It is important to know the Federal regulations when operating on Federal or Tribal lands.
Let Woolery put its decades of experience to work to help ensure your reporting and filings are compliant with current regulations. We know the rules. We know where and how all the common errors are made; volumes issues, processed gas issues, takes vs entitlements, deductions, and many more. We have seen them all and know how to ensure you are reporting accurately.
You do not want to be exposed to per day civil penalties for being non-complaint. Our goal is to keep you off the ONRR’s radar by doing things correctly the first time. If an audit is issued or you have already been engaged in an audit, our goal is to make your job easy by being the intermediary to keep you from receiving civil penalties and to bring you back into compliance.
Here are a few common issues we often see when reviewing a company’s existing royalty calculations:
- Not all volumes being accounted for, such as, field fuel, plant condensate, or purchaser’s POP retention
- Incorrect deductions or paying on net value received
- Processed gas reported as unprocessed
- Deductions netted from sales price
- Incorrect or missing Federal Lease and Agreement percentages
- Reporting to wrong Federal Lease and Agreement
- Reporting on takes instead of entitlements
- Dual accounting or accounting for comparison on BIA leases not being performed
Unbundling
The unbundling process is complex and burdensome, but beneficial by identifying the allowable transportation and processing deductions for federal royalties. Consider the cost implications of paying a higher effective royalty rate by not taking allowable transportation and processing deductions. Unfortunately, more often than not, the rates listed on your Plant Statement for gathering, processing, compression, electrical, or a POP’s percentage to name a few are not always allowable as a deduction for Federal and Indian royalties and need to be unbundled.
We could never promise a reduction in your royalty payments, but we do know the intricacies and complications associated with correctly “unbundling” your transportation and processing costs to find any deductions to which you are entitled.