05.07.2009
There exists a variety of different transactions that involve the advance of funds to the owner of an interest in an oil and gas property in exchange for the right to receive the cash proceeds of productions or the production itself, arising from the future operation of the property. In such transactions, the owner almost always has a future performance obligation, the outcome of which is uncertain to some degree. Determination as to whether the transaction represents a sale or financing rests on the particular circumstances of each case.

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