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Petroleum Accounting: Introduction

Format: 2 Day

This seminar has been specifically designed to provide an introduction to the Petroleum and Natural Gas Industry and a review of the basic accounting principles and procedures in regular use by the industry. Topic areas include: geology, drilling and completions, field facilities, joint venture accounting, production and revenue accounting, and financial and management accounting.

Day 1

Petroleum Geology

The course covers petroleum geology, geophysics, land ownership, and land survey systems.  It describes the origin, structure, and evolution of the earth, and the nature and origin of petroleum.  It reviews different types of petroleum reservoirs, including their rock properties and structures, and shows how these contribute to the generation, migration, and trapping of oil and gas.  It also shows how geological and geophysical information from wells and seismic surveys can be integrated to locate new petroleum reservoirs.  It discusses the regulation of mineral ownership, including oil and gas, in Canada, with a particular focus on Alberta and B.C.   In particular, it explains the difference between surface and subsurface rights, the consequent obligations of exploration and production companies, and the role of the landman in implementing those obligations.  The course also discusses the basics of joint ventures, including farm-ins, farm-outs, and partnerships.  Finally it describes the Dominion Land Survey (DLS) system and the National Topographic System (NTS), used to define well locations and provide unique well identifiers (UWIs).

Drilling & Completions

This portion of the course discusses the steps after our exploration personnel have decided on a drilling location and the land personnel have acquired the mineral and surface rights.

A reservoir engineer is engaged to determine the viability of the target formations to hold petroleum and the potential for their economic production. At first, they must determine if there is any natural energy that will allow the well to flow. Then, based on information that is gathered during the drilling operation and also on information from other wells in the area, the reservoir engineer can estimate the amount of petroleum that has been discovered. As production occurs, the engineer can then determine if there are any recovery methods that can enhance both the production rate and the overall recovery.

The various steps in the drilling operation will be discussed along with the different components of the drilling rig.

Once a well has been drilled, the results of the operation are evaluated and the geologic results are examined to determine if well will be economic. Hopefully, this is the case and we will be able to complete the well, equip it and eventually make a profit. In this section, we will discuss some of the common well completions and other operations that are performed on a well during its life.

Production Facilities

Now that the well is completed, it can be put on production. Usually a well will flow for the first portion of its life. However, the production rate will decline over time. Once this happens, we can install some form of artificial lift to increase the production rate. We will discuss some of the common methods and equipment.

Produced petroleum must be gathered and treated to bring it to market specifications. We do this by sending gas to gas plants and oil to oil batteries. This portion of the module will discuss some of the equipment that is used for these purposes.

Joint Interest Accounting

The Joint Interest Accounting portion of the course describes reasons for joint operations and provides detail on methods used in agreements including ; Farm-In/Farm-Out, Carried Interest, Net Profits Interest, Mutual Joint Venture, and Unitization.

The Production and Revenue Accounting portion of the course includes the basic functions of a production accountant including ; Prorating Production, Pipeline Splits, Royalties, Non-Owner Fees, Gas Cost Allowance, and Equalizations.

Day 2

Production & Revenue Accounting

Financial & Management Accounting

This section of the course provides a high-level overview of those International Financial Reporting Standards that have direct implications for the oil and gas industry, as well as a comparison with similar standards under Accounting Standards for Private Enterprises.  The purpose of this section is to provide a general understanding of the standards and what the associated terms mean, as well as a discussion of reserve reports and the impact on financial reporting.  Metrics that are commonly used in the Management’s Discussion and Analysis are also reviewed, to allow participants to understand how company performance is measured.  Finally, there is an overview of income taxes, tax pools and related tax topics


Lorie Lindberg

Lorie has been working in the oil patch for 35 years in the areas of production, revenue, and royalty accounting.  She received her CMA designation in 1991 and has also received  Certificates in Production Accounting (CAPPA), Joint Venture Auditing, and Teaching.

Lorie has been teaching for the past 25 years for CAPPA, PASC, and various other organizations.  She currently consults for several companies specializing in Gas Cost Allowance and Equalizations.

Mark Lane

An Image of Mark Lane

Mark Lane has been studying and working in the earth sciences since 1980 and has a gained a wide variety of related experience.  He has worked for oil and gas companies, seismic service companies, universities, and technical institutes.  His career has ranged through oil and gas exploration, geophysical research, computer programming, and employee development.  He has been teaching geophysics and geology since 2005, most recently for Mount Royal University, SAIT Polytechnic, and the Petroleum Accountants Society of Canada.  He is currently providing training services through his company, Mentromorphic Consulting Ltd. 

Mel Miners

An Image of Mel Miners

Mel has over 40 years of experience in the petroleum and related industries. For the last 19 years he has worked as an independent consultant mainly as a reservoir engineer through his company Martlet Inc. More recently, Mel has been associated with Corvelle Consulting to provide guidance on EPAP and other related topics. As an advocate of life-long learning, he has obtained two advanced degrees and multiple short-course certificates. He has also been involved in teaching various courses at both SAIT Polytechnic and Mount Royal University. He is a member of APEGA, CSChE, CAPPA and SPE.

Mehri Salimova, CPA-CMA, FCMA-UK, CGMA-UK & USA

Mehri Salimova photo

Mehri has been working in the oil and gas industry for over 20 years and has held various assignments with companies such as Suncor, Petro-Canada, BP and Worley Parsons across different continents. She has extensive Finance, Control, Governance and Accounting knowledge that she has obtained while working on different levels of organisation. (from Accounts Payable clerk to Finance Director).

Mehri holds the following professional designations: CPA, CMA – Canada, CGMA – UK & USA, FCMA – UK and bachelor degree in Finance and Credit.

$700 +GST Members
$775 +GST Non-members