Nielson-True Partnership, True Oil Company, Tax Matters Partner - Page 11

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             authority (local authority) recommended that a field be                                              
             designated as a tight formation.8  Second, FERC could affirm,                                        
             reverse, remand, issue a preliminary finding, or take no action                                      
             on the local authority's recommendation.  If no action was taken                                     
             by FERC, the local authority's recommendation became final 45                                        
             days after receipt of the recommendation by FERC.  If FERC issued                                    
             preliminary findings but failed to take further action, the local                                    
             authority's recommendation became final 120 days after the date                                      
             FERC's preliminary finding was issued.  The third procedural step                                    
             permitted an interested producer to petition the local authority                                     
             for its recommendation that a particular well within the                                             
             designated tight formation field should be classified as a tight                                     
             formation well.  Fourth, FERC could affirm, reverse, remand,                                         
             issue a preliminary finding, or take no action on the local                                          
             authority's recommendation with respect to a specific well.  As                                      
             in step 2, the local authority's individual tight formation well                                     
             recommendation became final 45 days from the date FERC received                                      
             the recommendation unless FERC issued a preliminary finding.  In                                     
             the event that FERC issued a preliminary finding, FERC had 120                                       
             days from the preliminary finding to take further action or the                                      




                    8 NGPA sec. 503, 15 U.S.C. sec. 3413(c)(1), defines the                                       
             local regulatory authority as the "Federal or State agency having                                    
             regulatory jurisdiction with respect to the production of natural                                    
             gas."                                                                                                




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Last modified: May 25, 2011