A copy of the opening trial balance from the start of the most recent fiscal year, or the closing trial balance from when the accounting system is being transferred to the new personnel is a solid start. Then all unpaid payables get entered into the new system. The detailed GL of all transactions keyed in for the current fiscal year gets reviewed. Detailed AR and AP ledgers get brought over. All bank statements are of course mandatory, (as in a list of all prepayments and deposits).
We would need a copy of the well summaries, and a corporate well listing with ARO liabilities. The working interests as per JOA agreements, and how they are set up in the accounting system. We need to know who the operators and contract operators are. A list of all the AFEs raised and their status – are they waiting on partner approval, IONs, etc. The status of all operated and non-operated cash calls, and a list of the wells in penalty if any. How many operated JIBs are issued each month to how many partners? How many non-operated JIBs are received each Month? We would need working papers on any impairments or write offs, and working papers on E&E and P&E assets, as well as a capital continuity schedule. Who is on payroll, who are the field operators, if any, and any consulting contracts.
Directors and officers are required to carry liability insurance. All office contents and wells should be insured. We would need current coverage's and renewal dates, are they updated quarterly or annually? What is the date of reconciliation of control of well insurance and copies of the working papers. WCB – have information on file and date of last filing. How is ERP handled? Who is in charge of the manual, and is it updated for new management and contacts? Who answers the mandatory 1-800 number?
Pipeline and property taxes must be paid on a regular schedule to avoid penalties. Is this done internally or outsourced? This project requires field inventory of equipment to reconcile to annual taxes, which dovetails nicely to the property and equipment section.
Is there inventory? If yes, provide the working paper reconciliation of field inventory.
Access to external databases and apps
Petrinex – requires registration and a password. A letter may have to be prepared to remove current authorities and assign new authorities. Is there auto debit set up for payment of the monthly crown royalties?
EPAP – enhanced production audit program – will need a letter from old management authorizing new management and deleting current authorities for access. What is the filing date? Need the complete file and can be easily outsourced.
AER – Alberta Energy Regulator - need digital data submission (DDS) passwords – this also provides access to the EPAP system. A letter may have to be prepared to remove current authorities and assign new authorities. What is the company LLR rating, and are there any deposits currently with the AER?
Alberta Energy Electronic Transfer System – ETS - Letter may have to be prepared to remove current authorities and assign new authorities. Is there auto debit set up for payment of crown surface and mineral lease rentals? Is auto debit set up for crown land sales?
Alberta Land Titles – will need passwords for the SPIN account and for the Sabiro account to retrieve statements
Jiblink – all login IDs and passwords for anyone who has access, including production accountants
SCADA – chart reading – who is the chart reader? Zedi?Critical control? Will need to change contact and contract information.
IHS Energy – Accumap or Geoscout
CS Explorer or other system – P2
APEGA – who currently holds the permit to practice? May need to be updated.
Alberta One Call – when was the information last updated? Need working papers for last update of all LSDs with pipelines, and update contact information
Western Canadian Spill Services – when was the information last updated, and working papers for last information submitted?
Revenue Canada – will need an RC59 to change the authority access on all CRA accounts. How often is GST filed – monthly, quarterly, annually and copy of last filing, copy of the most recent T5 filing and any NR4s issued.
After all the information is gathered, reviewed, updated,cleaned up and usable, there are a number of processes that need to be discussed with the management.These cover very important items that are necessary in any business, such as payables approval,and others that are very specific to the oil and gas industry such as gas marketing, production accounting, land data management, the raising and nomenclature of AFE’s and how the cost centres are named.