Advanced Oil and Gas Accounting: International Petroleum Accounting 3 Months Intensive Full-Time, Postgraduate Diploma - MSc

Programme Outline:

Upstream Oil and Gas Operations

Introducing the Oil And Gas Industry

Brief History of the U.S. Oil and Gas Industry

Origin of Petroleum

Anticline

3-D Seismic

4-D Seismic

Acquisition of mineral interests in property

Mineral Rights

Mineral Interests

Fee Interests

Overriding Royalty Interests (ORI)

Retained ORI production payment Interest (PPI)

Dutch Carved-out production payment

Carved-out net profits interest created from working interest

Net profits interest created from mineral interest

Oil, Gas and Mineral Lease Provisions

Lease bonuses

Royalty provision

Primary term

Delay Rental Payment

Shut-In payment

Right to Assign Interest

Right to free use of resources for lease operations

Offset Clause

Introduction to Oil and Gas Accounting (1)

Introduction to Oil and Gas Accounting (2)

Stratigraphic Test Well or Exploratory well

Service well

Dry hole

Dual completion

Dry natural gas
natural and artificial lifts

Oil and Gas production and Sales

Some State and US Federal Oil and Gas Drilling Regulation

Maximum Efficiency Drilling Rate (MER)

The Concept of Peak Oil

Historical cost accounting methods

Historical Development of accounting methods and current status

Introduction to successful efforts accounting

Chart accounts for successful efforts company

Oil and Gas subsectors –Upstream, Mid-Stream and Downstream

Horizontal, Vertical and Full Integration within the Oil and Gas Industry.

Addressing Problems associated with Oil and Gas Accounting

Nondrilling Exploration Costs – Successful Efforts

Introduction to Full Cost (FC) Accounting

Distinguishing between Non-drilling and Drilling Costs

Cost of Identifying areas that might warrant exploration

Cost of topographical, geological and geophysical studies

Cost of carrying and retaining undeveloped properties

Dry hole contribution

Cost of drilling and equipping exploratory well

Cost of drilling exploratory type Stratigraphic test well

Successful Efforts–Exploration Cost

Accounts for a full cost company

G&G costs

Reconnaissance survey

Detailed Survey

Shooting Rights

Obtaining G & G Permits

Exchanging C& G Studies for Property Interest

Acquisition Costs of Unproved Property –Successful Efforts

Carrying and retaining costs

Delayed Rental Property Taxes

Legal cost for title defense

Clerical and record-keeping costs

Test-well contributions

Dry hole contribution

Bottom-hole contribution

Support equipment and facilities

Problems

Offshore and International operations

Purchase in fee (Fee Purchase)

Internal costs

Options to lease

Delinquent taxes and mortgage payment

Acquisition Costs of Unproved Property –Successful Efforts

Successful Efforts Acquisition Costs

Internal Costs

Options to lease

Delinquent tax and Mortgage Payments

Top Leasing

Amortization

Amortization of exploration and development costs of proved developed reserves

Impairment

Disposition of capitalized costs – impairment of unproved properties

Disposition of capitalized costs – surrender or abandonment of property

Post balance sheet events

Disposition of capitalized costs – reclassification of an unproved property

Land department

Addressing Issues and Problems in unproved property acquisition costs

Advanced Oil and Gas Accounting: International Petroleum Accounting (1)

Module 2

Accounting Concepts

The Money Measurement Concept

The Entity Concept

The Going Concern Concept

The Dual Aspect Concept

The Accounting Period Concept

Materiality (Proportionality) Concept

The Conservatism Concept

Consistency Concept

The Realization Concept

The Matching Concept

The Cost Concept

Financial Governance and Standardization Institutions

Financial Accounting Standard Board (FASB)

The Security and Exchange Commission (SEC).

Accounting Standards Board (ASB)

International Accounting Standards Committee (IASC)

International Accounting Standards Committee Foundation (IASCF)

International Financial Reporting Standards (IFRS)

Industry Specific Oil and Gas Accounting Standards

Generally Acceptable Accounting Principles (GAAP) for Oil and Gas Producing Activities

Oil Industry Accounting Committee (OIAC)

Drilling Development Costs– Successful Efforts

Income tax accounting for drilling costs

IDC vs. Equipment

Intangible Drilling Costs (IDC)

Up to an including the installation of Christmas Tree

Prior to Drilling

G& G

Preparation of Site

During Drilling

Drilling contractor’s charges

Drilling mud, chemicals, cement, supplies

Fuel

Wages

Well testing

At Target depth and during completion

Well testing

Perforating and cementing

Swabbing, acidizing and fracturing

Labour related to the installation of subsurface equipment

Plugging and abandoning cost – for dry wells

After Christmas tree – following completion

Removal of Drilling Rig

Restoration of land and damages paid to surface owner

Wells other than Exploration and development Wells

Intangible costs for extending well (see lists 1 & 2, above)

Intangible costs incurred in drilling water supply and injection wells

Intangible costs incurred in drilling water and injection – where water well is being used to for exploration and development well or for injection.

Financial accounting for drilling and development costs

Well classification

Exploratory well

Service well

Stratigraphic test well

Proved developed oil and gas reserves

Proved undeveloped reserves

Successful Efforts, exploration costs

Exploratory drilling costs

Development drilling costs

Stratigraphic test wells

AFE’s and drilling contracts

Special drilling operations and problems

Workovers

Damaged or lost equipment and materials

Fishing and side tracking

Abandonment of portions of wells

Additional development costs

Development costs

Costs of gaining access and preparing well l