OT05404 | PRT: valuation of non-arm's length disposals and appropriations - gas - valuation of light gases from 1 January 1994 - buyer’s/seller’s nominations

LB Oil & Gas has no hard and fast rule for valuing the premium of a buyer’s nomination contract or the discount of a seller’s nomination contract. Generally the producers are asked to justify any premiums or discounts that they propose. However LB Oil & Gas takes the view that most, if not all, Southern Basin sales will be on the basis of a buyer’s nomination and will tend to value Southern Basin inter-affiliate sales on this basis even if the contract purports to be a seller’s nomination contract.