Revenue and Royalty Audit

Testimonial – Mark J.

My company has used AMS-PAR for Oil and Gas Joint Venture Audit services for the last 8 years.  We are extremely pleased with the professionalism demonstrated by all of AMS-PAR’s employees and contractors.  My company is also very satisfied by the results and findings...

Testimonial – Feliz M.

I do all of our audits and this was an amazingly different audit process and experience

Testimonial – Jerry b.

Very professional and responsive.  I can always count on their guidance when it comes to Oil and Gas Accounting matters. I love working with the AMS-PAR team!

Testimonial – Harry W.

Well done on all fronts.

Testimonial – Janet R.

The lead auditor conducted the audit in a very professional way, and always kept the communication channels open for discussion, feedback, and questioning.

Testimonial – Feliz M.

Sincerely I wish more audits were handled in this procedure.

Testimonial – Brian P.

The field lead was very efficient and knowledgeable that minimized business disruptions.

Testimonial – Melanie G.

We were extremely grateful to work with someone as professional and knowledgeable about our industry.  We hope to work with your group again in the near future!!

Testimonial – Corbin B.

The first time I have seen this particular technology.

Testimonial – Tom J.

The audit was scheduled well in advance and an experienced revenue auditor did the audit.

Testimonial – Misty C.

The exchange of information is effortless.

Testimonial – Melanie G.

We were extremely grateful to work with someone as professional and knowledegable about our industry.

Testimonial – Robert G.

AMS-PAR's vast experience allowed it to easily spot large revenue deductions charged to my company incorrectly.

Testimonial – Brian P.

The field lead was very efficient and knowledgeable that minimized business disruptions.

Testimonial – Ashley O.

All requests were clearly communicated and labelled. This made it simple to plan and allocate our resources required to complete tasks, as well as respond efficiently. Any correspondence was easy to track with the use of request numbers and upload system.

Testimonial – Terry M.

The AMS-PAR audit team was courteous and professional.  Their software, particularly the Information Request (IR) system, provided effective communication, efficient data transmittal, and accurate tracking.

testimonial – Melissa Walker

A one stop shop basically. Love the ease of being able to respond with all files and text in one place.

Testimonial – Kevin A.

It has been an absolute pleasure working with AMS-PAR on this assignment, certantly a well managed, professional, and efficient operation.

Testimonial – Mike M.

My team respects AMS-PAR's work and has never had issues with documentation.

Testimonial – Tom J.

The auditor was industry experienced. Due to the complexity of the revenue distribution, it was helpful that an experienced auditor did the audit.

Revenue Sources

Revenue streams and cash payments are generated from the sale of a product or service, or from the exchange of knowledge or access rights.  Distributions are governed by revenue sharing agreements, operating agreements, and lease agreements with unique marketing and commercial terms that may include references to specific indices, allowable deductions, and complex computations.

What is a Revenue Audit?

A revenue audit determines whether or not revenue and royalty distributions were computed as required in the underlying agreements.  The examination often requires the auditor to create a model of the measurement / custody transfer points, allocation methods, shrinkage factors, allowed deductions, pricing terms, and other factors so that the derived value due can be compared and contrasted to the revenue payment made.

Candidates for revenue and royalty audits include the following agreements:

  • Royalty Leases
  • Product Purchase and Sales Agreements
  • Gathering and Transportation Agreements
  • Net Profits Agreements
  • Gas Processing Agreements
  • Process Handling Agreements
  • Gas Balancing Agreements
  • Plant Ownership Agreements

Why Conduct a Revenue or Royalty Audit?

Validating payments is nearly impossible without conducting an audit.  Remittance statements are summarized, and the data needed to gain assurance that payments were made correctly are not generally available without conducting an audit.  Computations are complex and unique, even when parties own an interest in the same asset.

An audit will assess the appropriateness of and help clients understand:

  • Volumes sold
  • Product pricing
  • Deductions taken
  • Taxes paid
  • Allocations between plants and leases
  • The interdependencies of data and various agreements
  • Why the check detail prices differ from index prices

Why AMS-PAR?

The skills and knowledge needed to conduct an effective revenue audit are acquired over time.  AMS-PAR staff have that expertise and are able to analyze the most complex revenue and royalty distribution contracts.  Our systems and programming skills facilitate our audit work and allow us to analyze very large datasets.

The largest energy companies, royalty trusts, government agencies, and net profit interest owners entrust AMS-PAR to ensure revenues and royalties are properly allocated and paid.  They rely on AMS-PAR’s methodologies to ensure they paid revenues correctly and their interests are protected.

Our report will detail computation errors, provide guidance to facilitate collection efforts, and recommend improvements to business practices and commercial terms to minimize future payment discrepancies.