Revenue and Royalty Audit

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 – Feliz M.

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

Testimonial – Tom J.

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

Testimonial – Robert G.

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

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 – Brian P.

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

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.

Testimonial – Brian P.

The data requests are submitted and tracked in an organized manner

Testimonial – Romina S.

The AMS-PAR process is effective and clear. All of the data was easily exchanged through a portal removing the need for postal service.

Testimonial – Tom J.

AMS-PAR uses experienced auditors.

Testimonial – Kelvin A.

It has been an absolute pleasure working with AMS-PAR on this assignment, certainly a very well-managed, professional and efficient operation.  The AMS-PAR audit team was fantastic to work with. We certainly will keep AMS-PAR in mind for future engagements

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 – 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 – John A.

AMS-PAR's IR system helps me prioritize my work.

Testimonial – Mike M.

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

Testimonial – Joe D.

I want to thank you and your company for the service that the audit team provided. I could not have done what they are doing without their help and support.  I have enjoyed working with the team and appreciate the approach taken to get into the meat of the project.

Testimonial – Robert G.

As a revenue auditor I did not realize the significance of field asset verification until I hired AMS-PAR to assist me.  AMS-PAR conducted a field office and discovered a Sales Meter on every pad that was not accounted for in the Schematics.  This oversight...

Testimonial – Juliet E.

AMS-PAR's auditor was great, and was clear and concise with her requests. She was a pleasure to work with.

Testimonial – Lisa R.

The audit staff were polite and professional. Lisa R.

Testimonial – Feliz M.

AMS-PAR's systems make exchanging documents easy and improves organization eliminating the need for email communication.

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.