Programme for Advanced Oil and Gas Accounting (3)
Day 1 – CONVEYANCES
General Contents, Concepts and Issues
(1) Types of interest
- Basic Working Interests (WI)
- Joint Working Interest
- Basic Royalty Interest (RI)
- Overriding Royalty Interest (ORI)
- Production Payment Interest (PPI)
- Net profit Interest
- Conveyances: General Rules
- Conveyances: Exchange and Poolings
(1) Farm – ins/farm outs
(2) Farm – ins/farm outs with a reversionary working interest
(3) Free wells
(4) Carried interests or sole risk
(5) Joint venture operations
(6) Poolings unitizations
(7) Unitizations
Computation of Barrels for payout
Computation of proved Reserves
Computation of proved developed reserves
Conveyances: Sales
(1) Unproved property sales
- Sales of entire interest in unproved property
- Sales of partial interest in unproved property
(2) Proved property sales
- Sales and purchases of a partial interest in proved property
- Sales of working interest in a proved property with retention of nonworking interest
Conveyances: production payments
(1) Retained production payments
- Retained production payments payable in money – reasonably assured
- Retained production payments payable in money – not reasonably assured
(2) Carved-out production payments payable in product or volumetric production payment (VPP)
. Problems and Issues associated with Conveyance
Day 2 – OIL AND GAS DISCLOSURES
. Required disclosures
. Illustrative example
. Proved reserve quantity information
. Proved reserves
. Proved developed reserves
Proved undeveloped reserves
- Use of end-of-year prices
- Reserve quantity disclosure
Capitalized costs relating to oil and gas producing activities
Costs incurred for property acquisition, exploration, and development activities
Results of operations for oil and gas producing activities
Standardized measure of discounted future net cash flows relating to proved oil and gas reserve quantities
- Future cash inflows
- Future development and production cost
- Future income tax expenses
- Future cash flows
- Discount
Changes in the standardized measure of discounted future net cash flows relating to proved oil and gas reserve quantities
- Analysis of reasons for changes in value of standardized measure 12/31/XB
- Sales and transfers, net of production costs
- Changes from extensions, discoveries, and improved recovery
- Changes in estimated future development costs
- Development costs incurred during the period that reduce future development costs
- Analysis of changes in development costs
- Revision Quantity
- Accretion of discount
Conclusion
Problems and issues that address Oil and Gas Disclosures
Day 3 – ACCOUNTING FOR INTERNATIONAL PETROLEUM OPERATIONS
- Petroleum fiscal systems
- Concessionary systems
- Concessionary agreements with government participation
- Contractual systems
Government involvement in operations
Government participation
Back in
- Production sharing contracts
- Signature and production bonuses
- Royalties
- Government participation
- Cost recovery
- Profit Oil
- Other terms and fiscal incentives
Service Contracts
Joint operating agreements
- Recoverable and non-recoverable costs
Financial accounting issues
- Financial accounting versus contract accounting
International accounting standards
Problems
Day 4 – ANALYSIS OF OIL AND GAS COMPANIES’ FINANCIAL STATEMENTS
Contractual systems
- Government involvement in operations
- Production sharing contracts Signature and production bonuses
- Royalties
- Government participation
- Cost recovery
- Profit oil
Other terms and fiscal incentives
- Capital uplifts
- Ringfencing
- Domestic market obligation
- Royalty holidays and tax holidays
Service contracts
Joint operating agreements
Financial Accounting Issues
- Financial accounting VS Contract Accounting
- Disclosure of proved reserves – SFAS No. 69
Disclosure of reserves
- International Accounting Standards
Day 5 – ANALYSIS OF OIL AND GAS COMPANIES’ FINANCIAL STATEMENTS
Source of Data
- Historical cost-based
- Future value-based
- Production
- Productive wells and acreage
- Undeveloped acreage
- Drilling activity
- Present activities
- Delivery commitments
Comparing financial reports
