The Bureau of Ocean Energy Management (BOEM) released its long awaited new Notice to Lessees and Operators (NTL) updating the procedures and criteria used to determine when and if additional supplemental financial assurance is required for an Outer Continental Shelf (OCS) lease, pipeline right-of-way, or right-of-use and easement.  New BOEM NTL No. 2016-N01, dated July 12, 2016, takes effect on September 12, 2016 and supersedes and replaces NTL No. 2008-N07, which was commonly referred to by industry as the “supplemental bond” NTL.

While NTL No. 2016-N01 contains several changes in policy, one of most significant for the offshore oil and gas industry is the elimination of the all-or-nothing financial exemption from the requirement to provide supplemental financial assurance allowed under NTL No. 2008-N07.  Under new NTL No. 2016-N01, BOEM may allow a lessee or holder of a right-of-way or right-of-use and easement to self-insure up to 10% of that entity’s tangible net worth depending upon BOEM’s evaluation of that entity’s financial ability to carry out its obligations based on (1) financial capacity; (2) projected financial strength; (3) business stability; (4) reliability; and (5) record of compliance.  BOEM plans to hold workshops in Houston and New Orleans prior to the effective date of new NTL No. 2016-N01. A copy of NTL No. 2016-N01, the NTL implementation timeline, and information regarding the BOEM workshops can be found at the links below.

NTL No. 2016-N01
NTL Implementation Timeline
BOEM Workshops

Liskow & Lewis will host a seminar in September addressing how those in the offshore oil and gas industry can best position themselves to comply with the new requirements of BOEM NTL No. 2016-N01.

Disclaimer: This Blog/Web Site is made available by the law firm of Liskow & Lewis, APLC (“Liskow & Lewis”) and the individual Liskow & Lewis lawyers posting to this site for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice as to an identified problem or issue.  By using this blog site you understand and acknowledge that there is no attorney client relationship formed between you and Liskow & Lewis and/or the individual Liskow & Lewis lawyers posting to this site by virtue of your using this site.  The Blog/Web Site should not be used as a substitute for legal advice from a licensed professional attorney in your state regarding a particular matter.

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Photo of Collette R. Gordon Collette R. Gordon

Collette Gordon is a Houston-based lawyer sought by the region’s energy industry for sophisticated transactions, complex regulations and difficult disputes involving the Outer Continental Shelf and onshore in Texas and Louisiana. She has earned a well-regarded reputation with E&P and midstream companies for…

Collette Gordon is a Houston-based lawyer sought by the region’s energy industry for sophisticated transactions, complex regulations and difficult disputes involving the Outer Continental Shelf and onshore in Texas and Louisiana. She has earned a well-regarded reputation with E&P and midstream companies for oil and gas acquisitions and divestitures, energy-related contract drafting, onshore and offshore title examination, leasing, right of way and pipeline issues.

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Photo of Jana Grauberger Jana Grauberger

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and…

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and midstream projects and facilities. Jana has represented clients in negotiating a wide variety of onshore and offshore contracts, including purchase and sale agreements, farmouts, participation agreements, joint operating agreements, production handling agreements, platform use agreements, gathering agreements, connection agreements, construction contracts, transportation contracts, and decommissioning agreements. She also represents clients in connection with regulatory matters involving Department of Interior agencies, including the Bureau of Ocean Energy Management (BOEM), the Bureau of Safety and Environmental Enforcement (BSEE), and the Office of Natural Resources Revenue (ONRR).

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