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Office of Natural Resources Revenue Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Production Reporting and Verification Presented.

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Presentation on theme: "Office of Natural Resources Revenue Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Production Reporting and Verification Presented."— Presentation transcript:

1 Office of Natural Resources Revenue Office of Natural Resources Revenue (ONRR) U.S. Department of Interior Production Reporting and Verification Presented by: Kimbra Davis Program Manager for Production Reporting and Verification Petroleum Accountants Society of Oklahoma February 12, 2015 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

2 Office of Natural Resources Revenue 2 Kimbra Davis Program Manager 303-231-3514 Lydia Barder Program Support Manager 303-231-3570 Louise Williams Onshore Production Reporting Manager 303-231-3439 Sonny Betancourt Onshore Team 1 Supervisor 303-231-3628 Luke Lundmark Onshore Team 2 Supervisor 303-231-3532 Susan Long Offshore Production Reporting Manager 303-231-3079 Vicky Stafford Offshore Team 1 Supervisor 303-231-3388 Vacant Offshore Team 2 Supervisor Ken Stamper Production Inspection and Verification Manager 303-231-3042 Production Reporting and Verification

3 Office of Natural Resources Revenue o Production Reporting Requirements o System Considerations o Production Inspection and Verification Initiatives 3 Topics

4 Office of Natural Resources Revenue o If you operate a Federal or Indian oil and gas lease or agreement, you must file an OGOR each month for each active lease or agreement when there are wells that are not permanently plugged or abandoned or when inventory exists for the property (paraphrased from 30 CFR §1210.102) o Reports are due electronically to ONRR approximately 45 days after the production month ends — January OGOR is due March 15 th o The operator does not have to report a well in drilling status unless there is associated test production 4 Production Reporting Requirements

5 Office of Natural Resources Revenue 5 Surface Location Considerations

6 Office of Natural Resources Revenue o Effective production month July 2010 : Flared oil-well gas = disposition code 21 Flared gas-well gas = disposition code 22 Vented oil-well gas = disposition code 61 Vented gas-well gas = disposition code 62 o All of the production reporting Appendices can be found at http://www.onrr.gov/ReportPay/Handbooks/default.htm Disposition/Adjustment Codes are in Appendix I http://www.onrr.gov/ReportPay/Handbooks/default.htm o May 7, 2010, Dear Reporter Letter on reporting requirements for flaring and venting is at http://www.onrr.gov/ReportPay/PDFDocs/20100507.pdf 6 Venting and Flaring Requirements

7 Office of Natural Resources Revenue 7 Royalty due on the volume removed or sold from the lease at the BLM or BSEE approved point of measurement ○Reported in barrels of clean oil of 42 standard U.S. gallons at 60 °F ○Corrected for Basic Sediment and Water (BS&W) and other impurities ○Report American Petroleum Institute (API) oil gravities in accordance with standard industry procedures after correction to 60 °F ○In some cases, you may be able to take a transportation allowance on actual or theoretical losses between the approved measurement point and the sales point Contact ONRR’s Asset Valuation Office at royaltyvaluation@onrr.gov for guidanceroyaltyvaluation@onrr.gov Approved measurement point Sales point into refinery Transportation losses Volume reported on OGOR and 2014 Oil Volumes Reported on the OGOR

8 Office of Natural Resources Revenue 8 Enforcement Process: OTRs and NONCs

9 Office of Natural Resources Revenue o Line Count Threshold o Database Synchronization o Top Fatal Reporting Errors o Effective Date Challenges 9 System Considerations

10 Office of Natural Resources Revenue Line Count Threshold Up to 5,000 L/A - Prod Month Combination Lines Up to 5,000 lines for each Part A Up to 5,000 lines for each Part B Up to 5,000 lines for each Part C K8500 Oil and Gas LLC 5/2013 Manning Unit 10

11 Office of Natural Resources Revenue 11 Database Synchronization

12 Office of Natural Resources Revenue Issue - OGORs not submitted to eCommerce in chronological order OGORs reject with edit 11030, “Beginning inventory total must match ending inventory total from prior report period” Because of the lack of date order staging in the PeopleSoft (PS) OGOR validation process, ONRR has a large number of rejected OGORs due to edit 11030 In 2014, we implemented a nightly validation process. Sometimes multiple validation runs are required to eliminate the edit for multiple months of OGOR submissions. System Change Request to be implemented in 2015 to permanently resolve the problem 12 Top Fatal Error for FY 2013-2014

13 Office of Natural Resources Revenue 13 Other OGOR Fatal Errors for FY 2014

14 Office of Natural Resources Revenue Updates of well reference information and OGOR acceptance can be affected by dates ONRR System Well Eff Date ONRR Well Status OGOR Production Date OGOR Status OGOR Result Reason 12/11/11DRG12/31/11POWAccepted Well is in the system for the production month being reported and OGORs are accepted with any status. 12/11/11DRG11/30/11OSINot Accepted Well is in the system with a later effective date than the production month being reported. Not in ONRR System 12/31/11PGWNot Accepted Cannot accept a production report with wells not entered into the ONRR system through BLM or BSEE data transfer. 14 Effective Date Challenges

15 Office of Natural Resources Revenue 15 Reasons and solutions for OGORs being rejected because of well information and dates: ○ BLM or BSEE has not approved the sundry ○ Update of well information in BLM system or BSEE system is delayed ○ Operator has not submitted sundry paperwork to BLM or BSEE If BLM or BSEE has completed and approved the sundry request, including identifying the Lease/Agreement on which the operator is trying to report, the operator can send the approved sundry to their PRV error correction contact for manual input into our system to expedite the acceptance of OGORs. Effective Date Challenges

16 Office of Natural Resources Revenue 16 ○ Production Verification Reviews ○ Measurement Inspection Team Support Production Inspection and Verification Initiatives

17 Office of Natural Resources Revenue o OGOR C investigation/resolution of adjustments (Disposition Codes 42, 44, 45, 46, and 47) o Validation of accurate accounting for abnormal operations Test Volumes Line Fill Pigging o Analysis of offshore allocation systems o Ongoing technology assessment – improve measurement accuracy and reporting o Risk Model development – strategy to effectively, efficiently ensure accurate production reporting for high risk properties 17 Production Verification Reviews

18 Office of Natural Resources Revenue o ONRR funded Measurement Inspection group began inspections in 2013 3 BSEE measurement inspectors in Lafayette, Louisiana Issued 600 Incidents of Non-compliance (INCs) issued in FY 2014 2 nd BSEE measurement inspection team planned o Future efforts include Joint inspections with BSEE inspectors/ONRR engineers Characterization/analysis of INCs Operator Training/Seminars (collaborating with BSEE) Similar cooperative agreement with BLM to establish agile measurement inspection team under development 18 Measurement Inspection Team Support

19 Office of Natural Resources Revenue 19 Minerals Production Reporter Handbook http://www.onrr.gov/ReportPay/Handbooks/default.htm is the Handbooks page http://www.onrr.gov/ReportPay/Handbooks/default.htm Oil and Gas Reporter Training Guide for Form ONRR-4054 (OGOR) http://www.onrr.gov/ReportPay/training/default.htmhttp://www.onrr.gov/ReportPay/training/default.htm is the Reporter Training page Production Reporting Contacts http://www.onrr.gov/ReportPay/PDFDocs/operasgn.pdfhttp://www.onrr.gov/ReportPay/PDFDocs/operasgn.pdf is the OGOR – Oil and Gas Operations Report (Form ONRR-4054) and Error Correction Contacts page Maintain Your System Access and Contact Information http://www.onrr.gov/ReportPay/access.htmhttp://www.onrr.gov/ReportPay/access.htm includes information on completing the EMARF and the ONRR-4444 Production Reporting References http://www.onrr.gov/ReportPay/references.htmhttp://www.onrr.gov/ReportPay/references.htm includes How to Resolve Errors documents, OGOR Video Training, Offshore FMP information, Reporting Codes, Reporter Letters, and Regulation links www.onrr.govwww.onrr.gov website Reporting/Paying – Production Reporting Tools for Assistance

20 Office of Natural Resources Revenue Office of Natural Resources Revenue (ONRR) U.S. Department of Interior 20 Industry Compliance Accurate Revenues & Data Professionalism & Integrity Contact Us: Kimbra Davis Program Manager, Production Reporting and Verification Kimbra.Davis@onrr.gov (303) 231-3514


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