Disclaimer

Morning Discussions Current / Archived Previous Morning Discussions 2010: Jan / Feb / Mar / May 2009: Jan / Feb / Mar / Apr / May / Sep / Oct / Nov 2008: Feb / Mar / May / Oct / Nov 2007: Jan / Feb / Apr / Jun / Oct 2006: Jan / Feb / Mar / Sep / Oct / Nov 2005: Jan / Feb / Mar / Dec 2004: Mar 2003: Feb / Mar 2002: Jan / Feb / Mar / Apr / May / Oct / Nov 2001: Jan / Feb / Mar / Apr / May / Sep / Nov 2000: Oct / Nov May 2010 Re-Visiting the CO&O Agreement The PJVA Model Construction Ownership and Operating (CO&O) Agreement was published in 1999. Many companies have a number of CO&O Agreements that have been in draft form for many years. The PJVA has set up a Task Force to review the need to update the current model CO&O Agreement and is seeking industry feedback regarding issues with the current model CO&O Agreement. Come and give your input. Is the current CO&O model difficult to generate? Are there particular clauses in the CO&O model that companies find objectionable or are commonly rewritten? Are there new clauses that need to be added to the CO&O model? Are there other reasons that companies do not execute CO&O's in a timely fashion? Does the current CO&O model require an overall update? What possible remedies are there? The session will be moderated by Jan McLean who is a member of the PJVA CO&O Agreement Task Force. Top of Page March 2010 EPAP – What the heck is that? The Energy Resources Conservation Board (ERCB) has changed the process for auditing oil and natural gas volumetric data submitted by operators. The Enhanced Production Audit Program (EPAP) is a new measurement and reporting compliance assurance program being introduced by the ERCB. It replaces the current audit program and introduces a new audit methodology for assuring compliance. What is the new process? How are companies meeting their obligations? Who pays for the additional work? Is Partner approval required? What are the JV/Agreement/Measurement implications? Colby Ruff from the ERCB will give an overview of the Enhanced Production Audit Program and the issues they were seeing under the old program. Ib Moller will moderate the session. View March presentation Top of Page February 2010 Mail Ballots and AFEs – Who needs them? Operating Agreements generally require the Facility or Unit Operator to obtain specific approval for Capital or Operating projects above a certain expenditure limit from the Facility or Unit Working Interest Owners using Mail Ballots or AFEs. When are Mail Ballots/AFEs used? Is approval required for the project scope, or for the project expenditure? What occurs if approval is denied? What is a reasonable expenditure limit? How should over-expenditures be handled? The session will be moderated by Crawford Hutchinson from Devon who will discuss his experience with obtaining specific Mail Ballot and Partner AFE approvals. Top of Page January 2010 Annual Operating Forecasts – Who needs them? Many Operating Agreements require the Facility or Unit Operator obtain approval for the annual Operating Forecast from the Facility or Unit Working Interest Owners prior to a date specified in the Operating Agreement. Are Operators providing annual Operating Forecasts? Do the Non-Operators require this information, and if so why? Should similar information be provided under Processing Agreements or in areas without a specific Operating Agreement? What could happen/has happened if the Operator fails to provide an annual Operating Forecast? What are possible next steps for the Operator if the Owners do not approve the annual Operating Forecast? What is the protocol/procedure if the Operator overspends the annual Operating Forecast? Overspends by how much? Is any notice or additional approval required? The session will be moderated by Kimi Rutz from Conoco Phillips who will discuss her experience with obtaining approval of annual Operating Forecasts. View January presentation Top of Page November 2009 Auditing in a Low Price Environment Are auditors looking harder in this low price environment? Overhead charges from third party contractors Administrative services provided as part of third-party contracts Lower materiality threshold – what is reasonable? Audit "information requests" How can we effectively manage audit claims? Is there a disconnect between the auditors and their clients? Are audits being reviewed by JV group prior to submission? What is the role of the JV auditor, vis a vis the role of the operating committee/JV reps? Open Discussion - what audit issues are you seeing? Are they reasonable? The session will be moderated by an Operator (Encana), who will discuss audit issues they are currently facing. Other views (from Non-Operators, Processors and Producers etc.) are encouraged. Please contact Keith Brereton (403-691-2645) if you are interested in representing other views. During the meeting, we will have an open discussion about the issues we are all seeing, and hopefully potential solutions. Top of Page October 2009 Shutting in Wells and Facilities in a Low Price Environment Shutting in Gas Wells Provisions of the Joint Operating Agreement (CAPL) Impact on Royalty Owners and Leases Partner notification Unit considerations Processing agreements Suspension of wells Shut-in Operating Costs Shutting in Gas Processing Facilities Provisions of CO&O Agreement Partner considerations Processing agreements for third parties Notification to owners and third parties Shut-in Operating Costs Producers and Midstreamers speak to their issues re shutting in production; open discussion about the impacts and potential solutions. Links to articles discussed at the session: BD&P Law - Articles and Publications Page Blakes - Oil and Gas Bulletins Page Top of Page September 2009 JV Issues re Conversion to IFRS* (*International Financial Reporting Standards) Background By 2011, all publicly traded companies in North America are expected to switch to IFRS from the current accounting reporting standard. This will have an impact on Joint Ventures, since some things will have to be reported differently than is current industry practice, especially operating costs vs. capital costs. This may require companies to have work practices (capital vs. expense) and issue AFE's for projects that would normally be expensed. For example: Turnarounds: IFRS calls for turnarounds to be capitalized, and amortized over the period (forward) to the next turnaround; turnarounds are currently treated as operating costs in our CO&O's and processing agreements Impact on Producers that are Facility Owners Impact on Midstream Facility Owners Impact on Third Party users of Facilities (processing fees) Affect on Overhead – expense vs. capital Abandonment: IFRS calls for abandonment to be expensed Top of Page May 2009 Processing Fees and Other Fees This will be a general open discussion session to be led by Ib Moller. Some topics to be considered: A trend seems to be developing towards more expensive fees; are producers seeing some “gouging” by processors? JP-05 Fees: are producers seeing higher capital fees justified by higher "Replacement Cost" estimates? What happens when the "Original Cost" is not known? Do operating fees ever go down? Are third party producer fees suffering from declining throughputs? What can be done in the low price environment, when some well owner's production is uneconomic, while other's is un-economic? Questionable fee practices: charging Common Stream Operator fees for each well, duplicate well administration fees (e.g. for gathering and for processing); production accounting fees by owner; etc. Audience discussion of experiences; determine whether any of these issues may warrant a review by the PJVA and/or other industry associations. Top of Page April 2009 Those Pesky Accounting Issues Should a fee be charged to cover the cost of allocation or accounting re-runs, should there be greater accountability to provide accurate and timely production data? Retroactive adjustments: how far back can service agreement fees or equalization costs be adjusted, are these limited to the Statute of Limitations Take in Kind Issues Should producers always be allowed to take their products ion kind at the plant gate? Should minority well owners that take in kind have their own processing contract or be included in the well Operator’s contract? Affiliates: some CO&Os don’t have an affiliates clause: should affiliates pay third party fees if the agreement doesn’t specify otherwise, should an Owner’s Silent Partners be treated as Affiliates or Third Parties Top of Page March 2009 Issues with Annual Budgets What happens if the partners do not approve the annual budget? Will the Operator continue to operate? Will some partners stop paying their share of bills If there are no consequences should the budget be balloted or simply issued for information? Should budgets be issued for each Functional Unit in a plant? Other issues regarding allocating costs to Functional Units Top of Page February 2009 Issues with Greenhouse Gas Credits Plant Operators now have a responsibility to manage Emission Liabilities and Emission Reduction Credits at facilities. Issues can arise regarding how individual Owners handle their liabilities and utilize credits. The focus at this Early Morning Session will be the mechanisms and implementation of the CAPP Guidelines. Top of Page January 2009 Issues with Well Operating Charges Well operating charges made to the Joint Account often result in questions and disputes. The matrix posted below is intended to bring some clarity to these charges. The presenters at the Early Morning Session will welcome your comments and will point out some issues that can often result in a disagreement about what is chargeable versus what the Operator should pay under the Joint Operating Agreement. View Presentations: Presenters Introduction Issues with Well Operating Charges Discussion Notes Well Operating Charges Matrix (February 2009) Top of Page November 2008 Issues with Two Party CO&O’s and Issues with Facilities without CO&O’s Two Party CO&O’s: Managing the Agreement Issues that develop when one party has a small interest. Other Issues Operating Facilites where there is no CO&O Should mail ballots be sent? Should 13th month adjustments be done? How should third party fee revenues be distributed? Other Issues Top of Page October 2008 Gas Gathering System Fee Issues JP-05 Fees: Calculated Fees vs. Distance Based Fees Fees by Single GGS, by Lateral used, or by Segment used? Calculated Fees: Capacity or Throughput based Capacity based - What is capacity? When are calculated fees applicable? Sour Gas gathering Distance Based Fees: $0.20-$0.35/e3m3/km Higher Pressure gathering vs. Low Pressure gathering Operating Costs: Who charges GGS operating costs? Costs allocated to GGS, or to Wells? Cost of pigging Well Flow Lines and Tie-ins Fees for non-participating well owners Ib Moller will moderate this discussion. Top of Page May 2008 The proposed new Well Administration and Production Accounting Agreement A task force is to be formed in the fall, and so this is expected to be an interactive session to discuss the following: Why is this agreement required? What should be included in this agreement? Why can this agreement not be incorporated into existing agreements? How is it different from a Contract Operating Agreement or a Gas Handling Agreement? Other? Jan McLean: Moderator View Presentation Top of Page March 2008 Drafting and Execution of CO&O Agreements CO&O Agreements often exist in draft form for many years after the construction of a facility. Mike Taylor moderated a discussion on the following: Suggestions to improve drafting of CO&O Agreements (PDF) - Members Only Most common basic CO&O drafting errors (PDF) - Members Only Top of Page February 2008 Tie In Agreements Kimi Rutz will moderate a discussion on the following: What is the purpose of the Tie In Agreement? What should it cover? Should there be a standard? Is this a JV Agreement? Who should administer this agreement? Other questions/issues Members of the Agreements Task Force will also be present at this discussion. View presentation Top of Page October 2007 Operator Overhead Issues related to overhead in Joint Venture Operations Doug Gurel will do a presentation and moderate a discussion of the practical issues arising from his years of experience in negotiating Joint Venture Agreements, dealing with audit queries and handling Partner concerns on matters related to Overhead. Top of Page June 2007 PASC Accounting Procedure What does simplification in the Accounting Procedure mean? More clarity? More negotiating room? Specific direction? What does "approval" mean? What are acceptable mechanisms? How do we deal with billing disputes? What is the role of the JV Auditor, vis a vis the role of the Operating Committee/JV Reps? How can we effectively manage audit claims? The push to direct charge more costs: what is the root cause? Should engineering costs be capped? If so, how? If not, why not? Top of Page April 2007 Internal Engineering Costs Some companies are adding a fixed percentage to their AFEs for internal engineering costs; others are tracking and charging the actual hours spent by staff on engineering; while others are simply not tracking or recovering these costs. What is the general practice for charging internal engineering costs? How are charges from engineering alliances handled? What hourly rates should be charged for in-house engineering? What is an appropriate % rate for flat in-house engineering charges? What is appropriate per the PASC Accounting Procedures? Other issues re in-house technical charges Top of Page February 2007 Allocation Issues Daily Balancing vs. Monthly Balancing to Align With Marketing (pros and cons) How is it currently handled? Impact on fees? Can Prism and QByte handle? Allocation Procedures Best practices Fuel Gas Allocation On compressor stations On gathering or sales lines Top of Page January 2007 Abandonment and Reclamation Charges Who pays for Abandonment & Reclamation - Operating vs. Capital costs Changes of ownership – changes of Operator CO&O provisions Partial abandonment of facilities – during facility normal operation Cleanup of spills – during facility normal operation Should we charge Third Parties using the facilities – variable operating costs Midstreamer's responsibilities – charges to users Abandonment and Reclamation Funds Use of abandonment funds in the oil industry Fund complications – taxes, ownership changes Contributions by Third Parties Midstreamer perspective Royalty Trust perspective Top of Page November 2006 The new Gas Handling Agreement - with Linda Green Top of Page October 2006 Well Administration Charges What is the basis for the usual $250/month charge? Is this fee sufficient, or excessive? Should this fee apply to all wells, shallow, sour, CBM? Does each facility operator add their fee (is it cumulative)? Is this charge considered a well operating cost (subject to overhead)? Real Time Production Information What information is the facility Operator obliged to provide? Should information be available to all well owners, or just the well operator? Does the Operator have to communicate with well owners? What agreed to terms to receive the data? What costs should parties share in setting up the real time data distribution? Set up costs? Continuing costs? Do well operators expect to be able to provide direction on how the facility Operator produces the wells or field? Top of Page September 2006 CO&O Agreement Issues Linda Green, BA MBA - Enerplus Resources Fund Silent Partners – rights/obligations, Operator indemnity, ROFRs. Assignment Issues – notices, retroactive effective dates and retroactive use of Capacity Changes to Appendices – voting vs. fact Execution of Agreements – managing counterparts Handling of Appendices – delete vs. N/A View Discussion Notes Top of Page March 2006 Operating Cost Allocation Economic vs. Accounting Fixed and Variable Costs Should Cost Allocation be Based on Throughput ­ User Pay Surplus Capacity ­ What does it really cost? Cost Allocation by Operating Fees Avoiding 13th month adjustments Moderator: Ib Moller, Gas Processing Management Inc. Top of Page February 2006 PASC Accounting Procedure Update PASC is currently updating their model form Accounting Procedure. There are many changes being contemplated. The current draft and a summary document outlining the changes can be downloaded from the PASC website. PASC is looking for comments from industry by mid March. This session will provide a forum for discussion of JV issues with the current Accounting Procedure and ways to address those problems. Top of Page January 2006 PJVA Model Form Gas Handling Agreement Presentation and Discussion View the Powerpoint presentation from the January 11 Morning Discussion. There will be an overview presentation of the new Gas Handling Agreement. Mike Taylor, Brian Zimmer and Linda Green will lead the presentation and discussion. There will be questions from the floor and discussion amongst attendees relating to other issues that might need considering. Top of Page December 2005 13th Month Adjustments Kathleen Grey, Course Developer Kathleen will give an overview of 13th month adjustments and identify common errors. As well, she will address different types of processing fees and their impact on 13th month adjustments. There will be questions from the floor and discussion amongst attendees to identify other issues and approaches with 13th month adjustments. Top of Page March 2005 Large Facilities Liability Management Program Orest Kotelko - CNRL Chairman, CAPP Industry Shadow Group for the Large Facility Liability Management Program Orest will be updating the membership on the status and path forward for the Large Facility Liability Management Program proposed by the EUB. Stakeholder feedback closed on January 28th, and needless to say, there are differences of opinion across the industry. Orest will identify the key issues where consensus exists, and where it does not, so that you are prepared as this program unfolds. Top of Page February 2005 JV Impacts of Greenhouse Gases: Who Pays? Keiren Ferris, Manager of Royalty and JV Policy, Shell Canada Under current government of Canada plans, GHG emissions targets will be set by individual facilities - easy in some industries but a huge issue for an industry where joint ventures are a standard mode of business. CAPP has developed a proposal for sharing GHG costs and credits among JV partners. How would this proposal affect you as an operator, owner or third-party processor in a facility? What will it cost you? Top of Page January 2005 JP-04 Status Update and Various Industry Perspectives John Kingsbury and other members of the Task Force The JP-04 Task Force will soon release its report for industry association comment and input. This is the perfect opportunity for PJVA members to get first-hand details on the content, and hear the Task Force's perspective on how different sectors of our industry (producer operators, non-operators and midstreamers) may have different views on this new report. Top of Page March 2004 Sarbanes-Oxley Act and Bill 198 View the PowerPoint presentation from the March 16 Morning Discussion. This subject is becoming a higher and higher priority as the time to comply with this new legislation approaches and as further guidance and interpretation comes available. The Sarbanes-Oxley Act of 2002 establishes new standards for corporate accountability in response to corporate and accounting scandals in the US in an attempt to restore public trust in corporate accounting and reporting. Similar changes to the Ontario Securities Act and Regulations have also been put in place. Top of Page March 2003 Fee Recovery Is your company recovering all the fees it is entitled to? Do your actual fee recoveries vs your estimated fee recoveries never match? As this is a rather large topic to cover in one breakfast session we will be spreading it over three or four sessions to give it the attention it deserves. Our first meeting is intended to go over how the data bases fit together, an overview and then break it down into: Is your company recovering the fees and charging out the operating expenses and capital dollars you should? The first step is information repair in the databases. Is your company checking the integrity of your databases? Managing your databases. Are you generating exception reports on the data within your databases? Database exception reporting. If you attend only one breakfast session this year this should be the one! We will explain how to start this process within your company so you can recover all the fees you are entitled to. The Early Morning Session (March 25, 2003) topic presented by Rod Swenson, was on the topic of databases related to fee recovery. Thanks to Rod for a presentation which raised a lot of interest from the 70+ attendees. Rod's one page chart and notes follow: (click to see a figure) The Early Morning Planning Group believes there is interest in dedicating two more sessions so that Rod can continue with the same topic and address special interests. Tentative dates are April 22 and May 27, 2003. To be confirmed closer to these dates. Top of Page February 2003 THE C2C TASK FORCE & "NEW SKILLS FOR RESOLVING DISPUTES" Resolving disputes through negotiation is something we do every day, at work and at home. The process and communication skills used by mediators in helping others resolve disputes can be learned and applied by each of us to improve our own effectiveness in negotiations. JIM WILLSON (lawyer, mediator, arbitrator, instructor and coach) will review the four-stage interest based negotiation/mediation model and demonstrate the use of these communication skills in a simulated mediation with representatives (PAT FORREST - PJVA Rep and GEORGE GREEN - CAPLA Rep) from the COMPANY TO COMPANY (C2C) APPROPRIATE DISPUTE RESOLUTION TASK FORCE. Join us for an entertaining and informative morning session. The C2C TASK FORCE is here to promote some ideas of how disputes may be avoided or resolved at an early stage before they develop into overwhelming problems. We promise to leave you with at least one new skill to try out on your co-workers and partners (and even your family). Top of Page November 2002 ISSUES RE PROCESSING AGREEMENTS Do we really need separate Gas Processing and Gas Transportation agreements Should processing agreements be with the well operator on behalf of the well owners, or with individual owners? Has anyone ever tried to make the LIFO (last in first out) priority provision work? What about joint production from the wells? Standard Terms and Conditions Task Force - what are they doing? OTHER PROCESSING ISSUES from the attendees - Discussion Top of Page October 2002 VIPER - Volumetric and Infrastructure Petroleum Information Registry - update Analysis and Measurement - The reality of Operator and Producer compliance at JV facilities A&D - Understanding the responsibilities for paying JV billings after closing Affiliates - How to correctly deal with them (capacity, priorities, ROFR's, etc.) Audit Principles - continuation of November discussion - to discuss standards, scheduling, responses to exceptions and improved methods of conclusion One year later - a look at Statute of Limitations or Power Deregulation or both Top of Page May 2002 PANEL DISCUSSION OF JOINT VENTURE HOT TOPICS Join us for a panel discussion of shared joint venture concerns On the panel will be: Doug Phillips - Manager, Joint Ventures - Canadian 88 Energy Alan Harvie - Partner - MacLeod Dixon Cheryl Pritchard - Manager, Foothills Business Development - Keyspan Energy Canada Inc. Doug Sick - Joint Venture Representative - Talisman Energy John Kingsbury - Principal - Gas Processing Management Inc. Up for discussion will be: JP-95 - Current interpretations in the industry (used well or abused?) Emulsion handling and water disposal fees - How should these fees be calculated to be fair to both Producer and Operator? Midstreamer and Producers Owners - Will marriage work or will we just be friends? Right to take in kind - Who decides; Processor, Well Operator or Working Interest Owner? Administration fees - What do you get for $250/w/m? CSO fees - When is it appropriate to charge to third party processors? Bring your own questions, concerns, or comments on any joint venture topic that you are looking for some input into. This is the last session until the fall. The committee is looking for some new members and/or ideas! Top of Page April 2002 THE PETROLEUM REGISTRY OF ALBERTA Fred Lavitt, Interoperability and Implementation Manager for the Registry (formerly known as VIPER) project on behalf of the Government of Alberta, will be joining us to lead a discussion on the implementation of the Registry process in our industry. The industry testing begins in April 2002 wi th full implementation scheduled for October 2002. This Registry project represents a significant amount of change for most companies. Will you be ready? Fred will discuss: What is the Registry? What are the benefits to Industry? What are the "Hot Topics"? How could your company be impacted? What could the effect be on Joint Venture properties or roles? We'll also be given a "peek" at the Product. Bring any of your own concerns, questions or experiences on how this subject has affected you and your company and share with the group any advice on making this implementation as smooth as possible for all concerned. Top of Page March 2002 LIFE WITHOUT AN AGREEMENT John Stayura, of Tom Brown Resources Ltd. and co-author/co-instructor of the new PJVA CO&O course will be joining us to lead a discussion on a situation we have all encountered in our joint venture careers - conducting our joint business without an agreement in place, especially a CO&O agreement. John discussed: Key terms that are effected by the lack of an agreement Common law treatment of a facility with no agreement Alternatives to a signed CO&O agreement - pros and cons How enforceable is a draft agreement? What about service agreements (or lack thereof)? Top of Page February 2002 MIDSTREAM PROCESSING IN JOINTLY OWNED PLANTS Sharing of processing revenue vs streaming of processing revenue Wellhead purchases or buy/sell arrangements for non-Owner production "Firm Pool" for processing within a joint venture plant Priority of processing for non-Owner gas Enlargements, or capital expenditures for non-Owner processing Top of Page January 2002 The Custom User Audit Committee, a subcommittee of the PASC Joint Venture Audit Committee (JVAC) and the Petroleum Joint Venture Association, has drafted Custom User Audit Guidelines currently being reviewed by PASC. This project commenced by soliciting concerns surrounding Custom User audits within the industry, the results of which were published in the PASC and PJVA newsletters. Based on industry feedback, Guidelines for administering and conducting Custom User Audits were drafted, which we feel meet the requirements of industry today. The Guidelines are divided into four sections; Protocol, Procedures, Confidentiality and Resolution. All sections, except for Procedures, are quite unique to Custom User audits and a summary of each will be presented by Kathleen Grey, audit consultant; Bill Harvey, Council - JV Contracts for Chevron Canada Resources and Noel Smyth, Manager of Operations Services for Keyspan Energy Canada, before opening the floor for discussion. Top of Page November 2001 SETTLING ACCOUNTING ISSUES MATERIALITY What is material enough to require a settlement? What is material enough to require a rework of previous product allocation? Audit protocol PRECISE ACCOUNTING vs SETTLEMENT Does every error have to be precisely corrected? - settlement vs rework. How far back should we correct? - legal and moral obligations. Production accounting reworks - settlement by cash or by volume BENEFICIARIES OF SETTLEMENTS How do all past owners/parties receive benefit (cost)? Operator's obligations to allocate settlements? - current or past owners Other affected parties - royalty owners, the Crown RIGHT TO PROTEST BILLS Withholding payment Right to offset Agreement provisions Moderated by: Ib Moller, Gas Processing Management Inc. Assistance: Lynda MacNeill, PanCanadian Energy Top of Page September 2001 INDUSTRY EDUCATION PROGRAMS - ARE WE SERVING YOUR NEEDS? To start off this year, we will be looking at education programs offered by the various industry associations. There will be representatives from some or all of the following associations: Petroleum Accountants Society of Canada (PASC) Canadian Association of Petroleum Production Accounting (CAPPA) Canadian Association of Petroleum Landmen (CAPL) Canadian Association of Petroleum Land Administration (CAPLA) and of course, PJVA. The first part of the session will be an opportunity for the individual associations to give a ten minute overview of their educational offerings for the coming year. The last half of the session will be more interactive. Now that you know what is available, tell us what we are doing well and what we can do differently: What are you looking for in education opportunities that will help you do your job better? Subject matter Length (how many days?), duration (how many hours/day?) Class size Type of instructor (volunteer or professional?) Type of notes/handouts Location Cost Credit/Non-credit Top of Page May 30, 2001 Payout Accounts Joining us this month is Jim McLean. Jim is the Land Manager at Chevron Canada Resources and the principal draftsman of the 1990 CAPL Operating Procedure, the 1997 CAPL Farmout & Royalty Procedure, the 2000 CAPL Property Transfer Procedure and the pending update to the 1990 CAPL Operating Procedure. He will be presenting an overview of payout mechanisms under farmout agreements and the CAPL Operating Procedure including: traditional cost recovery mechanisms and their deficiencies; volume based alternative; and status of update work on the 1990 CAPL Operating Procedure respecting the production penalty mechanism Top of Page April 25, 2001 Energy Utilities Board's Appropriate Dispute Resolution (ADR) Initiative Joining us this month will be Bill Remmer from the EUB and Dave Savage from BXL Energy to speak on the new EUB dispute resolution initiative. Both of these people were involved from the beginning on the committee which guided the formation of the process now used by the EUB. Informational Letter 2001-1 titled Appropriate Dispute Resolution (ADR) Program and Guidelines for Energy Industry Disputes was issued January 8, 2001. This regulatory document formalizes the use of ADR and explains the Board's expectations and requirements. The goals of the EUB ADR program include: improved landowner-industry relations in the interest of all Albertans better use of the EUB's and stakeholders' time and other resources more face-to-face discussions between affected landowners and company decision-makers, leading to local solutions to local problems enhanced efficiencies in the effort to meet the needs of stakeholders in the electricity and upstream oil and gas sectors increased resolution of industry-to-industry disputes without an EUB hearing a more effective and efficient hearing, if one is necessary. Come learn more about this ADR process, how it has been utilized so far, their successes to date and how they see the process evolving. Come participate in a discussion on how this method of dispute resolution will affect our Joint Venture dealings in the future. Top of Page March 2001 This month we are trying something new! There will be a panel of JV professionals who will discuss (and encourage discussion of) various Joint Venture issues of their choosing and your choosing. What we hope to accomplish is to have a quick look at several topics that will not fill a whole session but that do deserve some air time. Some of the issues that have been put forward for discussion: What to do when your voting procedure fails (old agreements, not enough parties left)? Common Stream fees, or Alliance fees proposed by some processors Differential processing fees for Owners vs. non-Owners (eg. 15% vs 20% ROR) What can be done to increase the confidence level of Operators and non-Operators that the facility $ values they are reporting to their insurance company accurately reflect the facility's true replacement cost? How to optimize the process so that a non-Operator can take over suspended Unit wells for uphole potential? What obligations (if any) does the Operator have to share technical information with the uphole Owners as to the condition of the wellbore and the lease? How are the model PJVA agreements working in the industry? We want to spend 10 or 15 minutes on each topic and move on. If you have any questions that you would like addressed, please leave them with the PJVA office when you register or e-mail them to pforrest@telusplanet.net. Facilitated by: Pat Forrest, Northern Cross Resource Management Inc. Panel: Robert Foster, Anderson Exploration Ltd. Storm Purdy, ATCO Midstream Ltd. (and Vice President, PJVA) John Stayura, Joint Venture Management Inc. Top of Page February 28, 2001 13th MONTH ADJUSTMENTS - IS THERE A BETTER WAY? PROBLEMS WITH THE CURRENT WAY Timeliness of adjustments - within three months of the end of the year? Missed costs - non-capital AFE's Retroactive processing fee adjustments - ownership changes Changes of Operator during the year Are retroactive adjustments fair and equitable? A PROPOSAL FOR A BETTER WAY Charge Operating Costs fee to throughput Adjust forward, not backwards The Rimbey and Strachan experience - a three year rolling average Relative size of adjustment Throughput adjustments should not apply to minor gathering lines REVISION OF CURRENT AGREEMENT PROVISIONS Need for an Industry Task Force to develop provisions Revise individual agreements, or by Industry Agreement? Moderated by: Ib Moller, Gas Processing Management Inc. Assistance: Blaine Clarke and Noel Smyth, Keyspan Energy Canada Top of Page January 31, 2001 Limitations Task Force and the resulting Industry Agreement regarding the Limitation Act Please note this topic has been changed from the previous notices. A discussion on Payout Accounts has been moved to May. On March 1, 2001, the new Limitation Act comes fully into effect in Alberta. Under the new Act, all actions must be commenced within two years of when the claimant knew or ought to have known of its claim. Industry standard auditing procedures and industry agreements currently establish a process for the conduct of audits which might result in claims becoming statute-barred before the audit occurs. In response to an industry survey, PASC formed a Limitations Act Task Force with a number of individuals presenting a number of key oil and gas companies and certain industry associations including PASC, CAPL, CAPLA and PJVA to find an industry wide solution to the limitation problem. Jay Park, a director of PASC and a lawyer with Macleod Dixon, will be on hand to present the results of the Task Force and the resulting Industry Agreement. Additional information on this initiative can also be found on the PASC website (www.petroleumaccountants.com) or PJVA website (www.pjva.ca) How is your company going to handle this situation? The agreement must be signed by February 15, 2001 in order to effectively amend the tens of thousands of agreements that require amending. Come share your questions, concerns and observations. Top of Page November 29, 2000 Possible Impacts of Power Deregulation on the Joint Account This topic was addressed at the October PJVA luncheon and is still generating a lot of discussion. What does the CO&O say about purchasing power for facilities? What approvals are required, if any? Do we ride the wave of prices and pass on what we are billed or do we become brokers where we buy and sell as required? If we become brokers do we pass on the ups and downs to partners? Or do we take the profits and losses? Do we do an equalization at the end of the year for our cost of power? Maybe we need to set a benchmark for the cost of power which companies profit from if they are below and absorb the cost if they are above. What standards, if any, needs to be addressed/implemented by the industry to avoid possible problems down the road (at audit time, for example)? How is your company going to handle this new situation? Come to share your questions, concerns and observations. Top of Page October 25, 2000 Preliminary Results of CAPP Road Use Task Force Report John Winton of Husky (Renaissance) and Don Snowdon of Northstar are representatives from the task force and both have 20 years experience as surface landmen. They have been responsible for numerous road use negotiations. They will be at the meeting to present some preliminary results and to lead the discussion Find out their recommendations and findings Share your questions, concerns and observations All Contents Copyright © Petroleum Joint Venture Association. All Rights Reserved. Professionally Managed by Associations Plus Inc.