1. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior ONRR System Upgrades and Reporting Changes Robert F. Prael Program Manager, Financial Management Industry Compliance Accurate Revenues & Data Professionalism & Integrity Roman Geissel Deputy Program Director, Audit and Compliance Management

2. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Presentation Outline o System Upgrades Interest Online rent CMP-2014 Form ONRR-4444 Access Management o Reporting Changes New product codes Debt Collection 2

3. Office of Natural Resources Revenue (ONRR) One lease, one royalty report received 02/15/2014 $300 paid 02/28/2014 Sales Month 08/2011$1,200Due 09/30/11 Sales Month 09/2011-$900Due 10/31/11 Sales Month 09/2012-$2,000Due 10/31/12 Sales Month 09/2013$2,000Due 10/31/13 Interest 3

4. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Interest – Federal Example 4 Current Interest Calculation Process New Interest Calculation Process Amount Upon Which Interest is Due Amount Upon Which Interest is Paid Time Period Over Which Interest is Paid or Due $1,200Sept 30, 2011 to Oct 31, 2011 Net $300Oct 31, 2011 to Oct 31, 2012 Net $1,700Oct 31, 2012 to Oct 31, 2013 Net $300Oct 31, 2013 to Feb 28, 2014

5. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Interest – Indian Example 5 Current Interest Calculation Process New Interest Calculation Process Amount Upon Which Interest is Due Amount Upon Which Interest is Paid (1% less) Time Period Upon Which Interest is Due or Paid $1,200Sept 30, 2011 to Feb 28, 2014 $0 (not $900)Since Indian, no interest paid $0 (not $2,000)Since Indian, no interest paid $2,000Oct 31, 2013 to Feb 28, 2014 Amount Upon Which Interest is Due Amount Upon Which Interest is Paid Time Period Over Which Interest is Paid or Due $1,200Sept 30, 2011 to Oct 31, 2011 Net $300Oct 31, 2011 to Oct 31, 2012 $0 (not net $1,700) Since Indian, no interest paid Net $300Oct 31, 2013 to Feb 28, 2014

6. Office of Natural Resources Revenue (ONRR) o Most Federal lessees/payors currently pay annual lease rentals to ONRR by paper checks with some rentals reported on Form ONRR- 2014 and some reported via courtesy notices issued by ONRR o Starting in January 2015, the Ecommerce website allows lessees/payors to pay annual lease rentals on-line o The website shows the leases for which the lessee is responsible and: Lease acreage Rental rate Payment status o Payments made through Pay.gov Electronic confirmation o Everything will post in MRMSS No more misapplied checks No more incorrect termination  ONRR is considering eliminating Courtesy Notices in the near future Online Rent 6

7. Office of Natural Resources Revenue (ONRR) o Starting in October 2014, the Ecommerce website http://onrrreporting.onrr.gov provides two options to report: http://onrrreporting.onrr.gov Regular Form ONRR-2014 Compliance Form ONRR-2014 (CMP-2014) o Payors must report all compliance-related royalties using the CMP-2014 o Compliance adjustment reason codes (such as ARC 17) are no longer allowed on the regular Form ONRR-2014 o Eliminates the manual OTH billing process for compliance activities o Interest on CMP-2014s is separate from regular Form ONRR- 2014s, allowing ONRR to track interest bills associated with compliance activities CMP-2014 7

8. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Access Management and Form 4444 8 Form ONRR-4444 o Addressee of Record Designation for Service of Official Correspondence o Industry able to view and update company address and contacts o Ties to EITI Access Management o Industry controlled access management o Industry initiated password reset o Communication will be coming soon to companies requesting an Industry Representative o Person(s) responsible for managing company access o New eMARF process

9. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Reporting Changes 9 New Indian Product Codes o 61 (Sweet) o 62 (Sour) o 63 (Asphaltic) o 64 (Black wax) o 65 (Yellow wax)

10. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Reporting Changes 10 Debt Collection o Automated o 120 versus 180 days

11. Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Contacts: Robert Prael 303-231-3217 Robert.Prael@ONRR.gov 11 Industry Compliance Accurate Revenues & Data Professionalism & Integrity Roman Geissel 303-231-3226 Roman.Geissel@ONRR.gov