Value from Measurement Schematics Introductory Comments 15 High Level Ideas (white paper has details) Ask your questions as we go along Discuss other ideas/opportunities

Introduction Assumes you already have a decent set of measurement schematics. Built in any software. The ideas are not original. But company’s go through cycles of learning, focussing and then forgetting. Key to get measurement schematics outside the measurement group.

#1 – Production Hours Work with Production Accounting Required to be on measurement schematics Most forms of artificial lift have downtime as part of their production cycle. Routine, planned down time on an artificial lift well can be counted as “on time”. Under reported hours cause over calculated production rates, which gives a higher monthly royalty rate. Can re-file up to 5 years after.

#2 - Sales of Fuel Gas Work with Production Accounting & JI Required to be on measurement schematics Fuel gas sold off lease needs to be reported and billed out. Financial impact wherever the working interests differ. Many auditors will only bring up cases where they win.

#3 – Non-Accounting Meters Work with Field and Measurement Not required to be on measurement schematics Non-accounting meters do not need to be calibrated or have samples taken for them at any regulated frequency. Unless marked, it is not clearly agreed across the company.

#4 – Gas Well Producing Oil Work with Production Accounting Required to be on measurement schematics It is only recently that the Volumetric Gas Well Liquid (VGWL) was exportable from Petrinex Royalty rates are lower on oil than on condensate.

#5 – PD Gas Measurement Work with Production Accounting Required to be on measurement schematics PD meters on gas need to be manually pressure and temperature compensated. Typically a factor of 5 to 10 Auditors often only identify where it helps them.

#6 – Suspended Wells and Pipelines Work with Production Accounting and Asset Mgt. Not required to be on measurement schematics, but Shut-In wells are to be shown Alberta Energy has industry maintain 2 different lists of suspended wells Petrinex statuses are fed to the municipalities to be used in property tax calculations. Lower taxes are charged on suspended facilities Also can impact DD&A calculations

#7 – Fuel Gas Estimates Work with Field and Production Accounting Required to be on measurement schematics Need to provide a consistent and supportable method of estimating fuel gas, with a paper trail Auditors will often only identify where it helps them

#8 – Effluent Testing Waivers Work with Field and Measurement Required to be on measurement schematics Four ways; Low pressure (350 kpa) Listed zone Plunger with EFM Low liquid rate and partner/royalty agreement Saves about $3,000 to $5,000 per year per well

#9 – Upstream vs. Downstream Work with Production Accounting Required to be on measurement schematics The math in the allocation system needs to match the location of the offtakes Auditors sometimes only identify where it helps them

#10 – 3rd Party Fees Work with JI and Revenue Accounting Required to be on measurement schematics If 3 months after start-up a 3rd Party company has not seen volumes or capital fees allocated to it, who do they call?

#11 – Excel Cross Checks Work with Engineers and others Partially required to be on measurement schematics Many roles in a company use data that partially shows on the measurement schematics; Benzene testing of Amine Dehys Compression Engineers Cross Checking improves/validates both sides

#12 – Air Eliminators Work with Field and Measurement Not required to be on measurement schematics

#13 – EPAP Controls Work with EPAP Coordinators Ideas 1 to 12 inclusive are EPAP controls Do the documentation

#14 – Emergency Response Maps Work with HSE The current flow connection maps on a measurement schematic are useful in emergencies. Can reduce the expense of updating existing maps in the Emergency Response Team’s maps

#15 – Reduce PA Rework Work with Production Accounting leads Measurement Schematics were originally mandated to help improve the production accounting process. Often 25% of a PA team is working on rework Ask what else could be done to reduce this more

Conclusion Working several of these issues will improve and validate your measurement schematics. Valid measurement schematics have value that exceeds the costs

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