reglab/statecodes huggingface dataset:
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.123.3 - Sales to Appropriate Persons

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) In addition to the objective standards of
						suitability set forth in Section
						260.140.123.2, it will be the
						responsibility of the sponsor and each person selling units to make every
						reasonable effort to see that such securities are an appropriate investment for
						the participants.
(b) Persons
						selling units shall specifically ascertain by means of a writing that the
						offering is appropriate for each participant. In doing so, such persons must
						determine that each participant or his representative has the capacity to
						understand the fundamental aspects of the program.
(c) Persons selling units shall also,
						ascertain by means of a writing that the participants understand (when
						applicable):
(1) the risks involved in the
						offering, including the speculative nature of the investment;
(2) the financial hazards involved in the
						offering, including the risk of losing their entire investment;
(3) the lack of liquidity of units;
(4) the restrictions on transferability of
						units;
(5) the background and
						qualifications of the sponsor and/or the manager or persons responsible for the
						offering; and
(6) the tax
						consequences of the investment.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.123.4 - Maintenance of Suitability Records

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The sponsor shall maintain for a period of at least
						  four years a record of the information obtained to indicate that a participant
						  meets the suitability standards established in connection with the offer and
						  sale of the program units. In addition, he must obtain a representation from
						  each participant that he has purchased units for his own account or, in lieu of
						  such representation, information indicating that the participants for whose
						  account the purchase was made met such suitability standards. Such information
						  may be obtained from the participant through inclusion of such statement in the
						  writing described in Section
						  260.140.123.3 of these rules. If
						  units are sold by a broker-dealer, the sponsor shall obtain a commitment from
						  the broker-dealer to the effect that such broker-dealer will obtain and
						  maintain in its files the record of information which otherwise would have been
						  required of the sponsor.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.123.5 - Minimum Investment

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						The participant is required to make a minimum subscription to the program of at
						least $5,000, except that in the case of an offering being made pursuant to
						Regulation B under the Securities Act of 1933, the minimum subscription for
						pre-completion costs may be $1,500, and except in the case of an offering
						consisting of a series of limited partnerships to be formed during a
						consecutive 12-month period, the minimum subscription may be $5,000 for the
						entire series.
(b) Subsequent
						transfers of such units shall be limited to no less than a minimum unit
						equivalent to an initial minimum subscription except for transfers which do not
						require the Commissioner's consent pursuant to Section
						260.141.11 of these
						rules.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.123.6 - Installment Payments

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						Provisions for deferred payments on account of the purchase price of program
						units may be allowed when warranted by the investment objectives of the
						program, but in any event such arrangements shall be subject to the following
						conditions:
(1) Installment payments,
						subsequent to the initial payment required by the terms of the offering, shall
						be made in not more than 3 payments and the full amount of the purchase price
						shall be paid not later than 9 months after the date on which such programs
						commence operations.
(2) Selling
						commissions payable on the units shall be paid only as and when the allocable
						part of the purchase price is paid by the participant.
(3) Such installments shall be contractually
						binding obligations of the buyer whether or not a promissory note is
						taken.
(4) If a promissory note is
						taken, the program shall not sell or assign it at a
						discount.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.124 - Selling Commissions, Selling Expenses and Offering Costs

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Selling
						expenses of programs are subject to Section
						260.140.20 of these rules and
						should not exceed 15% of the initial subscriptions. Management fees or payments
						for so-called management services are considered as additional promotional
						compensation and ordinarily will not be permitted.
(b) Commissions payable on the sale of
						program units shall be paid in cash based solely on the amount of initial
						subscriptions. Payment of commissions in the form of overriding royalties, net
						profit interests or other interests in production ordinarily will not be
						approved, except that no objection will be raised to the payment of commissions
						in the form of working interests in property of the program, provided the
						amount does not exceed that purchasable by applying the aggregate cash
						commission allowable to the unit offering price.
(c) All items of compensation to underwriters
						or dealers, including but not limited to, selling commissions, expenses, rights
						of first refusal, consulting fees, finders' fees and all other items of
						compensation of any kind or description paid by the program, directly or
						indirectly, shall be taken into consideration in computing the amount of
						allowable selling commissions.
(d)
						As an alternative to the provisions of Subsection (a) above, a sponsor may
						elect to receive twelve and one-half percent (12 1/2%) of the initial
						subscriptions to a program (excluding assessments) provided (i) that all
						selling expenses are paid by the sponsor, and (ii) that the receipt by the
						sponsor of said twelve and one-half percent (12 1/2%) and the payment of all
						selling expenses by the sponsor shall be fully set forth in the prospectus.
						Selling expenses as used in this Subsection means the total underwriting and
						brokerage discounts and commissions (including fees of the underwriters'
						attorneys) paid in connection with the offering and all other expenses actually
						incurred in connection with the offer and sale of the units, including expenses
						for printing, engraving, mailing, salaries of employees while engaged in sales
						activity, charges of transfer agents, registrars, trustees, escrow holders,
						depositaries, and engineers and other experts, expenses of qualification of the
						sale of the securities under Federal and State laws, including taxes and fees,
						accountants' and attorneys' fees.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.125 - Sponsor's Compensation

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The total amount of compensation of all kinds to the
						  sponsor should be reasonable in the light of the nature of the exploration and
						  development proposed, the nature of the services to be provided by the sponsor
						  and the identity of the participants. A landowner's royalty or an overriding
						  royalty or other interests paid to persons unconnected with the program as
						  consideration for the acquisition of properties for the program shall not be
						  deemed to be sponsor's compensation.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.125.1 - Compensation Arrangements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Any form of compensation arrangement that conforms to
						  the following standards shall be considered presumptively reasonable for a
						  sponsor who actively participates in obtaining a significant portion of a
						  program's prospects and who assumes management responsibility for drilling,
						  completing, equipping and operating a significant portion of the program's
						  wells.
(a) Cost and Revenue Sharing.
						The sponsor may elect a compensation arrangement where he shares in revenue on
						a basis related to certain costs paid by him.
(1) Where the sponsor agrees to pay all
						tangible costs of the program but in any case at least 10% of the total
						program's capital contribution, even if the tangible costs otherwise payable
						are less than such 10%, his share of revenue will be determined by the
						following formula:
(A) If the agreement is to
						pay all tangible costs, but in any case a sum of not less than 10% of the
						capital contributions of the program, the sponsor is entitled to receive 35% of
						program revenues;
(B) If the
						agreement is to pay all tangible costs, but in any case a sum of not less than
						15% of the capital contributions of the program, the sponsor is entitled to
						receive 40% of program revenues; and
(C) The sponsor's revenue sharing may be
						increased in additional increments of 5%, for each additional 5% increase in
						the percentage of capital contribution agreed to be paid by him, up to a
						maximum of 50% of revenues, subject to the sponsor's agreement to pay in any
						case all tangible costs.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participant Suitability › Section 260.140.126 - Program Expenses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						All actual and necessary expenses incurred by the program directly may be paid
						by the sponsor out of capital contributions and out of program
						revenues.
(b) A sponsor may be
						reimbursed out of capital contributions and program revenues for all actual and
						necessary direct expenses paid or incurred by it in connection with its
						operation of a program, and for an allocable portion of its general and
						administrative expenses, computed on a cost basis determined by an independent
						public accountant or certified public accountant in accordance with generally
						accepted accounting principles. Administrative and similar services must be
						fully supportable as to the necessity thereof and the reasonableness of the
						amounts proposed to be charged. The prospectus or offering circular shall
						disclose in tabular form an estimate of all such expenses to be charged to the
						program showing separately direct expenses, general and administrative expenses
						(including a separate breakdown for salaries to officers, directors and other
						principals of the sponsor and any affiliate of the sponsor).
(c) Except as may be permitted by Section
						260.140.127.1 of these rules, the
						sponsor may not be reimbursed for any expenses incurred prior to commencement
						of operations of the program or any indirect, general or administrative
						expenses relating to the sale of program units.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Transactions with Affiliates and Conflicts of Interest › Section 260.140.127.2 - Restricted and Prohibited Transactions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Neither the sponsor nor any affiliate
						shall enter into any farm-out or other agreement with the oil program where in
						consideration for services to be rendered, an interest in production is payable
						to such sponsor or affiliate.
(b)
						During the existence of a program and before it has ceased operations neither
						the sponsor nor any affiliate (excluding another program where the interest of
						the sponsor is identical to or less than his interest in the first program)
						shall acquire, retain, or drill for its own account any oil and gas interest on
						any prospect upon which such program possesses an interest, except for sales or
						lease transactions which comply with Subdivision (D) of Section
						260.140.127.1(a)(1)
						of these rules. In the event the program abandons its interest in the prospect,
						this restriction shall continue until one year following the abandonment. If
						the geological limits of a prospect are enlarged to encompass any interest held
						by such sponsor or affiliate, such interest shall be sold to such program in
						accordance with the provisions of Subdivision (C) of Section
						260.140.127.1(a)(1)
						of these rules and any net income previously received by the sponsor or
						affiliate shall be paid over to such program. If within this period, the
						sponsor acquires additional acreage or interest in a prospect of the program,
						he must sell such to the program and is prohibited from retaining any such
						interest, except as may be permitted by Section
						260.140.127.1(a)
						of these rules.
(c) The sponsor
						shall not take any action with respect to the assets or property of the program
						which does not benefit exclusively the program, including among other things:
(1) the utilization of funds of the program
						as compensating balances for his own benefit, and
(2) future commitments of
						production.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Transactions with Affiliates and Conflicts of Interest › Section 260.140.127.3 - Exchange of Units

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The program may not acquire property in exchange for
						  units.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Transactions with Affiliates and Conflicts of Interest › Section 260.140.127.4 - Commingling of Funds

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The funds of a program shall not be commingled with the
						  funds of any other person.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Transactions with Affiliates and Conflicts of Interest › Section 260.140.127.5 - Liability

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Sponsors shall not attempt to pass on to limited
						  partners the general liability imposed on them by law except that the
						  partnership agreement may provide that a general partner (a) may be held
						  harmless and be indemnified by the partnership for any liability or loss
						  suffered by the general partner solely by virtue of his acting as general
						  partner for the partnership in connection with its activities and (b) shall not
						  be liable to the partnership for any loss suffered by it in connection with its
						  activities, provided that if such loss or liability arises out of any action or
						  inaction of the general partner, the general partner must have determined, in
						  good faith, that such course of conduct was in the best interests of the
						  partnership, and such course of conduct must not have constituted gross
						  negligence or gross misconduct by the general partner; and, provided further,
						  that such indemnification or agreement to hold harmless shall only be
						  recoverable out of the assets of the partnership and not from the limited
						  partners.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.1 - Meetings

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Meetings of the participants may be called by the
						  general partner(s) or by participants holding more than 10% of the then
						  outstanding units for any matters for which the participants may vote as set
						  forth in the limited partnership agreement or charter document. Such call for a
						  meeting shall be deemed to have been made upon receipt by the general partner
						  of a written request from holders of the requisite percentage of units stating
						  the purpose(s) of the meeting. The general partner shall deposit in the United
						  States mails within fifteen days after receipt of said request, written notice
						  to all participants of the meeting and the purpose of such meeting, which shall
						  be held on a date not less than thirty nor more than sixty days after the date
						  of mailing of said notice, at a reasonable time and place.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.2 - Voting Rights of Limited Partners

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) To the extent the law of the state of
						organization is not inconsistent, the limited partnership agreement must
						provide that holders of a majority of the then outstanding units may, without
						the necessity for concurrence by the general partner, vote to (1) amend the
						limited partnership agreement or charter document, (2) dissolve the program,
						(3) remove the general partner and elect a new general partner, (4) approve or
						disapprove the sale of all or substantially all of the assets of the program,
						and (5) cancel any contract for services with the sponsor or any affiliate
						without penalty upon thirty days notice. The agreement should provide a
						detailed provision for the substitution of a new general partner and a
						provision for the purchase of the removed general partner's interest, excluding
						any interest he may have as an investor, including the following:
1. A method of valuation of the removed
						general partner's interest which is fair. Normally, valuation at the time of
						such removal by means of an appraisal, arbitration or agreement will be deemed
						fair.
2. A method of payment for
						such interest which is fair and which protects the solvency and liquidity of
						the partnership. If immediate payment would impose a hardship upon the
						partnership, the provision should call for payment plus reasonable interest to
						be postponed to the time payment of his subordinated interest would have been
						made.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.4 - Access to Program Records

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The general partner shall maintain a list
						of the names and addresses of all participants at the principal office of the
						partnership. Such list shall be made available for the review of any
						participant or his representative at reasonable times, and upon request either
						in person or by mail the general partner shall furnish a copy of such list to
						any participant or his representative for the cost of reproduction and
						mailing.
(b) The participants
						and/or their accredited representatives shall be permitted access to all
						records of the program, after adequate notice, at any reasonable time. The
						sponsor shall maintain and preserve during the term of the program and for four
						(4) years thereafter all accounts, books, and other relevant program documents.
						Notwithstanding the foregoing, the sponsor may keep logs, well reports and
						other drilling data confidential for a reasonable period of time.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.5 - Admission of Participants

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Admission of participants to the program
						shall be subject to the following:
(1)
						Admission of Original Participants. Upon the original sale of partnership units
						by the program, the purchasers should be admitted as limited partners not later
						than 15 days after the release from impound of the purchasers' funds to the
						program, and thereafter purchasers should be admitted into the program not
						later than the last day of the calendar month following the date their
						subscriptions were accepted by the program. Subscriptions shall be accepted or
						rejected by the program within 30 days of their receipt; if rejected, all
						subscription monies shall be returned to the subscriber forthwith.
(2) Admission of Substituted Limited Partners
						and Recognition of Assignees. The program shall amend the certificate of
						limited partnership at least once each calendar quarter to effect the
						substitution of substituted limited partners, although the sponsor may elect to
						do so more frequently. In the case of assignments, where the assignee does not
						become a substituted limited partner, the program shall recognize the
						assignment not later than the last day of the calendar month following receipt
						of notice of assignment and required documentation.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.6 - Redemption and Repurchase of Units

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Ordinarily, the program may not be
						mandatorily obligated to redeem or repurchase any of the units of the program,
						although the program need not be precluded from purchasing such outstanding
						units if the purchase does not impair the capital or the operations of the
						program. Notwithstanding the foregoing, the program may obligate itself to
						redeem units under terms which comply with Section
						260.140.116.6 of these
						rules.
(b) Provisions in the
						partnership agreement or other documents which require the unit owner to sell
						his unit or give the program or any other person the right to repurchase such
						unit, irrespective of the desire of the owner to sell, will not be
						approved.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.7 - Transferability of Program Units

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Restrictions on assignment of units will not be
						  allowed. Restrictions on the substitution of a limited partner are generally
						  disfavored and will be allowed only to the extent necessary to preserve the tax
						  status of the partnership and any restriction must be supported by opinion of
						  counsel as to its legal necessity.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.8 - Accessibility and Defaults

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						In appropriate cases there may be a provision for assessment; provided,
						however, that the maximum amount which may be assessed for a voluntary
						assessment shall not exceed 100% of the initial subscription and for a
						mandatory assessment shall not exceed 25% of the initial subscription, and
						provided further, that in no case shall the total of all assessments exceed
						100% of the initial subscription. All such assessments shall be solely for the
						purpose of drilling or completing a development well or wells or for acquiring
						additional interests or leases in a prospect which has proven production. In
						such cases, the aggregate offering price of the units as set forth in the
						application for qualification shall include and show separately the basic unit
						offering price and the maximum amount of the assessment.
(b) In the event of a default in all or a
						portion of the payment of assessments, the participant's percentage interest in
						the program represented by his unit should not be subject to forfeiture, but
						may be subject to a reasonable penalty for the failure of the participant to
						meet his commitment. Provisions which conform to the following will be
						considered reasonable:
(1) For voluntary
						assessments,
(A) A proportionate reduction of
						the participant's percentage interest in revenues derived from future
						development based on the ratio of his unpaid assessment to all capital
						contributions and assessments used for such future development, or
(B) A subordination of the defaulting
						participant's right to receive revenues from future development until those
						nondefaulting participants who have paid the defaulting participant's
						assessment have received an amount of revenues from revenues of the program
						from future development equal to 300% of the proportionate amount of the
						defaulted assessment which they paid.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Participants' Rights and Obligations › Section 260.140.128.9 - Program Policies

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The partnership agreement or charter document should
						  include a recital in reasonable detail of the policies and objectives to be
						  followed by the program. This will include a statement of the extent to which
						  the program intends to engage in acquiring producing properties, acquiring or
						  drilling on unproven or unexplored properties or acquiring or drilling on
						  proven or semiproven properties.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Sales Materials and Marketing Restrictions › Section 260.140.129.1 - Sales Literature

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Sales literature, including without limitation, books,
						  pamphlets, movies, slides, article reprints, and television and radio
						  commercials, sales presentations (including prepared presentations to
						  prospective participants at group meetings) and all other advertising used in
						  the offer or sale of units shall conform in all applicable respects to filing,
						  disclosure and adequacy requirements currently imposed on the sale of corporate
						  securities under these rules. When periodic or other reports furnished to
						  participants in prior programs are furnished to prospective participants in a
						  program not yet sold, such reports will be treated as sales literature subject
						  to the above requirements.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Sales Materials and Marketing Restrictions › Section 260.140.129.2 - Group Meetings

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
All advertisements of and oral or written invitations
						  to "seminars" or other group meetings at which units are to be described,
						  offered or sold shall clearly indicate that the purpose of such meeting is to
						  offer such units for sale, the minimum purchase price thereof, the suitability
						  standards to be employed, and the name of the person selling the units. No
						  cash, merchandise or other item of value shall be offered as an inducement to
						  any prospective participants to attend any such meeting. All written or
						  prepared audio-visual presentations (including scripts prepared in advance for
						  oral presentations) to be made at such meetings must be submitted to the
						  Department within the prescribed review period. The provisions of this Section
						  shall not apply to meetings consisting only of representatives of securities'
						  broker-dealers.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Disclosure and Marketing Requirements › Section 260.140.130.1 - Offerings Registered with the Securities and Exchange Commission ("SEC")

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
With respect to offerings registered with the
						  Securities and Exchange Commission under the Securities Act of 1933, as amended
						  and qualified with the Commissioner by coordination, a prospectus which is part
						  of a registration statement which has been declared effective by said
						  Commission shall be deemed to comply with all requirements as to form of this
						  Rule; provided, however, that the Commissioner reserves the right to require
						  additional disclosure of substance in his discretion.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Disclosure and Marketing Requirements › Section 260.140.130.4 - Opinions of Counsel

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The application for qualification shall contain a
						  favorable ruling from the IRS or an opinion of counsel to the effect that the
						  program will be taxed as a "partnership" and not as an "association taxable as
						  a corporation" for Federal and State income tax purposes. An opinion of counsel
						  shall be in form satisfactory to the Commissioner and shall be unqualified
						  except to the extent permitted by the Commissioner. However, an opinion of
						  counsel may be based on reasonable assumptions, such as:
(a) facts or proposed operations as set forth
						in the prospectus and organization documents;
(b) the absence of future changes in
						applicable laws;
(c) compliance
						with certain procedures such as the execution and delivery of certain documents
						and the filing of a certificate of limited partnership or an amended
						certificate; and
(d) the continued
						maintenance of or compliance with certain financial, ownership or other
						requirements by the sponsor or general partner. The Commissioner may request
						from counsel as supplemental information such supporting legal memoranda and an
						analysis as he shall deem appropriate under the circumstances. To the extent
						the opinion of counsel or IRS ruling is based on the maintenance of or
						compliance with certain requirements or conditions by the sponsor or general
						partner, the prospectus shall contain representations that such requirements or
						conditions will be met and the partnership agreement shall, to the extent
						practicable, contain provisions requiring such compliance. There shall be
						included also an opinion of counsel to the effect that the units being offered
						will be duly authorized or created and validly issued interests in the program,
						and that the liability of the participants will be limited to their respective
						capital contributions, except as set forth in the prospectus.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Miscellaneous Provisions › Section 260.140.131.1 - Reinvestment of the Participants' Revenues

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) No offering will be approved by the
						Commissioner that includes a provision which requires that the participant
						reinvest his share of distributable cash distributions.
(b) Subject to compliance with applicable
						securities laws, a program may make available to its participants a voluntary
						plan for systematic reinvestments in such program or in any other program. No
						sales commissions may be charged the participants, however, for effecting such
						reinvestment.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Miscellaneous Provisions › Section 260.140.131.2 - Minimum Program Capital

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
No offering shall be approved by the Commissioner if
						  the minimum subscriptions necessary to activate the program are less than
						  $500,000. Additionally, in those instances where it appears unlikely that the
						  stated objectives of the program can be achieved with the minimum
						  subscriptions, the Commissioner may require a greater amount or a reduction of
						  the stated objectives of the program.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Miscellaneous Provisions › Section 260.140.131.3 - Impound Condition

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
						An impound condition as described in Section
						260.141.20 et seq of these rules
						may be imposed as a condition to the qualification of the program
						units.
(b) In those instances where
						a formal impound is not required, a provision must be included in the
						prospectus to the effect that all funds (including sales commissions and monies
						destined for reimbursement of offering costs) must be deposited in a trust
						account in a bank for the benefit of the participants of the program, subject
						to release only when the minimum program subscriptions have been deposited. The
						prospectus must also provide that such funds without deduction are to be
						promptly returned to the participants in the event that the minimum program
						subscriptions have not been obtained within the time specified in the
						prospectus, but in no event more than 6 months after commencement of the
						offering. A copy of the instructions to the bank utilized must be filed with
						the Commissioner prior to the effectiveness of the qualification.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Miscellaneous Provisions › Section 260.140.131.4 - Legend Condition

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A legend restricting transferability, in the form set
						  forth in Section
						  260.141.11 of these rules, will
						  normally be required as a condition to the qualification for sale of units and
						  must be fully described and set forth in the prospectus and the documents
						  evidencing the units.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25141,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Miscellaneous Provisions › Section 260.140.131.5 - Offers of Exchanges

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) No sponsor or any affiliates shall make
						or cause to be made any offer to a participant to exchange his units for a
						security of any company, unless:
(1) such
						offer is made after the expiration of two years after such program commenced
						operations;
(2) such offer is made
						to all participants;
(3) such
						offer, if made by a third party to the sponsor or principal underwriter, or any
						affiliate of such sponsor or principal underwriter, is on a basis not more
						advantageous to such sponsor, principal underwriter or affiliate than to
						participants.
(4) the value of the
						security or other consideration offered is at least equivalent to the value of
						the units;
(5) the value of any
						reserves used in computing the exchange ratio is supported by an appraisal
						prepared by an independent petroleum engineer within 120 days of the date such
						exchange is to be made; the value of any undeveloped acreage used in computing
						the exchange ratio is at cost unless fair market value, as evidenced by
						supporting data, is higher; and the value of other assets used in computing the
						exchange ratio is based upon audited financial statements prepared in
						accordance with generally accepted accounting principles consistently applied;
						and
(6) the offer is made pursuant
						to a qualification first obtained and, unless exempt, by means of a
						Registration Statement meeting the requirements of the Securities Act of 1933,
						as amended.
For purposes of this Section, an "offer of exchange"
						  includes any security of an oil program which is convertible into a security
						  issued by the sponsor or another issuer.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Miscellaneous Provisions › Section 260.140.131.6 - Other Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The sale of units in a program together with shares,
						  options to purchase shares or other securities issued by the sponsor or another
						  issuer ordinarily will not be permitted, unless such other securities viewed
						  separately satisfy the requirements otherwise applicable to an open
						  qualification.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.
California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 4 - Standards for the Exercise of the Commissioner's Authority › Subarticle 11 - Oil and Gas Interests › Miscellaneous Provisions › Section 260.140.131.7 - Investments in Other Programs

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Investments in units of another limited partnership, in
						  general partnerships or joint ventures shall be prohibited unless
(a) there is no duplication of selling
						commissions, selling expenses, offering costs, and sponsor's compensation or
						other fees and costs and
(b) in the
						case of investments in other limited partnerships, such other limited
						partnerships shall provide for their limited partners all of the rights and
						obligations required by these rules to be provided by the original
						program.
1.
						  Editorial correction adding NOTE filed 11-8-82 (Register 82, No.
						  46).
Note: Authority cited: Section
							 25610,
							 Corporations Code. Reference: Section
							 25140,
							 Corporations Code.