1. (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. (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. (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. (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. (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. (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,

      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,
      2. (B) the total program revenues, the revenues received or credited to the sponsor and the revenues received or credited to the participants and
      3. (C) a reconciliation of such expenses and revenues to the limitations prescribed by said Sections.
   6. (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.
2. (b) By March 15 of each year, the general partner must furnish a report to each participant containing such information as is pertinent for tax purposes.

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.

History

1. Editorial correction adding Note filed 11-8-82 (Register 82, No. 46).