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Government Royalty Reconciliation

Royalty reconciliation that replays the government's invoice well line by well line, term by term, from your own records.

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Follow the propane gap from 06:48 to 09:45 ↓
The problem

The allowance dropped off the propane line, and the total still looked fine

The plant accountant sends the volume statement through the portal, allowance costs go in once a year under each stream's code, and the government builds the invoice from its own rates and reference prices. Royalty accounting loads it, compares stream totals against the accrual and samples a few wells, because nobody reads every well line every month.

So when a stream moves to a new code and its filing stays under the old one, the allowance quietly leaves the bill. A big movement gets chased by email, the evidence comes from four systems, and the letter is written by hand. Older periods wait for consultants, long after the dispute window shut.

Built forRoyalty accountantsRoyalty supervisorsGas plant accountantsTax and royalty counselInternal auditors

The Problem Today

The invoice runs to thousands of well lines, so people check totals and a missing term gets paid.

2,904
hours a year to read every well line, at 3 minutes each our estimate

Checked by hand today

  • Volumes
  • Rates
  • Prices
  • Allowances
  • Filings lose their streamA code changes, and an allowance can drop off the bill
  • Late filings cost moneyA missed deadline brings a penalty notice of its own

The Solution

  1. Replay each lineVolume, rate, price and allowance rebuilt well by well from your records
  2. See the term that differsEach term opens the page behind it, and the gap stands alone
  3. Both tables, side by sideOlder wells replayed both ways, before the first new invoice
  4. Dispute drafted, people signAn accountant confirms, a supervisor countersigns, a person files

Built-in controls

  • No signature until its signer has opened the record
  • Agents show the terms and never file
  • Legal and safety questions reach a person

What You Get

Royalty accountants claim back what they can prove, and see a table change before it is billed.

  • Gaps raised both waysWhen the company owes more, it says so the same way
  • Each well line readThe whole invoice, monthly, rather than a sample
  • Evidence in one fileTerms, records and who opened what
One stream, one morning

Royalty reconciliation of the propane line, from replay to filed dispute

The propane stream at the gas plant moved to a new code, and the allowance filing stayed under the old one. The invoice came in with no allowance term on 968 wells. This is the morning the gap is found, proved, signed and filed.

demoThe field, the plant, the people, the royalty tables and the money are sample data.

  1. 01Morning

    Two rows of five boxes, and only the allowance disagrees

    Royalty accountant

    The line opens as a live equation: volume times rate times price, less the allowance. The top row is the government's invoice, the bottom row is rebuilt from the plant statement, the sample table, the reference price and the accepted filing. Volume, rate and price match. The invoice shows none where the filing allows $2.50 a barrel, and $41,280 stands out.

  2. 02Morning

    4,840 well lines read: 2,604 match and 2,236 differ

    Royalty accountant

    Across the whole invoice the replay lands $35,798.57 below what was charged, in five differences. Each has a term, a count of well lines, a person and a clock. One runs the other way: a late plant amendment means the company owes $7,709.39, and the screen raises it on the same footing as the gaps in the company's favor.

  3. 0309:15

    No filing matched to the new stream code

    Royalty accountant

    She opens the invoice term herself. The propane row reads none shown, and the government's own note on the line says no filing matched the new code. Her opening is logged with the time, and only her own openings count toward her sign-off. Volume, rate and price on the same page agree with the replay.

  4. 0409:21

    Page 7 of the filing still lists propane under the old code

    Royalty accountant

    On page 7, the accepted allowance filing allows $2.50 a barrel for propane, filed under the stream's old code. A month earlier that allowance was on the invoice. The agents call the code change their reading of why, and say only the government can tell how its own system handled it. She confirms the gap at 09:24.

  5. 05After 09:24

    Not linked, and the next invoice would repeat the gap

    Royalty accountant

    The filings screen shows the stream with no filing behind it. If the plant accountant does not link the filing to the new code before the next cut-off, the following invoice will likely leave the allowance off again, at about the same amount. Until it is linked, the supervisor cannot close the month.

  6. 06Mid-morning

    Her checklist has four boxes, and the letter is one of them

    Royalty supervisor

    The supervisor cannot use the accountant's openings. She must open the invoice, the plant statement and the filing herself, and the letter too, because the letter is part of what she signs. It was drafted by the agents at 06:48 and is locked for her. Only the accountant edits it, and every edit is logged.

  7. 0709:42

    Countersigned, and the agents still cannot file

    Royalty supervisor

    With all four opened, she countersigns version 1 of the letter, with its fingerprint. The case reads countersigned, to file. Filing happens in the government portal, by a person. The invoice is still paid in full by its due date, and the disputed amount is held as a receivable until the government replies.

  8. 0809:45

    Five lines tell the case, from draft to filing

    Internal auditor

    Searched by case number, the trail reads in order: the agents drafted the letter, the accountant confirmed with her reason, the supervisor opened the letter, countersigned version 1 and filed it. The company's share of the $41,280 is $36,120, and the partners' $5,160 goes back through joint billing.

  9. 09Afternoon

    334 older wells pay more under the new table, and 321 pay less

    Royalty supervisor

    Before the first invoice under the new sample table, each producing older well is replayed both ways at the month's volumes and prices. The change is +$49,777.93 a month at 100%. Counted to the sale of one unit, next year's budget comes to $317,814.95 at the company's share, a forecast she signs before it goes in.

Five differences in one royalty reconciliation, both ways

The replay's net gap is these five, added as they fall. The company owes on one of them.

Propane: allowance term missing$41,280.00
Butanes: last month's price on one pad$876.52
Sulfur: allowance from before the amendment$1,088.64
212 small well lines, accepted in bulk on a sample$262.80
Residue gas: one pad's volume behind the statement, owed by the company−$7,709.39
Net gap, charged less owed$35,798.57

demoSample data, from the working solution.

Where the new sample table moves money, band by band

Older wells by raw gas a day, at the month's volumes and prices. Wells that were down are left out.

Raw gas, Mcf a dayOlder wells producingChange a month
Under 150321−$16,424.43
150 to 299300+$53,754.36
300 to 49931+$9,562.65
500 to 7993+$2,885.35
All bands655+$49,777.93

demoSample data, from the working solution. The tables are sample tables; the customer loads the government's own.

Around the invoice

Plant shares, penalty notices, wells and the rules behind the replay

What the plant accountant, counsel and the supervisor work from in the same month.

Plant streamsThe plant's inlet split back to the field's wells and outside producers, stream by stream. Residue gas was amended after the cut-off, which is the volume the company owes on.
Penalty notices$17,892 in three notices, each with the agents' reading of whether it can still be reversed. Counsel decides; until then, none enters the month's close.
Wells1,061 wells, 968 on this invoice, each with its own sample rate worked out. Open a well to see its by-product royalty by stream.
The agentsWhat each agent read overnight, what it found, who it handed to and what it may not do. Its sureness figures are labeled sample data.
Questions sent to a personA legal or safety question goes word for word to a named person, and the assistant sends no data back with it.
SettingsThe accountant or plant accountant proposes a rule and the supervisor signs it. A looser rule waits until no check is open, and only counsel changes the pay-in-full rule.

demoSample data, from the working solution.

Who confirms a royalty dispute, who countersigns, and who files

Openings count only for the person who made them. A send-back clears both signers' openings.

Royalty accountant
Sees
The replayed line, the invoice, the plant statement and the filing
Signs
Confirms each gap after opening its records, and edits the letter
Royalty supervisor
Sees
The same records and the final letter, opened by her
Signs
Countersigns, files in the portal, approves payment and closes the month
Gas plant accountant
Sees
Plant volumes, late amendments and the filing behind each stream code
Signs
Confirms volumes and links allowance filings to stream codes
Tax and royalty counsel
Sees
Legal questions and penalty notices, with the agents' reading marked as no advice
Signs
Decides on notices and refusals, and settles disagreements
Internal auditor
Sees
Every opening, decision and agent step
Signs
Nothing: samples and exports evidence

The calls on a government royalty invoice that stay with people

Seven agents read, rebuild and draft. A person decides each of these.

Whether a gap is realThe line replayer shows the terms and decides nothing. The accountant confirms after opening the records, or says why it is no gap.
Filing the disputeThe dispute writer drafts the letter from confirmed terms. A person files it in the government portal after the countersignature.
What a notice means in lawThe notice watcher reads deadlines and notices, and counsel decides what to do about each.
A volume or a filing linkThe plant share checker never changes a volume, and the filing matcher never files or amends. The plant accountant does both.

Four systems behind each replayed well line

The agents read them; people file and pay.

Government royalty portalInvoices, reference prices and notices, read only
Hydrocarbon accounting systemPlant statements and well volumes, read only
Document management systemAllowance filings and letters
ERPLedger, vouchers and payments, a voucher only after two signatures

What royalty accounting asks about replaying the government's invoice

What is government royalty reconciliation?

Government royalty reconciliation checks the royalty invoice a government issues against the company's own volumes, rates, prices and allowances. Here agents replay each well line term by term and show where a term differs, with the record behind it. People confirm, countersign and file any dispute.

How does it catch a royalty allowance filing that no longer reaches the invoice?

The filing matcher ties each stream code on the invoice to its accepted filing every month. When a code changes and the filing does not follow, the stream shows as not linked, with the plant accountant's deadline before the next invoice repeats the gap.

Is the invoice paid while a royalty dispute is open?

In the working sample, yes: counsel's rule is to pay in full by the due date and hold the disputed amount as a receivable, which comes back as a credit if the government agrees. Only counsel can change that rule.

Does it handle by-product royalty as well as gas?

Yes. The invoice carries residue gas, propane, butanes, pentanes plus and sulfur, and each is replayed with its own volume, price and allowance. In the sample, by-products pay the well's gas rate, and the screens say real rules differ by stream.

What happens when the company owes more than it was billed?

The same thing in the other direction. A late plant amendment that leaves the company owing becomes an amended filing, raised and signed the same way as a dispute.

Whose royalty tables does it use?

Your government's. The working sample uses plainly fictional sample tables, labeled on screen, and each customer loads the government's own tables, rate rules and reference price feed.

Hydrocarbon Accounting, Joint Ventures & Land

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