Vouch Volumes
to Value
Vouch Volumes Forward to Value / Trace Revenue Back to Volumes
There are numerous errors, such as uncalibrated meters, inaccurate tank gauging which often neglects factors like temperature and BS&W, and improper run ticket creation from third truck haulers. Additionally, telemetry devices that have not been ‘trued’ on a regular schedule contribute to these issues. Consequently, our team will perform a volume validity analysis on a sample of pads. Furthermore, we will determine measurement error exposure and calculate the true production for the current month.
Subsequently, our team will take the volume corrections back to the prior month’s production and revenue. This process helps to determine how the incorrect volumes negatively impact the value of all sold products. Essentially, we vouch forward in real time and trace back one month in the past.
Typically, a normal Revenue Audit goes back in time by one to three years, with a sample of wells dictated by the Operator. However, our solution is to use real-time volume attestation to apply to current value calculation and go back just one month to correct revenue recognition.
Moreover, if you represent an operator, it’s crucial to know whether your company, your Joint Venture Partners, and your Royalty Interests are being paid based on accurate production volumes. Therefore, our approach ensures that all parties receive fair compensation based on precise and verified production data.
Our Measurement Audit Team–including revenue accountants–has been working with Net Royalty Interest clients in Eagleford, Marcellus, and Niobrara for over ten years.
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What rights do you have as an Operator, or as a Non-Operator?
A Joint Operating Agreement states access rights to a Non-Operator; while Gas Gathering, Transportation, and Production Handling Agreements have Audit Rights for the Operator (and if the Non-Operator is a party such rights flow to them also).
What documents are crucial in vouching volumes to value?
Most Recent (for Pads Sampled): State and/or Federal production reports, Pumper gauge reports, Run Tickets, Well Test and downtime reports, Schematic of Pad, Meter proving, Sales Volumes/Lease Use Volumes/Flare Volumes, Temperature / Gravity / MCF-MMBTU conversion calculations.
What documents are crucial for tracing value back to volume?
(Applies to Pads Sampled): Purchaser or Plant Statements, Applicable Contracts, Purchaser Price Bulletins, Purchaser Check Stubs, State Severance tax rate schedules.