 3106.8-2 and 3106.8-3 allow, but do not require, a rider to amend the name on the original bond. The principal’s or obligor’s name automatically changes by operation of law. The BLM records, manual and automated, should always reflect the correct name.
Some SOs recognize mergers and name changes without a rider, but fail to change the automated bond system. When this happens, other offices cannot determine if the new or surviving entity has bond coverage. Applications for Permit to Drill and other on the ground activities cannot be approved without adequate bond coverage.
Following a merger, the surviving entity may file a replacement bond or an assumption of liability rider to assume liabilities from multiple bonds maintained by the merging parties. Some offices are not posting this information on the automated system or otherwise alerting offices to transfer liabilities to the replacement bond.
Merger is an appropriate time to review bond adequacy. Do not terminate the period of liability for any bond in a merged entity’s name until adequate bonding is in place for the surviving entity.
Manual /Handbook Sections Affected: This guidance will be included inthe BLM Handbook H-3106-1 –Transfers by Assignment, Sublease, or Otherwise, when it is next updated.
Coordination: The principal authors of this IM and the attached procedures were Elaine Kaufman and Joan Seibert of the Montana State Office, with review, comment and revisions by the Washington Office Fluid Minerals Division (WO-310) and other SOs.
Contact: If you have questions or concerns, please contact me at 202-208-4201, or your staff may contact Greg Shoop (WO-310), by telephone at (202) 452-0334, or by electronic mail at Gregory_Shoop@blm.gov, or Mary Nagel (WO-310D), by telephone at 303-236-0837, or by electronic mail at Mary_Nagel@blm.gov.
|Last updated: 10-21-2009|
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