Asset Management Overview - P2 Energy Solutions

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Nov 18, 2013 (3 years and 10 months ago)

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Introduction to

Asset Management

Allen Hart

September 22, 2005

2

Agenda


System Features


AM295 Defaults


Master File Relationships


Inventory Types


Inventory


Assets


Material Transfers


Analysis Reports


Statutory Depletion

3

System Features


Inventory Control


Asset Depreciation and Depletion


Fully integrated with GL , AP, and JIB


Automated Material Transfers


Analysis Reports

4

System Features


Inventory


All costs are tracked at a detailed inventory
level.


The user controls and defines the level of
detail at which inventory is tracked.


Inventory master items (part numbers) are
given a pre
-
defined description which fully
describes the inventory item and flows
through to JIB invoices.

5

System Features


Assets


Location where inventory costs are
accumulated.


A location can be a well, lease, or cost center.


Level at which depreciation method, rate, and
useful life is defined.


Both producing and non
-
producing (WIP)
costs exist at the asset level.


6

System Features


Material Transfers


Data entry screens provide the ability to
automate entries for many kinds of transfers at
the detailed inventory level.


Data entry provides on
-
line integration and look
-
up
features.


Mass entry processing exists for property sales,
abandonments, leasehold reclassification, and
inventory allocations.

7

System Features


Depreciation / Depletion


System supports SL, SYD, DB, DDB, ACRS,
MACRS, UOP and Statutory Depletion.


User has flexible control when DD&A is
calculated and booked.


May review in forecast and on
-
line modes
before actually booking DD&A.

8

System Features


Asset Retirement Obligations (FAS143)


Provides ability to record costs and book
DD&A for Asset Retirement Obligations at the
book level.

9

System Features


Analysis Reports


Reports exist for on
-
hand inventory at any
location such as wells, yards, or cost centers.


Inventory reports may be reviewed at detailed or
summarized levels and provide many different
selection criteria.


Subledger reports exist that reconcile to the
general ledger.


Reports also exist for gain/losses, DD&A
forecasts and trade
-
in analysis.

10

AM295 System Defaults

11

Master File Relationships


I
n
v
e
n
t
ory
T
y
p
e
C
o
d
e
s


(2 = LWE)


‘What’

‘Where’

& ‘How’

Inventory Class Master


(TNK = Tanks)



Inventory Master


(93 = 300 Bbl Tanks)



Serial Number


(2546NQ = National


300 Bbl Tank)


Asset Class Master


(29 = SL5, MACRS7,


DB14)


Asset Master


(534 = LWE Texas


Well #1)

12

Inventory Types


The broadest grouping of inventory
categories such as LWE, LHC, Intangibles


Controls data entry validations


System defined codes 2 through 10


Identifies accounts for:


Depreciation and depletion


Retirements: gain/loss, abandonment,
casualty, and disposal

13

Inventory Types

Controls retirement

and DD&A accounts

for each company

14

Inventory Classes


User
-
defined groupings for similar inventory
items (Casing, Tubing, etc.)


Identifies default account recommendations
to use during material transfers.


Control point for ensuring proper coding of
inventory to GL entries and attachment to
assets.


Prevents mixing LHC with LWE, for instance.

15

Inventory Masters


Part or stock number which describes
inventory at the detailed level


Level at which costs are coded to during entry.


Description flows through to JIB invoices


Level (along with location and condition
code) at which quantities and costs are
aggregated for average unit cost calculation


Serial numbered items are averaged at the
additional detail level for serial numbers.


16

Serial Number Master


Optional, pre
-
defined detailed description
feature which can be required with specific
inventory master records



Validation checks performed during data
entry.


May be associated with internal fixed
asset tag numbers, seismic line numbers,
manufacturer’s serial numbers, etc

17

Inventory Class Master

18

Inventory Master

Full cross
-
referencing during data entry.

Description flows through to JIB invoices

Used for sorting in reports.

Used for per
-
unit averaging
.

19

Inventory

Serial Number Master

Different ways

to use pre
-
defined

Serial Master records

20

Asset Classes


Stores DD&A parameters for Book, Tax,
and Alt Min:


Methods include SL, DDB, MACRS, UOP


Lives


Frequency conventions


Half Year, Half Year Annual, Mid Quarter, etc.


Controls type of inventory cost allowed on
assets for proper organization of costs.


Each asset class has only one inventory type

21

Asset Masters


Grouping point for cost layers which have


the same DD&A parameters (asset class)
and,


location (well, lease, cost center)


Maintains costs and DD&A at book, tax,
and alt min tax bases.


Maintains costs that are In
-
Service or WIP


In
-
Service date allows DD&A calculations

22

Asset Class Master

LWE ARO F&F

23

Asset Master

24


1
-

WHSE/OTHER ADDITION

2
-

PROPERTY ADDITION

3
-

WAREHOUSE TO PROPERTY

4
-

PROPERTY TO WAREHOUSE

5
-

WAREHOUSE GENERAL ITEMS TO WAREHOUSE GENERAL ITEMS

6
-

PROPERTY TO PROPERTY

7
-

WAREHOUSE GENERAL ITEM DISPOSAL

8
-

WAREHOUSE GENERAL ITEM SALE

9
-

WAREHOUSE GENERAL ITEM ABANDONMENT

10
-

WAREHOUSE GENERAL ITEM CASUALTY

11
-

PROPERTY DISPOSAL

12
-

PROPERTY SALE

13
-

PROPERTY ABANDONMENT

14
-

PROPERTY CASUALTY

15
-

EXPENSE TO CAPITAL ASSET

16
-

TRADE IN

17
-

JIB PROPERTY TO PROPERTY


Material Transfers

The Material Transfer Function Processor consists of 16 different data entry

screens, each designed to handle a specific material transfer situation

25

MT


Property Sale

Select and input general ‘From’ information

26

MT


Property Sale

Specify amounts relating to the ‘From’ information

27

MT


Property Sale

Review journal entry before posting

28

MT


Property Sale

Credit JIB account for proceeds from the sale, $400


Our share of original cost to remove $1,000


Less: Future JIB credit to net acct

240

($400 x 60%)


Adjustment credit to our net acct $ 760


Remove original cost’s share of accum. DD&A, $9.60


Sale proceeds book to clearing account , $400.


Our loss on transaction, $750.40


Our share of proceeds 240.40


Less our NBV (1000 cost


9.60 DD&A)

990.40



Our net loss on transaction 750.40

Journal Entry Analysis

29

MT


Warehouse to

Property

Select and input general ‘From’ information

30

MT


Warehouse to

Property


Specify amounts

relating to the ‘From’ information

31

MT


Warehouse to

Property

Select and input general ‘To’ information

32

MT


Warehouse to

Property


Specify amounts

relating to the ‘To’ information

33

MT


Warehouse to

Property

Review journal entry before posting

34

MT


Warehouse to

Property

Credit warehouse for tank’s original cost, 19,000


Charge JIB account for billing to ‘To’ property, 15,000


(FMV 20,000 x ‘B’ condition .75 = $15,000)


Our share of original cost to retain at well is 11,400


(Warehouse cost 19,000 x 60% = 11,400)


Less: Future JIB debit to our net account

9,000


(JIB Billing 15,000 x 60%)

Adjustment debit to our net asset account 2,400


Our loss on transaction at the Warehouse, $1,600 **


Amount billed to outside owners 6,000


Outside owners share or original cost
7,600


(19,000 x 40% = 7,600)


Loss recognized on warehouse 1,600



Journal Entry Analysis

** Note: Loss booked because AM295 “Capitalize Warehouse Gain/Loss on TO Property” is set to ‘No’

35

Analysis Reports


Reports exist for reviewing on
-
hand inventories,
gain/losses, trade
-
ins, and subledger
-
to
-
GL totals.


Asset Inventory (AM851)


Warehouse Inventory (AM820)


Detail Inventory (AM840)


Detail Serial Number (AM845)


Gain/Loss Analysis (AM860)


Trade In Analysis (AM861)


Inventory Reconciliation (AM730)


Inventory Lead Sheet (AM299)

36

Statutory Depletion


Federal IRC Section 613 & 613A calculations
patterned after published case example approaches:


Property cost depl compared to percentage depl subject to limits


Property net income limitation applied when applicable


Depletable quantity limitation (1,000 BPD or user defined quantity), with
option to apply to Oil, Gas, or BOE (both)


Option to apply depletable quantity to marginal properties first, to
maximize allowable depletion


65% of taxable income limitation (with reallocation to exclude wells
whose cost depl > limited pctg depl from the initial allocation)


Percentage depletion carryover from current year is calculated and
updated to Asset Master records for use in subsequent years


Utilization of carryovers from prior years is calculated and


updated to Asset Master records to adjust carryover balances

37

Statutory Depletion


Supports state calculations using state level rates


Unit of Property may be individual well and/or wells grouped by Tax
Group Masters.


Capability to partially qualify oil and/or gas by well to use only a portion of
the volume, revenue, & expenses for that product in the calculations


User defined Tax Account Groups to automatically extract volumes,
revenues, & expenses from Property Ledger or Cost Center Detail ledger


Tax UOP Cost Depletion and Tax Depreciation are automatically
extracted from Asset Master file


Automated tax overhead allocation process to generate overhead
amounts by well

38

Statutory Depletion


“Revenue vs. Expense” and “Net Income Limitation”
preview reports


Forecast mode statutory depletion calculations


Statutory depletion calculation elements are stored in
AM206.DEPL.RESULTS (ADR) file for query analysis
reporting availability


Post mode ADR data remains on file until same company is
posted for the following year


Asset Master file is updated with allowable percentage
depletion, amounts in excess of net tax basis are stored in
different data field


Asset Master file is updated with carryover amounts

39

Volumes, Income, & Exp./Costs
by Well
OPER, IDC,
& DEPR
'P'ost mode:
Tax Depreciation for 'DEPR' TAG

ASSET.MASTER
COST.
CENTER.
DETAIL
(CCD)
Statutory Depletion
Allowance Calculation
(AM206)
AM.TAG.CALC
Subroutine called by
various processes
System
Posting
(GL210)
Revenue vs
Exp Report
(AM278)
Net Income
Limitation Rpt
(AM279)
Tax Account
Group Data
Entry
(AM168)
ACCOUNT.
SUMMARY
(AS)
TAX.
ACCOUNT.
GROUPS
(TAG)
WELL.TAX.
TYPE
(WTT)
Well Tax Type
Data Entry
(AM165)
AM206.DEPL.
RESULTS
(ADR)
Various
reports from
AM206
DEPLETION.
TEST.
PERCENTAGE
(DTP)
Depletion Test
Percentage
Data Entry
(AM166)
WTT Dict
ID = Co*Well*Fiscal.YE
<1> QUALIFYING.CODE
'Q'ualify fully
'P'artially qualify
'N'on - qualify
<2> TAX.TYPE
'O'ther
'S'tripper
'H'eavy
'F'ixed contract
'G'eothermal
<3> PARTIAL.OIL.RATE
<4> PARTIAL.GAS.RATE
DTP Dict
ID = Co*Fiscal.YE*'FD' or
Co*Fiscal.YE*State
<1> TAX.TYPE (S,H,O,F, or G)
<2> GROSS.INCOME.PERCENT
<3> NET.INCOME.PERCENT
Income TAGs
'OIL', 'BBL', 'GAS', 'MCF'
Expense TAGs
'TAX', 'OPER', 'IDC', 'DEPR', 'OH'
AS Dict
ID = Co*TAG
<1> ACCOUNTs
<2> USAGE
'I'nclude
'E'xclude
ADR Dictionary
(partial)
ID = Cost Co*'G'*Tax Group Ref or
Cost Co*'W'*Well Ref
<2> TAX.TYPE (S,H,O,F, or G)
<5> WELLS
<6 - 9> OIL.VOL, OIL.REV, GAS.VOL, GAS.REV
<10 - 14> TAX, OPER, IDC, DEPR, OH
<17> ASSETS
<18> COST.DEPL
<20> PCTG.DEPL
<21> NET.INCOME
<23> TENT.PCTG.DEPL
<27> ADJ.TENT.PCTG.DEPL
<30> ADJ65.TENT.PCTG.DEPL
<31> ALLOWABLE.DEPL
<32> PRIOR.YRS.CARRYOVER
<34> PRIOR.CARRYOVER.USED
<38> CUR.YR.CARRYOVER
- Allowable pctg depl in
excess of cost depl
- Pctg depl carryover
Tax Overhead
Allocation Data
Entry
(AM169)
TAX.DEPL.
OVHD
(TDO)
Tax Overhead
Allocation Process
(AM269)
UTM
TDO Dict
ID = Co*Fiscal.YE
<1> ALLOC.PCT
<2> OVHD.ACCT
<3> OFFSET.ACCT
<4> ANNOTATION
- Cost depl (Tax UOP)
- Prior yrs carryover
balance
Statutory Depletion Process Flow