Gulf of Mexico Deepwater Project
Like most deepwater projects, our client’s asset has produced substantial amounts of oil and gas since it came online. As a result, it has generated hundreds of millions of dollars in revenue to working interest owners and tens of millions in royalty obligations. After receiving several undesirable audit determinations, Corvus was engaged to conduct a five-year audit. Our charge was to design and implement new processes and valuation models that would deliver accurate regulatory reporting while also identifying previously overlooked opportunities to maximize deductions.
Results By the Numbers
Recouped $4 million+ in royalty refunds or savings
Anticipate $3.5 million+ in future savings from Corvus model implementation
Overturned a $500k ONRR interest invoice due to erroneous audit determination
How we won for our client
Corvus created a customized, full-cycle accounting model capable of generating production allocations, accurately booking revenue, and ensuring regulatory compliance with royalty reporting obligations.
Our customized and proactive approach included:
- Development of a proprietary regulatory valuation model
- Redesign of revenue accounting system
- Creation of new monthly processes and procedures
- Generation of monthly revenue system uploads to accurately book revenue and account for the differences in regulatory valuation and actual revenue.
- Review of regulatory and operational contracts and agreements
- Review of commercial agreement and marketing arrangement review
- Reconciliation of volumes and invoices