Production Allocation Discrepancy Report

Transcription

1 Registry TIP Production Allocation Discrepancy Report Jurisdiction Release/Revision Location of Change in this Comment Date Document AB May 7, 2012 Initial Release Audience: Natural Gas Producing and Allocating Facility Operators. Purpose: A new Registry report, entitled the Production Allocation Discrepancy (PAD) report is available for Industry s use effective May 7, The basis for this new report is to validate that residue sales gas and extracted (processed) liquids do not exceed the raw gas production, beyond a reasonable threshold. Background: There are two versions of this report that are described throughout this document: Registry PAD - the automatic version created by the Registry or the on-demand version submitted by Industry users. DOE PAD automatic version created by the Department of Energy (DOE) and included as part of the monthly Gas Royalty invoice package and made available in the Ministry Invoices and Statements area of the Registry. This new Registry PAD report is part of the DOE s requirement to ensure that all Crown royalty volumes are being accounted for correctly. With the implementation of the new well based royalty formula, the production rate became part of the Crown royalty rate calculation. Allocating volumes higher than the volume produced could mean that the Crown royalty rate is too low. This report will be used by the DOE to determine cases where a recalculation of the royalty rate may need to be undertaken. The report identifies specific instances of discrepancies between: 1. Raw gas production volumes reported at the well level; and 2. Gas (residue sales) and liquids (LPGs - extracted from raw gas) that are royalty applicable, reported at the sales and/or extraction points and allocated to the applicable single or multi-well production entity(s). Discrepancies identified are +/- 20% with a quantity of at least m 3 (i.e. discrepancies identified on the report are those that are beyond a 20% threshold in terms of the comparison of volumes sold to volumes produced and also beyond the volumetric threshold of m 3 ) Discrepancies of 100% will be displayed regardless of the quantity. The allocated LPG processed volumes are converted to gas equivalent values and combined with the allocated (SAF/OAF) gas 5/7/2012, T179, Page 1

2 dispositions (sales), which is compared to a well or group of wells (units, well groups etc.) gas well production as reported in volumetrics. For those cases where the allocation to a stream is 20% (or more) above the production volume on the Registry PAD report, the DOE will create a DOE PAD report monthly for each owner involved in the stream, as part of their Gas Royalty invoice cycle process. The DOE PAD report displays the previous royalty rate, the projected royalty rate, the previous charge amount, the projected charge amount and the charge amount difference which represents the royalty impact. The projected charge amount is the potential royalty charge that could appear on your Gas Royalty invoice if the discrepancy is not corrected by the facility operator. If corrections or an application for exemption are not submitted to the DOE, the Quantity Component (r q ) of the royalty formula will be defaulted to 30% since the production volume is assumed to be incorrect. The Price Component (r p ) will remain unchanged. The DOE PAD report will use this revised (projected) gas royalty rate. See the DOE April 2012 Information Bulletin for further details. Key Principles: Security: The Registry PAD report is designed for facility operators who submitted the volumetrics or allocations and is restricted to users within the Business Associates (BA s) that have access to experimental facility Users who do not have access to experimental facilities will not be able to request or access the Registry PAD report. Each BA must ensure they have at least one user with experimental access in order to access the report details. The DOE PAD report will be delivered to each BA s Ministry Invoices and Statements area of the Registry. Report format & timing: The Registry PAD report is available in a CSV format only. The Registry PAD report can be requested at any time (on demand) by an operating BA who submits volumetric or allocation data and has access to experimental facilities and will run during the day. The Registry PAD report will also be created automatically two days prior to the DOE Allocation reporting deadline with another final version for the month being created on the night of the allocation deadline. It is this final version that the DOE will use to create the DOE PAD report. Data contained in the report: The Registry PAD can contain data from to the current production month. Due to the extensive calculations that are required for the generation of this report, the data contained within it will only be for submissions made up to the previous day of the request. For example, users cannot request a report, make a submission (amendment), request the report again all in the same day and view the new amendment on the report - they must wait until the next day to request a new Registry PAD report to view the amended Consequences of a Discrepancy: The monthly automatic final Registry PAD report (the version created on the allocation deadline day) will be the basis for the DOE PAD report. The DOE PAD report shows the potential financial consequences to the royalty owner, and will be available to users within the Gas Royalty invoice package produced at the end of May. The intent of the DOE PAD report is to display potential charges actual charges will not commence until the shadow billing period has ended. DOE will communicate to Industry users well in advance on when actual charges will start to be assessed. Exemptions from DOE PAD charges: The DOE recognizes that there may be legitimate reasons for a discrepancy that cannot be corrected by amending A process will be developed by the DOE to apply for an exemption from the royalty rate recalculation in these situations. Please contact your Volumetric and Cost Reporting contact person/team for 5/7/2012, T179, Page 2

3 information regarding the exemption process. (See Appendix F. Points of Contact in the DOE Information Bulletins for the applicable contact information. HOW TO USE THE REGISTRY PRODUCTION ALLOCATION DISCREPANCY REPORT: COLUMN NAMES AND DESCRIPTIONS: Before using the data on this report it is important to understand the definitions for the column headings as many are similar. There are essentially three sets of data on the report: data associated with the volumetric reporting (columns B - P) data associated with the allocation reporting (columns Q AF) data associated with the discrepancy information (columns AG to AJ) Column Column Name Description A Production Month The production month the data was reported for. B Volumetric Reporting BA ID The ID of the operator who reported the volumetric (Gas Production) C Volumetric Reporting BA Name The name of the BA who reported the volumetric (Gas Production) D Volumetric Facility ID The Facility ID that pertains to the volumetric E Volumetric Facility Name The name of the facility that pertains to the volumetric F Volumetric Amendment Number The amendment number associated with the volumetric G Volumetric Well ID: The Well ID under which the gas production was reported. The volume of gas production reported (10 3 m 3 ) for the well for that production month. H Volumetric Gross Well Production: I Volumetric PE %: The percentage (portion) of the gas production volume that belongs to the Production Entity (PE). J Volumetric Well Production The calculated result of the Gross Well Production multiplied by the Volumetric PE %. K Volumetric PE Product: The Production Entity product used for this row of data on the report. There are 3 available: GAS, OIL or ALLOC. The production entity screen will identify GAS or OIL. ALLOC is used when a well belongs to a multi well group (i.e. a unit) but is on a royalty holiday or program and has been (should be) excluded from the group (unit) until the program ends. L Volumetric Contact Name The name of the person who submitted the volumetric M Volumetric Contact The address of the person who submitted the volumetric N Volumetric Contact Phone The phone number of the person who submitted the volumetric O Production Entity The production entity (PE) the producing well belongs to. P Total Production Volume: The sum of all the Volumetric Well Production quantities associated to the PE. For a single well PE it will be the same value as column J, for a multi well PE it will be the 5/7/2012, T179, Page 3

4 Column Column Name Description sum of all the wells (column J) involved in the PE. Q Allocation Reporting BA Id The Business Associate ID of the operator who reported the allocation (SAF/OAF) R Allocation Reporting BA Name The name of the BA who reported the allocation (SAF/OAF) S Allocation Facility id The Facility ID associated with the allocation T Allocation Facility Name The name of the facility associated with the allocation U Allocation Amendment Number The amendment number associated with the allocation V Allocation Product The product being allocated on the SAF/OAF. W Allocation Activity The activity being allocated on the SAF/OAF X Allocation From/to The from/to on the SAF/OAF allocation. Y Allocation Cascaded from The Cascaded from facility ID on the SAF/OAF allocation. Z Allocation Production Entity The Production Entity (PE) listed on the allocation (stream ID). AA Allocation Gross Calc Volume The gross calculated volume from the SAF/OAF submitted. AB Allocation Calculated GE Volume The gas equivalent of the volume allocated for gas. For gas, this will be the same as the gross Calculated Volume (column AA); for liquids (LPG s), this will be the gross multiplied by the applicable gas equivalent factor. AC Allocation Contact Name The name of the person who submitted the allocation AD Allocation Contact The address of the person who submitted the allocation AE Allocation Contact Phone The phone number of the person who submitted the allocation AF Total Allocated Volume The sum of all the Allocation Calculated GE volume quantities that belong to the PE. For a single well PE it will be the same value as column AB, for a multi well PE it will be the sum of all the allocations (column AB) involved in the PE. AG Volume Difference: The absolute value (in 10 3 m 3 ) of the difference between production volume and allocated volume. AH Volume Difference%: The percentage of the volume difference between production volume and allocated volume. The percentage is capped at plus or minus 100%. It is the positive percentages that will be subject to potential royalty recalculations. AI AJ Volume Discrepancy Message Id Volume Discrepancy Message Text Each error message has a different ID #. The text associated with the message ID. Suggestions on How to Use the Registry PAD report An essential step for reviewing the report is to filter the data in order to determine where inaccurate allocations have occurred when compared to production. Be very careful when 5/7/2012, T179, Page 4

5 filtering as you can easily filter away the discrepancy. We suggest you hide some columns when reviewing the report in order to determine the discrepancies to be reviewed. The columns that SHOULD NOT be HIDDEN are: Column A Production Month Column D Volumetric Facility Column G Volumetric Well ID Column J Volumetric Well Production Column K Volumetric PE Product Column O Production Entity Column P Total Production Volume Column S Allocation Facility Column V Allocation Product Column W Allocation Activity Column X Allocation From / To Column Y Allocation Cascaded From Column Z Allocation Production Entity Column AB Allocation Calculated GE Volume Column AF Total Allocated Volume Column AG Volume Difference Column AH Volume Difference % Once you have only these columns selected, here are five suggestions in filtering your data to determine why these facilities are on the Production Allocation Discrepancy (PAD) Report. 1. Review all Positive Results under Column AH - Volume Difference%. These are the streams which will have royalty recalculations if not corrected. Suggestions for corrections: An amendment has been made with just the volumetric or SAF/OAF submitted. Possibly all that is required is to resubmit either the missing volumetric or SAF/OAF submission. This will clear up the imbalance. New streams in that particular month have no allocations with other streams in that facility with over allocations. Allocations are high for some wells and low on others. Review the allocation process in your production allocation system. 2. Review all positive 100% imbalances which display allocations but no production. Select the positive 100 from Column AH - Volume Difference, (BLANKS) from Column J - Volumetric Well Production and GAS from Column V - Allocation Product. This shows wells that have no volumetric data supplied yet the well(s) were included in allocations. Possible reasons are: No volumetric submission has been reported. An amendment has been made with the allocations submitted yet the volumetric submission has not (timing difference). Over-allocation which results in a Volume Difference % greater than or equal to 100%. 5/7/2012, T179, Page 5

6 3. Review all negative 100% imbalances which displays no allocations but has production. Select the negative 100 from Column AH - Volume Difference% and GAS and (BLANKS) from Column V - Allocation Product. This shows the well(s) that have volumetric data submitted yet no allocations have been reported. Possible reasons are: No allocations have been reported. An amendment has been made with the volumetrics submitted yet the allocation submission has not (timing difference). The well was reported as part of a Multi-well Production Entity (examples are a Unit, Well Group) allocation but is required to be reported at the well level. 4. Any wells that are part of a Production Entity (Unit, Well Group etc.) that will receive a royalty benefit are required to be reported at the well level. Example: all new wells qualify for the New Well Royalty Rate (NWRR). The PAD report will show you the well(s) that need to be reported at the well level and the allocation volume must not be included in the multi-well production entity. To find these wells, filter as follows: Select ALLOC from Column K - Volumetric PE Product. These wells should have allocations reported at the well level to clear the imbalance. Select the following columns for the identified wells from the step above: a) Select the facility from Column D - Volumetric Facility, b) Select the three options ALLOC, GAS & OIL from Column K - Volumetric PE Product c) Select GAS and (BLANKS) from Column V - Allocation Product d) Select negative 100 and all POSITIVE results from Column AH - Volume Difference% e) Select each production month from Column A - Production Month. The result of this query will show you the following: Well(s) that need to be reported at the well level, however gas production was low enough such that a royalty recalculation was not required. If you have over-allocated to the Production Entity, you will need to reduce your allocation to this Production Entity and then allocate to the wells in order to receive the royalty benefit. 5. Review all positive or negative 100%records which will display over/under allocations at a specific facility. Select the negative 100 and positive 100 results from Column AH - Volume Difference%. Then select each Column D - Volumetric Facility and review each facility paying specific attention for both positive and negative 100 results. This is an example where you have no allocations for some streams and over allocations at other streams. 5/7/2012, T179, Page 6

7 Known issues with the Registry Production Allocation Discrepancy Report At the time of implementation of this report there are four known issues, currently being analyzed for corrective action, where applicable. Watch for further updates on the resolution for these items. The known issues are: 1. Allocations for the activity of PURDISP at a Battery (BT) to a Gas Plant (GP) are not being captured. This will result in allocations not being identified on the report and if an allocation does exist in the Registry, users should ignore this error until the report correctly reflects the allocation for PURDISP from a BT to a GP. 2. The Registry currently does not have the information supplied to it to determine if a well completes its royalty program early. The Registry has been capturing the start and end date of the programs. Until this information is supplied, wells that have completed their program and are in a multi-well PE (i.e. Unit) will incorrectly show on the Registry report as ALLOC under column V - Allocation Product and expect the allocation to a single well PE. 3. Gas production less fuel, flare & vent that equals zero or near zero or a battery that has zero or near zero dispositions are appearing on the report. It will take further analysis to identify how these should be handled and if an exemption will be required. 4. The sweep/automatic versions of the report will be generated and notifications will be sent to users even if they do not have experimental access and thus these users will be unable to open the report. This is due to the way in which notifications are generated in the Registry. For More information: Contact the DOE Gas Royalty Valuation & Cost Reporting Team as per the list below, based on your company name. Business Associate Phone Number and Address Numbered companies, A, B, H-P VCR1@gov.ab.ca C G VCR2@gov.ab.ca Q Z VCR3@gov.ab.ca Team Lead Mary Spearing Lily Hiew Jyoti Bhambhani 5/7/2012, T179, Page 7