Revenue and Royalty Audit

Testimonial – Brian P.

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

Testimonial – Feliz M.

Sincerely I wish more audits were handled in this procedure.

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 – Brandy Bell

The audit was orderly and each request was specific.

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 – Jenni N.

AMS-PAR follows a consistent process. I don't see a reason to change what you are doing.

Testimonial – Tom J.

AMS-PAR uses experienced auditors.

Testimonial – Larry M.

The ability to exchange large data files was very effective.

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 – Corbin B.

The first time I have seen this particular technology.

Testimonial – Terry M.

The last thing a busy oil and gas accountant wants to find in the morning mail is an audit notice.  However, from initial contact through final report, the AMS-PAR audit team was courteous and professional.  Their software, particularly the Information Request (IR)...

Testimonial – Feliz M.

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

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 – 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 – John A.

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

Testimonial – Feliz M.

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

Testimonial – Harry W.

Well done on all fronts.

Testimonial – Brian P.

The data requests are submitted and tracked in an organized manner

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 – 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...

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.