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What Is Production Accounting 2019

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27 views25 pages

What Is Production Accounting 2019

Uploaded by

adeeyo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Certificate Program in

Petroleum Production Accounting


What is CAPPA?

 The Canadian Association of Petroleum Production


Accounting (CAPPA), is a Not-for-Profit Professional
Association supporting the current and future careers of
its members.
 CAPPA provides Education, Advocacy, Information,
Resources, and Continuing Professional Development
(CPD) critical to the profession of Production
Accounting.
What is Production
Accounting?

 A career in Production Accounting is a unique blend


of accounting, regulatory, data analysis and reporting
of revenues and royalties.
 Production accountants receive information from the
field, land administrators, joint venture analysts,
marketing and financial departments in order to
perform monthly requirements of their role.
What is Production
Accounting?

 Production Accountants (PAs) work with volumes of


hydrocarbons and water produced from the wells,
inventory at facilities and distribution from the facility
including revenue, division of ownership and
royalties.
 The information that the Production Accountant
produces is critical to company operations,
management and financial reporting. It is the
juncture where operational data is translated into
financial entries.
What is Production
Accounting?

 Production Accountants manage:


 How much oil, gas, natural gas liquids and water is
produced from each well and what is the
composition of those volumes produced
 How much of each of those products is held in
inventories at various facilities
 The distribution of volumes from one facility to
another (and how much is sent to market/sales)
 The payment of revenue and royalties due based on
the ownership in those wells and facilities.
What is Production
Accounting?

 PAs strongly rely on other departments and disciplines


to effectively perform our duties.

 Data used by Production Accountants in day-to day


functions is relayed through a number of systems and
departments.
 Many disciplines (departments) work interdependently
to successfully achieve positive corporate results.
Collaboration

• Well and Facility


Ownership
• Royalty Agreement Operations • Well and Facility Flow and
Details Land
Process
• Acquisition and • Forward Planning
Divestitures • Regulatory Compliance

Production
Accounting
Engineering
Marketing

• Sales Delivery Points Field


• Product Pricing
Finance
• Transportation
Charges • Well tests and Facility Inventories
• Monthly Throughput / Production
Data
• Volumes & Dollars • Product Deliveries
• Revenue/Royalty Analysis • Well and Facility Status
• Audits – Internal/External
• CSOX Compliance
• Income Statement
Product to Volumes/Dollars

OIL

• REVENUE

$ • ROYALTIES

• REPORTING
Gas &
NGL (natural
gas liquids)
What does a typical day look like?
Production Accounting Activities

Monthly cycle:
 Week one – Gather, analyze and enter production data
 Week two – Allocate and report pipeline “splits”
 Week three – Governmental volume and allocation
reporting
 Week four – Booking revenue, royalties and custom fees
Production Accounting Activities

Yearly cycle:
 Gas Cost Allowance (Crown Royalty reduction program)
 Asset Reviews (helps ensure accurate reporting and mitigate lost
revenue or overpayment)
 Audits (Assets, Crown Volumes & Expense, Joint Venture,
EPAP/EVAP, Royalty, CSOX, Freehold Mineral Tax Unit Price Calc,
Processes & Controls)
 Equalizations / 13th Month Adjustments (reallocation of revenue
and expenses according to volumes put through a facility)
Ad hoc

Field Trips!
Monthly & Yearly Deadlines
Production Accounting Tools

 Field Data Capture software


 Schematics and Diagrams
 Internal PA Software and MS Office
 Government Reporting, eg. Petrinex
 Royalty Tracking Software
 Internal Financial Software
 EMAIL, PHONE, FACE to FACE
Production Accountant Attributes & Skills

 Proficient With Numbers – Dollars & Volumes


 Deadline Driven
 Organized
 Good Communicator – Written & Verbal
 Computer Savvy
 Ability To Learn Quickly
 Adaptable To Change And Surprises
Education delivery

 2 Pre-requisites
 10 CAPPA Courses
 Completion of Petrinex modules (government web-
based reporting system)
Pre-requisites

 Excel
 Financial Accounting

While not a pre-requisite, we strongly encourage students


to achieve English comprehension of a minimum of Level
8 of the Canadian Language Benchmark
Core Courses

 Course 1 – Introduction to the Oil & Gas Industry


 Course 2 – Field Data Capture, Raw Data, Well Production & Joint
 Course 3 – Water and Water Volume Confirmations, Oil and Oil
Splits
 Course 4 – Gas and Gas Splits Allocations
 Course 5 – Volumetrics: Production Accounting Analysis
 Course 6 – Fee Calculations & Journal Entries, Marketing, Revenue
Allocations & Journal Entries, Oil Valuations and EVAP
 Course 7 – Freehold, Override, IOGC & Unitization
 Course 8 – Crown Royalty Calculations, Reconciliation & Journal
Entry, Gas Cost Allowance, Tax Levies and Fees
 Course 9 – Production Accounting Software, Accruals, Accounts
Receivable Reconciliation & Capstone Case Studies
 Course 10 – Measurement, EPAP & Directive 17 and Oil Sands
Program Course Content

 Notes include tables, schematics, pictures


 Exercises & Self Study Questions for practice and
knowledge acquisition check-points
 Case Studies to mimic a “PA” desk
 Midterm & Final
Benefit of a CAPPA Certificate

 It gives you a good foundational understanding of the industry


 It will help you better understand the roles of a Production
Accountant and some of the tasks that are performed on a daily /
monthly basis
 A CAPPA Certificate would show you are committed to this career
path
 It could lead to a higher salary (salary range is $55K to $110K+)
 It could be a stepping stone to a “student” or “new grad” job
opportunity (Most PA job ads require a CAPPA certificate)
 It sets you up for success
Production Accounting – Continuing
Education opportunities

 Ongoing Continuing Professional Development (CPD) Seminars


 Post Secondary Degree (ACCT, ECON, FNCE)
 Accounting Designation (CPA)
Why get a CAPPA Membership?

 As a student, or once you have completed your certificate, you


have the option to purchase a yearly CAPPA membership
 CAPPA Memberships offer a number of benefits
 It gives you access to Salary Surveys & Job Board
 Networking & Volunteer Opportunities
 Preferred pricing for ongoing continuing education & events
 It provides you a number of discounts at various places i.e Home
& Auto Insurance, Pet Insurance, Goodlife Fitness memberships
 It gives you access to lots of industry resource materials only
accessible with a CAPPA membership
 It allows you to stay on top of industry updates
Industry Outlook/Job Prospects

 Economic cycles
 Retirement/Transfer of Knowledge
 More technical savvy
 Analysis and critical thinking development
 More regulatory aspects, not less
 Opportunity to specialize
 New PAs will be needed!
Member Survey - When do you plan to retire?
THANK YOU!

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