States, each such non-resident person shall, at the time of filing the notification required by Rule 255, furnish to the Commission in a form prescribed by or acceptable to it, a written irrevocable consent and power of attorney which—

(1) designates the Securities and Exchange Commission as an agent upon whom may be served any process, pleadings, or other papers in any civil suit or action brought against the person executing the consent and power of attorney or to which he has been joined as defendant or respondent, in any appropriate court in any place subject to the jurisdiction of the United States, where the cause of action (i) accrues on or after the effective date of this rule, and (ii) arises out of any offering made or purported to be made under this regulation or any purchase or sale of any security in connection therewith; and

(2) stipulates and agrees that any such civil suit or action may be commenced by the service of process upon the Commission and the forwarding of a copy thereof as provided in paragraph (b) of this rule, and that the service as aforesaid of any such process, pleadings, or other papers upon the Commission shall be taken and held in all courts to be as valid and binding as if due personal service thereof had been made.1

(b) Service of any process, pleadings or other papers on the Commission under this rule shall be made by delivering the requisite number of copies thereof to the Secretary of the Commission

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or to such other person as the Commission may authorize to act in its behalf. Whenever any process, pleadings or other papers as aforesaid are served upon the Commission, it shall promptly forward a copy thereof by registered mail to the appropriate defendants at their last address of record filed with the Commission. The Commission shall be furnished a sufficient number of copies for such purpose, and one copy for its files.

Rule 263 Notice of Delayed or Suspended Offering and Sale

If within 3 business days after the issuer has received notice that the Commission has no further comments with respect to the notification a bona fide effort is not made to proceed with the offering and sale of the securities proposed to be offered under this regulation, or if the offering or sale of such securities is suspended by the issuer or any underwriter within 15 days after the issuer has received such notice, a notice of the delay or suspension, stating the reasons therefor, shall be filed by the issuer or underwriter with the Regional Office of the Commission with which the notification was filed, unless such information is set forth in the offering circular. Such notice shall be sent promptly by telegraph or air mail and if sent by telegraph shall be confirmed in writing within a reasonable time by the filing of a signed copy of the notice.

ARTICLE 1.

Rule 300 Definitions of Terms Used in Regulation B

When used in Regulation B

(a) The term "fractional undivided interests in oil or gas rights" includes landowners' royalty interests, overriding royalty interests, working interests, participating interests, and oil or gas payments, as defined in subdivisions (b) to (f), inclusive, of this rule.

(b) The term "landowners' royalty interests" means fractional undivided interests in the royalty reserved by a landowner or fee owner upon the creation of an oil or gas lease.

(c) The term "overriding royalty interests" means fractional undivided interests or rights of participation in the oil or gas, or in the proceeds from the sale of the oil or gas, produced from a specified tract, which are limited in duration to the terms of an existing lease and which are not subject to any portion of the expense of development, operation, or maintenance.

(d) The term "working interests" means fractional undivided interests in an bil or gas leasehold which are subject to any portion of the expense of development, operation, or maintenance.

(e) The term "participating interests" means

fractional undivided interests or rights of participation in the oil or gas, or in the proceeds from the sale of oil or gas, produced from a specified tract, which are limited in duration to the terms of an existing lease and which are subject to any portion of the expense of development, operation, or maintenance.

(f) The term "oil or gas payments" means fractional undivided interests or rights of participation in the oil or gas, or in the proceeds from the sale of oil or gas, produced from a specified tract, and which are limited to a maximum amount fixed in barrels of oil, cubic feet of dollars.

gas, or

(g) The term "offeror" means any issuer of, underwriter of, or dealer in, any of the interests or rights defined in subdivisions (b) to (ƒ), inclusive, of this rule, or any other person who issues, offers, or sells, any such interest or rights.

(h) The term "offering sheet" means any of the schedules from A to F, inclusive, the form of which is prescribed by the Commission, when appropriately completed so as to comply with the requirements of Regulation B, and particularly Rule 330 thereof.

1 See Forms 3-A, 4-A, 5-A and 6-A in Appendix I.

Rule 310 Limitation Upon Exemption

Pursuant to section 3 (b) of the Securities Act of 1933, as amended, but subject to the terms and conditions prescribed by Regulation B and the rules contained therein, fractional undivided interests in oil or gas rights, as defined in Rule 300, are added to the classes of securities exempted as provided in section 3 (a) of such Act; but no issue or offering, of which any interest sought to be exempted hereunder is a part, shall be exempted under Regulation B where the aggregate amount at which such issue or offering is issued, offered, or sold, exceeds $100,000.

Rule 312 Exemption Not Available to Offeror, If Unregistered Dealer

If any offeror of any of the fractional undivided interests in oil or gas rights defined in Rule 300 is, in fact, a "dealer," as such term is defined in the Securities Exchange Act of 1934, the exemption provided by Regulation B shall not be available, and, such offeror shall not be relieved from the liability which, in the absence of the exemption provided by Regulation B, would be imposed upon him because the security offered for sale, or sold, was unregistered, unless such offeror is, at the time of each offer to sell, and at the time of each sale, duly registered as a dealer under section 15 of said Act.

ARTICLE 3. REQUIREMENTS FOR Rule 320 Conditions to Exemption and Relief From Liability for Nonregistration The exemption provided by Regulation B shall be available, and, an offeror of any of the fractional undivided interests in oil or gas rights defined in Rule 300 shall be relieved from the liability which, in the absence of the exemption provided by Regulation B, would be imposed upon him because the security offered for sale, or sold, was unregistered, only upon condition—

(a) That prior to any offer to sell any security sought to be exempted hereunder, the offeror, or some person acting on his behalf, shall file with the Commission four copies of an offering sheet accurately describing such security and complying with the requirements of Rule 330.

Rule 314 Exceptions to Availability of Exemption

(a) Except as provided in (b) below, no exemption shall be available under this regulation unless it appears that the operating lessee or lessees will own, unencumbered in his name or their names, upon completion of the sale of the issue, a working interest in the tract or tracts involved equal to whichever of the following amounts is greater: (i) 20 percent of the total production from such tract or tracts of all oil, gas or other hydrocarbon substances, or (ii) the total percentage of production from such tract or tracts which is not subject to any portion of the expenses of development, operation or maintenance.

(b) Paragraph (a) shall not apply if (i) the aggregate amount at which the issue is offered to the public does not exceed $30,000 and (ii) the smallest interest which is separately offered or sold to the public is not so offered or sold for less than $300.

(c) As used in this rule, the terms "operating lessee or lessees" shall include the lessee of record actually engaged in developing and operating the tract or tracts involved and all other owners of working interests who are regularly engaged in the business of exploring for or producing oil or gas and who have consented in writing to the development and operation of said tract or tracts by such lessee of record.

OFFEROR SEEKING EXEMPTION

(b) That the offeror, at the time of the initial offer to sell any security sought to be exempted hereunder, shall deliver, or cause to be delivered, to every person solicited to buy, a copy of the offering sheet then on file with the Commission (as amended, if amended) accurately describing such security and complying with the requirements of Rule 330.

The term "offer to sell," as used in subdivision (b) of this rule, shall not be deemed to include a notice, circular, advertisement, letter, or communication published in any newspaper, or sent through the mails, or by means of any instrument of transportation, or communication in interstate commerce, or broadcast by radio, if such notice, circular, advertisement, letter, communication, or

radio broadcast states only from whom an offering sheet may be obtained, and, in addition, does no more than identify the security, state the price thereof, and state by whom orders will be executed.

(c) That the offering sheet referred to in subdivision (a) and (b) of this rule is fully effective in all respects at the time of each initial offer to sell and at the time of the making of each contract for the sale of any security described therein.

(d) That prior to the making of each contract of sale with, and prior to the payment of any part of the consideration by, the purchaser of any security sought to be exempted hereunder, the offeror shall deliver to each purchaser evidence satisfactory to each such purchaser of the validity of the title which he is to receive and upon which the value of his interest depends.

(e) That not later than fifteen days after the making of each contract for the sale of any interest sought to be exempted hereunder, the offeror making such sale shall file with the Commission a written report of such sale on Form 1-G, which shall be kept confidential, unless the Commission shall order otherwise.

Compliance with Rule 320 shall not be required in any of the following types of transactions, provided exact copies of any prospectus, notice, circular letter, or circular communication sent through the mails, or by means of any instrument of transportation or communication in interstate commerce, to any of the persons, corporations, or trusts designated in subdivisions (b), (c), and (d) of this rule, preliminary to the delivery of, or in lieu of, an offering sheet, or designed to communicate any of the information required in any offering sheet, are simultaneously filed with the Commission:

(a) Offers or sales to a person regularly engaged in the business of exploring for, or producing oil, or gas.

(b) Offers or sales to a person duly registered as a dealer under section 15 of the Securities Exchange Act of 1934, as amended, who is resident, or, if a partnership or corporation, maintains a bona fide place of business within the same State or Territory within which the oil or gas property involved in such sale is located.

(c) Offers or sales to a person duly registered as a dealer under section 15 of the Securities Exchange Act of 1934, as amended, who is not resident, or, if a partnership or corporation, does not maintain a bona fide place of business within the same State or Territory within which the oil or gas property involved in such sale is located, provided and upon condition that the offeror making the sale in question shall, not later than 15 days after making the sale of the interests, file with the Commission a written report of such sale on Form 2-G, which shall be kept confidential unless the Commission shall order otherwise.

(d) Offers or sales to a corporation or trust, not registered as a dealer under section 15 of the Securities Exchange Act of 1934, as amended, the assets of which consist principally of oil or gas rights, and stock of which, or certificates of interest or participation in which, are at the time registered under the Securities Act of 1933, as amended, provided and upon condition that the offeror making the sale in question shall, not later than fifteen days after making the sale of the interest, file with the Commission a written report of such sale on Form 2-G, which shall be kept confidential unless the Commission shall order otherwise.

Rule 324 Filing of Offering Sheets on Behalf of Other Persons

An offering sheet may be filed with the Commission for, and on behalf of, other persons, provided all such other persons are duly registered as dealers under section 15 of the Securities Exchange Act of 1934, as amended, and upon condition that signed lists containing the names and addresses of all such persons are filed with the Commission in duplicate prior to any use of such offering sheet by such other persons; and the Commission may refuse to accept for filing any list which contains the name of any person who is not so registered.

Rule 326 Liability for Unauthorized Use of Offering Sheet

Any person using an offering sheet in connection with an offer to sell any security described therein shall not be entitled to the exemption provided by Regulation B, and, shall not be relieved from any liability which, in the absence of the