Certain transactions that are in substance borrowings repayable in cash or its equivalent and shall be accounted for as borrowings and may not qualify for the recognition and reporting of oil and gas reserves. These include: (1) Cash advances to operators to finance exploration in return for the right to purchase oil or gas discovered, (2) Funds advanced for exploration that is repayable by offset against purchases of oil or gas discovered, or in cash if insufficient oil or gas is produced by a specified date. (3) Funds advanced to an operator that are repayable in cash out of the proceeds from a specified share of future production of a producing property, until the amount advanced plus interest at a specified or determinable rate is paid in full, shall be accounted for as a borrowing and do not qualify for the recognition of reserves. The advance is a payable for the recipient of the cash and receivable for the party making the advance. Such transactions fall into a category commonly referred to as production payments.