(28)ACCOUNTING ISSUES IN OIL AND GAS OPERATIONS, WITH OR WITHOUTTHE COPAS ACCOUNTING PROCEDURES

摘要

In many instances, a drilling unit for the production of oil and gas is composed of several different mineral properties, each of which can be held by different working interest owners. When the unit is formed, one of the working interest owners (usually, but not necessarily, the owner of the largest proportionate share in the unit) will be designated as the operator, with responsibility for the drilling operations necessary to produce oil and gas from the unit. In this role, the operator must also, among other things, ensure that each owner of a nonoperating working interest (nonoperator) pays its proportionate share of the expenses associated with operations.A unit may be formed involuntarily or voluntarily. A unit is formed involuntarily through the use of "forced pooling" statutes or a similar regulatory scheme. When a unit is involuntarily created, the relationship among the operator and the nonoperators will be governed by the forced pooling statutes and other provisions of state law. A unit is formed voluntarily when the working interest owners agree to pool their interests. When a unit is voluntarily formed, the relationship among the operator and the nonoperators is typically governed by a joint operating agreement (JOA), though the parties could proceed without one. If a JOA is in place, it will define the relative duties and obligations of the operator and the non-operators in connection with the unit. The parties' duties and obligations may be addressed in further detail in the exhibits to the JOA. The exhibit addressing the accounting procedure is typically attached as Exhibit "C," and a common form for this exhibit is one of the Council of Petroleum Accountants Societies, Inc. (COPAS) Model Form Accounting Procedures (COPAS Accounting Procedures).