Alaska Application Assignment

Application for Assignment of Working Interest in State of Alaska Oil and Gas, Gas Only, or Geothermal Leases

Division of Oil & Gas

Alaska Department of Natural Resources

550 W 7th Avenue, Suite 1100, Anchorage, Alaska 99501-3563

Phone: 907-269-8800   Email: dog.leasing@alaska.gov

General Information and Instructions

The Department of Natural Resources (DNR) evaluates assignments and transfers of interest to ensure they will not adversely affect the State’s interests; no assignment or transfer is binding upon the State unless approved by the commissioner (11 AAC 82.605).

DNR endeavors to assist applicants in meeting their timing goals associated with their transaction. Statutory, regulatory, logistical, and workload realities may constrain the agency, including, for example, unit operator transfer timing requirements, time required to evaluate the financial and risk aspects of the transfer and to determine any financial assurances that may be required, and effective date options for assignments (11 AAC 82.605 and lease provisions).

✓ Use this packet to transfer working interest in any state oil and gas, gas only, or geothermal lease.

✓ Use this packet to transfer leases and assets to a subsidiary or LLC; and/or when control of the assets or leases is being transferred to a different entity such as through a change of LLC membership, merger, acquisition, stock or other ownership interest sale (11 AAC 82.605).

✓ This packet initiates the transfer process with DNR, coordinated through the Division of Oil & Gas (DO&G). If the State is lessor together with a private lessor, such as Arctic Slope Regional Corporation, the applicant must contact the private lessor directly for its transfer application and instructions.

✓ Please read all instructions carefully. Errors or omissions in the application may result in delays.

✓ Contact DO&G at the numbers above if you have questions. DO&G staff are available for a pre-application meeting.

Document Submission Information

Submit the following to DNR as soon as possible:

o All sections of this packet.

o Completed Lease Assignment Form (pages 6-8) for each ADL being transferred (11 AAC 82.605-615). See page 5 for detailed instructions.

o The filing fee of $150 per Lease Assignment Form must accompany the packet. Fees may be paid by including a check or money order made payable to the Department of Natural Resources.

Submit the following as applicable. DNR reserves the right to request additional information as necessary to fully analyze and evaluate the transfer and risks to the State. DO&G may request additional documents or information.

o Financial standing documentation. To protect the State’s interests, applicants may be required to execute additional bonding and/or establish a financial assurances agreement with DNR.

o Corporate structure chart for intercompany assignments, audited financial statements for both the assignor (if the assignor is cosigning on a DR&R agreement) and assignee for the last three years (annual report, balance sheet, income statement, cash flow statement).

o Request to transfer plans of operation.

o Unit operator resignation and unit operator successor.

o Easement assignment applications, and letters and applications to transfer authorizations issued by other DNR agencies. DO&G will assist with and coordinate these transfers.

o Purchase and sale agreement; may be held confidential under AS 38.05.035(a)(8) if applicable and requested by the applicant.

o Estimates of abandonment costs generated by the lessee or a third party, and updated production forecasts (including estimates of when abandonment may occur), if there are any improvements on the surface or subsurface.

o Reserves report if determined that additional bonding or financial assurances are required.

SECTION 1. Transaction Information

State of Alaska Working Interest Assignment

1. Information about the transaction. Fully describe the nature of the transaction. If the transaction will be effected through a series of actions such as stock sale, sale of membership, and name change, list and describe each action. Attach any maps, as-builts, exhibits or other information to assist DNR in understanding the location and extent of the leases and assets being transferred. Attach additional sheets as necessary to fully explain the transaction.

2. List primary contacts for this transfer.

Primary Contact for Assignor/Seller:

Company:

Primary Contact for Assignee/Buyer:

Company:

SECTION 2. ADLs, DNR Permits, and DNR Authorizations

State of Alaska Working Interest Assignment

List in detail all DNR leases, permits, and authorizations subject to the transfer. Do not include authorizations for other agencies. Include ADLs, any authorized or pending applications for plans of operations, units and unit agreements, all other authorizations issued by DNR, and current bonds and/or financial assurances posted by the current lessee to DNR. Include the Division of Oil & Gas, Division of Mining, Land and Water, State Pipeline Coordinator’s Office, and all other DNR agencies. Please be as specific as possible.

SECTION 3. Assignment Form

State of Alaska Working Interest Assignment or Initial Separation of Overriding Royalty Interest

ASSIGNMENT OF INTEREST IN OIL AND GAS LEASES, GAS ONLY LEASES, AND GEOTHERMAL LEASES

DNR FORM DO&G 25-84 (revised 3/15)

General Information and Instructions

• The assignment requirements are found at 11 AAC 82.605 – 11 AAC 82.615.

• This form must be used for transferring a working interest; and for transferring an overriding royalty interest or initial separation that is part of the working interest transaction.

• Use Form 25-84A to transfer only an existing overriding royalty interest or an initial separation from a working interest.

• Only information requested on the Lease Assignment Form may be included on it. If extraneous information is included on the Assignment Form, it will be deemed in error and will be returned to the applicant for correction.

• If the application is approved, the effective date of the transfer is the first day of the month following the date on which the assignment application is filed and the filing fee paid. Upon prior written request, the effective date of the transfer may be the first day of the month in which the assignment application is filed.

• Ownership percentage must be expressed in decimals with five or fewer digits to the right of the decimal, unless previously approved by the state.

• The assignor/seller and assignee/buyer must be qualified before the application can be approved. Individuals qualified to hold an oil and gas, gas only, or geothermal lease are not assigned qualification numbers. Please see the Qualification FAQ on DO&G’s webpage for questions regarding qualifications. Qualification requirements can be found under 11 AAC 82.200 – 11 AAC 82.205.

• The addresses for the assignor and assignee should be the addresses on file with DO&G. Qualifications reports to verify and/or obtain the address currently on file may be obtained from DO&G’s website. If the addresses on file are no longer current, please attach a letter requesting a change of address with the assignment application. Notice of approval or denial of assignment will be returned to these addresses.

• Each form must: have only one assignor/seller, only one assignee/buyer, only one lease, be filed in triplicate, be accompanied by a $150 filing fee, be filed within 90 days of final signing, and not include extraneous information.

• If the notification lessee has changed, please designate a notification lessee in the space provided. Please leave this field blank if the assignor or assignee for the assignment is not the current notification lessee.

• The signature page must contain original signatures of both the assignor/seller and assignee/buyer witnessed by a notary public, the date, printed or typed name and title of the signatories, and if applicable, the company names and qualification file numbers.

Ownership percentage must be expressed in decimals with five or fewer digits to the right of the decimal unless previously approved.

9. LANDS AFFECTED by this assignment of interest (attach Exhibit A if necessary)

Containing acres, more or less

10. The Notification Lessee for the purpose of receiving any and all notices from the State of Alaska in connection with the lease will be:

We, the undersigned, affirm (1) that the information provided on this application is true and correct and that it is filed pursuant to 11 AAC 82.605 and 11 AAC 82.615, and (2) that both parties to this agreement are qualified to transfer or hold an interest in oil and gas leases pursuant to 11 AAC 82.200 and 11 AAC 82.205.

Exhibit A

(Legal Description Only)

ADL