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Reserves Audit

Reserves audit software that runs six tests on each estimate in the book, so the internal auditor raises findings from pages she has opened.

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Follow tract 9-17 from the wall to a closed finding ↓
The problem

The outside reserves audit reads the big fields and trusts your interest table

An outside reserves auditor gives priority to the largest properties and may accept the ownership and production a company hands over without checking them. So the long tail of small, steady estimates goes unread, and an interest table that missed an amendment overstates every estimate on that tract, audited or not.

An internal team cannot pull the title file, the study and the production history for thousands of estimates by hand. Where evidence is missing, a sampling review simply passes over it, and the error surfaces later as a revision the committee has to explain.

Built forInternal reserves auditorsReserves audit managersReserves engineersLand and title analysts

The Problem Today

Outside reserves audits cover most of the book and take ownership as given, so stale interests go unread.

80%
at least: what an entity reserves audit should cover published
983
hours to test 1,474 unread estimates by hand, at 40 minutes our estimate

Gathered by hand for each estimate

  • Title files
  • Studies
  • Production
  • Licenses
  • Ownership taken on trustOutside auditors may accept interests without checking
  • Gaps read as passesMissing evidence is skipped, not counted

The Solution

  1. Every estimate loadedFrom the reserves database, each tied to its title, study and production
  2. Six tests on eachOwnership, study age, decline, category, price and license term
  3. Interest checked at sourceThe database interest against the latest amendment, page cited
  4. Findings go to their ownerAuditor raises, the engineer or land records answers, a manager closes

Built-in controls

  • Could not test never counts as a pass
  • No one checks a finding they worked on
  • Bulk acceptance only after a sampled check

What You Get

Corrections reach the reserves database before filing, and the opinion rests on tested evidence.

  • A test card per estimateSix results, each tied to the page it came from
  • Gaps with ownersCould-not-test items requested and tracked to a date
  • Working papers as filesFindings, samples and the audit trail, exported
One finding, start to close

An internal reserves audit finds a trusted interest 8.6 million boe high

Year-end preliminary reserves are in: 1,120.0 million boe net in 3,480 estimates. The outside audit covers 82% of the volume. The largest failure the agents find sits inside that 82%, on an input the outside auditor took on trust.

demoThe company, its blocks, its staff and its numbers are invented sample data.

  1. 01Before the first finding

    3,480 estimates on one wall, and 201.6 million boe nobody outside reads

    Internal reserves auditor

    Each tile is one estimate and each cell one of six tests. The wall falls into three bands: 612.6 million boe reviewed in depth by the outside auditor, 305.8 in its scope but taken on trust, and 201.6 outside it, 18% of the volume. Beside the wall, the audit program counts 153 estimates that fail and 313 that could not be tested.

  2. 02Minutes later

    Show the ownership test alone, and the trusted band turns red and purple

    Internal reserves auditor

    One click narrows each tile to its interest cell. Ownership has 43 failures and 107 estimates it could not test, scattered through all three bands. Purple means the evidence was missing, and it never turns green on its own. Here the auditor sees where a stale interest table would hide, including inside the outside auditor's scope.

  3. 03First look

    The largest estimate in the book fails on the input nobody checks

    Internal reserves auditor

    Tract 9-17 carries 40.0 million boe at a 62.5% interest, accepted on trust. The ownership row fails: the database says 62.500%, and the third amendment leaves 50.000%. Study age fails too, at 12.7 years. Decline passes at +2.7%, so the tract produces as forecast. The barrels are real, and the share booked against them is wrong.

  4. 04Before raising

    Raising the finding is refused until she opens both pages

    Internal reserves auditor

    She presses raise straight away, and the tool says no: a finding goes out only after the auditor has read what it rests on. The dialog names the two pages still unopened, the reserves database extract and the amendment. The finding is the auditor's word, so it has to rest on her reading and not on the agent's.

  5. 05Pages open

    The third amendment hands 12.5% of tract 17 to the partner

    Internal reserves auditor

    The page viewer opens on page 2 of 6, with the lines that matter marked: the assignment of a 12.5% participating interest, and both parties at 50.000% once the earning obligation is met. The tag reads opened. With both pages read, she raises F-001 to land records, 8.6 million boe too high across three estimates.

  6. 06With the owner

    Land records confirms the amendment the database never heard about

    Land records analyst

    The finding reaches the person who owns the title record, not the engineer. He sees the proposal, the three estimates and the auditor's note on what she opened. His choice is to confirm the record the agent read, or to disagree with the record that supersedes it. He confirms: the earning notice is recorded as LR-09-0417.

  7. 07Same morning

    43.0 becomes 34.4 million boe, changed by the engineer who owns it

    Reserves engineer

    Land records has confirmed, so the engineer's next step reads revise the estimate, with the effect stated: 43.0 million boe to 34.4, down 8.6. The agents never touch the reserves database. The engineer makes the change there herself, and the thread keeps each step in order, with who did it.

  8. 08Review

    Accept stays shut until the auditor opens the revised record

    Internal reserves auditor

    Both owners have answered. The auditor tries to accept the reply, and the tool asks her to open the revised record first, because a reply is accepted only once she has seen the change it made. She opens it, accepts, and the finding goes on to the reserves audit manager.

  9. 09Check

    The manager opens the change record, then closes F-001

    Reserves audit manager

    Closing works the same way: the manager opens the revised record first. It shows three estimates, 40.0 to 32.0 million boe, 2.5 to 2.0, and 500 to 400 thousand boe, with the interest moved from 62.500% to 50.000%. He closes the finding, and the thread now ends with his name and net down 8.6 million boe.

  10. 10After closing

    Net proved reserves now read 1,111.4, and the opinion still has 3 gates open

    Reserves audit manager

    The tract is retested and its ownership cells pass, so ownership failures fall from 43 to 40. Net reserves read 1,120.0 as booked and 1,111.4 after closed findings, before the outside letter arrives. The next step on the wall is sign-off, and it says plainly that 3 gates are still open.

One amendment, three estimates, 8.6 million boe of reserves too high

The tract's barrels hold up against production. The share booked against them does not.

Gross reserves, three estimates on the tract68.8 million boe
Interest in the reserves database62.500%
Interest after the third amendment50.000%
Net as booked43.0 million boe
Net at the recorded interest34.4 million boe
Too high, inside the outside audit68.8 times the 12.5-point gap.8.6 million boe

demoSample data, from the working solution.

Other findings

A drifting decline, a forecast past its license, and a planning price deck

The same six tests find these elsewhere in the book, each with its own pages.

Forecast running under

One estimate produced 23.8% below its forecast over a year, as water cut rose from 38% to 61%.

Volumes past the license end

A forecast runs past the end of its license, with no extension on file.

The wrong price deck

An estimate priced on the planning deck instead of the 12-month average owes a rerun.

demoSample data, from the working solution.

Around the opinion

The sample, the gaps and the queue behind a reserves audit opinion

What the manager and the owners work from once the first finding is closed. Choose a screen to see it full size.

Accepting the passesAccepting 1,189 passed estimates outside the outside audit, 162.3 million boe, rests on a sample of 20 drawn by volume, with its seed. The manager has opened 0 of 20.
Not signed yetSign is refused while gates stay open, and the dialog names each one: the sampled acceptance, 3 of 4 material findings, and 313 could-not-test estimates.
Could not test313 estimates, 72.4 million boe, sorted by reason. A group goes to its owner in one request, or the auditor proposes it as a limit for the manager to sign.
Findings161 proposed from 153 failed estimates, with owner, effect, due date and state. F-001 sits closed at the top, and 2 are overdue.
The manager's queueOldest first: the 20 sample estimates to open, overdue findings escalated to him, two disagreements to settle, checks to close, and the opinion itself.
All estimates3,480 estimates holding 1,120.0 million boe, as cards with their six results. Search, filter by coverage or result, and export the rows.

demoSample data, from the working solution.

Who acts

The auditor raises, the owners answer, and only the manager closes

No person checks their own step, and the auditor who did the work cannot sign the opinion.

Internal reserves auditor
Sees
Test cards and the pages behind each failure
Signs
Raises findings after opening their pages, accepts replies after opening the revision, proposes acceptance and limits
Land records analyst
Sees
Ownership and license findings with both pages
Signs
Confirms the record, or disagrees with the one that supersedes it
Reserves engineer
Sees
The finding and its volume effect
Signs
Revises the estimate in the reserves database
Reserves audit manager
Sees
Revised records, the acceptance sample and the opinion's gates
Signs
Closes findings, signs limits, and signs the opinion once its gates pass
Audit committee liaison
Sees
The opinion as it stands and the largest open findings
Signs
Nothing; reads and exports the evidence
The agents

Seven agents run the six tests, and none raises or closes a finding

They load, test, draft and draw. People decide.

Estimate loader

Loads each estimate read only, ties it to its sources and checks the total.

  • Never changes a value in the reserves database
Ownership tester

Finds the latest record that sets the interest and compares it with the database.

  • Never calls a missing record a pass
Study age tester

Reads each study's issue date and revision.

  • Never uses a limit other than the signed one
Decline tester

Compares the last year's forecast with allocated actual production.

  • Never re-forecasts; that is the engineer's job
Rules tester

Checks category rules, the five-year plan date, the price deck and the license term.

  • Never decides a special circumstance
Finding writer

Drafts findings with both pages, names the owner and computes the effect.

  • Never raises or closes a finding
Sample drawer

Draws the acceptance sample at random and records the seed.

  • Never takes the sample from the person who proposed acceptance

What reserves managers ask before an internal reserves audit

What is a reserves audit?

A reserves audit checks that a company's reserves estimates are reasonable and rest on evidence. Here the internal reserves audit tests each estimate in the reserves database against its title record, study, production, category rules, price and license term. The internal auditor raises findings and the reserves audit manager signs the opinion.

How does this sit beside the outside reserves audit?

The industry standard lets an outside auditor cover most of the reserves rather than all of them, and accept ownership and production as the company gives them. This tests the estimates outside that scope and the trusted inputs inside it, so the internal team finds what the outside letter would not.

What does could not test mean?

The evidence a test needs was missing, such as a study not in the document system or a title record that stops years back. It is its own result, never a pass. Each group gets an owner and a request, or the auditor proposes naming it as a limit and the manager signs.

Can a qualified reserves auditor rely on what the agents find?

The agents test and draft. A finding is raised only after the auditor opens the pages it rests on, and each revision is opened before it is accepted and again before it is closed. Bulk acceptance of passes goes through a random sample that the manager opens himself.

How does it support reserves internal controls?

Each action is in an audit trail with a name, and the working papers export as files. A threshold change needs a second person's signature and never applies to results already given. The auditor who did the work cannot sign the opinion.

Does it change our reserves database?

No. The agents read the reserves database, land records, production accounting and documents without writing to any of them. When a finding stands, the reserves engineer makes the change in the reserves database, and the tool shows the change record to the auditor and the manager.

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Bring one block's estimates
and its operating agreement.

Bring them and we will open a test wall, a test card and a finding on your own reserves.

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