First purchase of crude oil

An equity (not custody) transaction commonly associated with a transfer of ownership of crude oil associated with the physical removal of the crude oil from a property for the first time (also referred to as a lease sale). A first purchase normally occurs at the time and place of ownership transfer where the crude oil volume sold is measured and recorded on a run ticket or other similar physical evidence of purchase. The volume purchased and the cost of such transaction shall not be measured farther from the wellhead than the point at which the value for landowner royalties is established, if there was a separate landowner.