Company: OKMN
Filing Date: 2025-09-29
Form Type: 10-K
Source: 0001079973-25-001512
Chunk: 4

Company: OKMIN RESOURCES, INC.
Filing Date: 2025-09-29
Form: 10-K
Item: Item 1
Chunk 4
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 such wells. The effect of these regulations is to limit the amount of oil and natural gas that we can produce from our wells and to
limit the number of wells or the locations at which we can drill. Moreover, many states impose a production or severance tax with respect
to the production and sale of oil, natural gas and natural gas liquids within their jurisdictions. Failure to comply with any such rules
and regulations can result in substantial penalties. The regulatory burden on the oil and natural gas industry will most likely increase
our cost of doing business and may affect our profitability. Because such rules and regulations are frequently amended or reinterpreted,
we are unable to predict the future cost or impact of complying with such laws. Significant expenditures may be required to comply with
governmental laws and regulations and may have a material adverse effect on our financial condition and results of operations. Additionally,
currently unforeseen environmental incidents may occur or past non-compliance with environmental laws or regulations may be discovered.
Therefore, we are unable to predict the future costs or impact of compliance. Additional proposals and proceedings that affect the oil
and natural gas industry are regularly considered by Congress, the states, the Federal Energy Regulatory Commission (“FERC”)
and the courts. We cannot predict when or whether any such proposals may become effective.

3 

Regulation of Transportation of Oil

Sales of crude oil, condensate and natural gas liquids
are not currently regulated and are made at negotiated prices. Nevertheless, Congress could re-enact price controls in the future. Our
sales of crude oil are affected by the availability, terms and cost of transportation. The transportation of oil by common carrier pipelines
is also subject to rate and access regulation. The FERC regulates interstate oil pipeline transportation rates under the Interstate Commerce
Act. In general, interstate oil pipeline rates must be cost-based, although settlement rates agreed to by all shippers are permitted and
market-based rates may be permitted in certain circumstances. Effective January 1, 1995, the FERC implemented regulations establishing
an indexing system (based on inflation) for transportation rates for oil pipelines that allows a pipeline to increase its rates annually
up to a prescribed ceiling, without making a cost-of-service filing. Every five years, the FERC reviews the appropriateness of the index
level in relation to changes in industry costs.

Intrastate oil pipeline transportation rates are subject
to regulation by state regulatory commissions. The basis for intrastate oil pipeline regulation and the degree of regulatory oversight
and scrutiny given to