CMM Cheat Sheet 2026

The 30 highest-yield CMM facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. A 'pugh clause' in an oil and gas lease primarily serves to: → Release non-producing acreage not held by production at the end of the primary term
2. Which statement correctly describes the treatment of plugging and abandonment (P&A) costs in a mineral property DCF model? → P&A costs are deducted as a lump-sum liability at the end of the reserve life
3. Under the passive activity rules, which entity type holding a working interest in oil and gas does NOT automatically receive the working interest exception? → S corporation
4. Which mineral estate characteristic most significantly differentiates it from a fee simple real estate appraisal? → Mineral production is a depleting, non-renewable asset requiring reserve-life analysis
5. What does the term 'approximate original contour' (AOC) mean in surface mine reclamation? → Restoring the land to its pre-mining elevation and contour as closely as possible
6. A lessor demands a 'continuous development clause' during negotiation. What obligation does this impose on the lessee? → Drilling successive wells within a specified time after completing each prior well
7. In the context of mineral revenue accounting, what does 'BTU adjustment' (also called BTU factor or heating value adjustment) affect? → The volume of gas adjusted to a standard energy content for pricing and royalty purposes
8. For federal onshore leases, ONRR requires royalty payments to be submitted by what deadline each month? → The 15th of the following month
9. What is the significance of compliance reporting? → Documenting regulatory adherence
10. What is the primary purpose of a minerals title opinion in the context of appraisal? → To confirm ownership, encumbrances, and the fractional interest being appraised
11. What is the purpose of well logging? → Recording formations and fluids
12. Which clause in a surface use agreement typically requires the operator to notify the surface owner before commencing any new operations on the property? → Prior notice clause
13. Which seismic attribute is most useful for directly detecting hydrocarbons by identifying amplitude anomalies? → Amplitude versus offset (AVO)
14. The 'reasonable use' standard in surface damage law means an operator must: → Use only as much surface as is reasonably necessary for the operations conducted
15. Which document must an operator file to demonstrate financial ability to complete reclamation before mining begins? → Reclamation performance bond
16. A surface owner wants to build a new home near an existing wellsite on split-estate land. Which legal principle typically governs this conflict? → The mineral estate is dominant and the surface owner builds at their own risk
17. Which federal tax provision allows independent oil and gas producers to deduct intangible drilling costs (IDCs) entirely in the year they are incurred? → IRC Section 263(c) election for immediate IDC expensing
18. Which federal regulation requires oil and gas operators to submit an 'Application for Permit to Drill' (APD) and what agency reviews it? → 43 CFR Part 3162; BLM reviews APDs for onshore federal and Indian oil and gas leases
19. What is the primary purpose of a reclamation bond posted by an oil and gas operator before beginning surface disturbance? → To ensure funds are available to restore the surface if the operator abandons operations
20. Under the doctrine of correlative rights, a surface owner who also owns the mineral estate is still limited in their drilling activity because: → Correlative rights protect neighboring mineral owners from drainage and waste
21. A 'pugh clause' in an oil and gas lease serves what primary purpose? → Releases non-producing acreage or depths from the lease at the end of the primary term
22. Under the Oil Pollution Act of 1990 (OPA 90), operators are required to maintain a financial responsibility mechanism primarily to cover: → Oil spill removal costs and damages
23. Under the 'after-acquired title' (estoppel by deed) doctrine, if a grantor conveys land they don't yet own and later acquires it, the title: → Automatically passes to the grantee under the original deed
24. What is a division order in mineral management? → Revenue distribution document
25. Which of the following best describes a key competency required for lease negotiation & administration in CMM practice? → Strong analytical skills combined with effective communication and ethical judgment
26. Which well control method involves closing the blowout preventers and circulating out a kick while maintaining bottom-hole pressure constant? → Wait-and-weight method (engineer's method)
27. Which BLM regulation governs the measurement, reporting, and royalty valuation of oil and gas produced from federal and Indian leases? → 30 CFR Parts 1202 and 1206 (ONRR Royalty Valuation)
28. What is 'acid mine drainage' (AMD) and what geochemical process causes it? → Acidic water produced when sulfide minerals oxidize upon exposure to air and water
29. When appraising mineral rights using the comparable sales approach, which factor most critically affects comparability? → Geologic similarity and reserve quality
30. What is the 'gross income from the property' concept used for in oil and gas taxation? → It serves as the base for calculating the percentage depletion deduction