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 260.140.128.3 - Annual and Periodic Reports

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The partnership agreement or charter
						document shall provide for the transmittal to each participant of an annual
						report within 90 days after the close of the fiscal year, and of a semiannual
						report within 60 days after the end of the first six months of its fiscal year,
						containing, except as otherwise indicated, at least the following information:
(1) Financial statements, including a balance
						sheet and statements of income, partners' equity and changes in financial
						position prepared in accordance with generally accepted accounting principles
						and accompanied by an auditor's report containing an opinion of an independent
						certified public accountant or independent public accountant, except that
						semiannual reports need not be audited.
(2) A description of each geological prospect
						in which the program owns an interest, including the cost, location, number of
						acres under lease and the interest owned therein by the program.
(3) A list of the wells drilled by such
						program (indicating whether each of such wells has or has not been completed),
						the costs incurred in or allocable to drilling each well and the additional
						estimated costs to complete each well.
(4) A summary itemization, by type and/or
						classification of the total fees and compensation paid by the program, or
						indirectly on behalf of the program, to the sponsor and affiliates of the
						sponsor. If compensation is paid on a subordinated interest subject to
						Subsection (b)(1) of Section
						260.140.125.1 of these rules, a
						reconciliation of all such payments to the conditions precedent and limitations
						thereto. The report should provide comparative data from which competitive
						prices may be determined, pursuant to Subsection (g)(2) of Section
						260.140.127.2 of these
						rules.
(5) With respect to a
						program which compensates the sponsor in the manner permitted by Subsections
						(a)(1), (a)(2) and (e) of Section
						260.140.125.1,
(A) a schedule reflecting the total program
						costs, and where applicable, the costs pertaining to each prospect, the costs
						paid by the sponsor and the costs paid by the participants,
(B) the total program revenues, the revenues
						received or credited to the sponsor and the revenues received or credited to
						the participants and
(C) a
						reconciliation of such expenses and revenues to the limitations prescribed by
						said Sections.
(6)
						Annually, beginning with the fiscal year succeeding the fiscal year in which
						the program commenced operations, a computation of the total oil and gas proven
						reserves of the program and dollar value thereof at then existing prices and of
						each participant's interest in such reserve value. The reserve computations
						shall be based upon engineering reports prepared by qualified independent
						petroleum engineers. In addition, there shall be included an estimate of the
						time required for the extraction of such reserves with a statement that because
						of the time period required to extract such reserves the present value of
						revenues to be obtained in the future is less than if immediately receivable.
						In addition to the annual computation and estimate required by this Section, as
						soon as possible, and in no event more than 90 days after the occurrence of an
						event leading to a reduction of such reserves of the program of more than 10%,
						a computation and estimate conforming to the above requirements shall be sent
						to each participant.