The Petroleum Registry of Alberta The Petroleum Registry of Alberta Energizing the flow of information Registry Information Session September 21, 2006

The Petroleum Registry of Alberta Agenda 1.Registry Pipeline Splits Initiative 2.DOE Oil Penalty Shadow Billing 3.EUB Water Reporting 4.Did You Know? a)Changes to the Registry Allocation OAF & WIO Reports b)New Report Button on Query Volumetric Screen c)TCPL Split and Invoice Changes d)New DOE RMF2 Report e)Changes to the Ministry Invoices & Statements area f)DOE Report Package Name Changes g)Strong Passwords 5.Questions

The Petroleum Registry of Alberta 1. Registry Pipeline Splits Initiative

The Petroleum Registry of Alberta 1. Topics a)Registry Pipeline Splits: Backgrounder b)Introducing: Full and Lite Registry Splits c)Overview of Current, Full and Lite Approaches d)Project Status and Benefits e)Non-participating Pipeline Option f)Next Steps

The Petroleum Registry of Alberta 1a. Registry Pipeline Splits: Backgrounder Pipeline splits is the process where operators report to Pipelines, Owners, Shippers and Purchasers their share of sales volumes delivered to the pipeline each month. The Registry splits process was developed and in place at Registry go-live October 2002, but full implementation was deferred. Industry currently uses Registry split capability for: –APMC reporting (mandated) –Partner Reporting (optional) IBC has ranked extended Registry splits as a high priority initiative for many years.

The Petroleum Registry of Alberta 1a. Registry Pipeline Splits: Backgrounder In discussions with pipeline companies, it is clear that two models for Registry split reporting are required: Full and Lite Participation Models. There are benefits to loading pipeline splits to the Registry, even for Non-participating pipelines. The IBC, RAC, RSC, CAPP and SEPAC have endorsed an initiative to facilitate Full, Lite and Non Participation models in the Registry. A project is currently underway to make required changes to the Registry. Communication plans are in place to assure all stakeholders are ready for the change.

The Petroleum Registry of Alberta 1b. Introducing: Full and Lite Registry Splits Full Approach –Pipelines will provide Estimated Splits and receive Operator-prepared Splits exclusively through the Registry. –The Registry will provide Splits results to Shippers, Owners, and Purchasers at the appropriate level of detail (e.g. total, or at a well level).

The Petroleum Registry of Alberta 1b. Introducing: Full and Lite Registry Splits Lite Approach –The pipeline will communicate Estimated Splits and receive Operator prepared Splits outside the Registry using existing pipeline processes…plus standardized Registry-like (XML, CSV) batch uploads and downloads. –Operators will upload confirmed split results to the Registry. The Registry will make Splits results available to Shippers, Owners, and Purchasers at the appropriate level of detail (e.g. total, or at a well level).

Pipeline or Terminal Operator Delivering Facility Operator 2 WIOs Shippers Registry Purchasers 1c(i). Current Pipeline Splits Process

1.The Pipeline or terminal operator reports volumes to be split, expected shippers and estimates and forecasted split volumes via fax to the Delivering facility operator (or CSO). 2.The Delivering facility operator calculates the pipeline split and reports the volumes for each shipper back to the pipeline or terminal operator via fax (Part A of split file). 3.The Delivering facility operator reports to each shipper their share of the split volume. (subset of Part A of split file). 4.The Delivering facility operator reports to each purchaser their share of the split volume. (subset of Part A & part B of split file).

1c(i). Current Pipeline Splits Process 5.The Delivering facility operator reports to each owner their share of the split volume at the well/stream level. (subset of Part A & part B of split file). 6.The Delivering facility operator reports to the Registry the APMC (shipper) share of the split volume to the Registry. Only applicable for Oil. 7.The pipeline or terminal operator reports to each shipper their share of the split volume as reported to them by the delivering operator. * The pipeline split data reported by Industry can be broken into two parts: –Part A – Details the volumes for each shipper. –Part B – Details the volumes under each shipper for each owner, purchaser, and lists the applicable well/stream IDs.

1c(ii). Full Pipeline Splits Process Pipeline or Terminal Operator Delivering Facility Operator WIOs Purchasers Shippers Registry a4b 4c 4d

1c(ii). Full Pipeline Splits Process 1.The Pipeline or terminal operator reports volumes to be split, expected shippers and estimates and forecasted split volumes to the Registry. 2.The Delivering facility operator (or CSO) retrieves the pipeline split data from the Registry. 3.The Delivering facility operator calculates the pipeline split and reports the volumes for each shipper, owner, purchaser and well/stream ID information (Part A & B of split file) to the Registry.

1c(ii). Full Pipeline Splits Process 4.The Registry creates reports for: –the pipeline or terminal operator –the shippers including the APMC –the purchasers –the owners * The pipeline split data reported by Industry can be broken into two parts: –Part A – Details the volumes for each shipper. –Part B – Details the volumes under each shipper for each owner, purchaser, and lists the applicable well/stream IDs.

1c(iii). Lite Pipeline Splits Process Pipeline or Terminal Operator Delivering Facility Operator WIOs Purchasers Shippers Registry c 3 6 5b 5a

1c(iii). Lite Pipeline Splits Process 1.The Pipeline or terminal operator reports volumes to be split, expected shippers and estimates and forecasted split volumes to the Delivering facility operator (or CSO). 2.The Delivering facility operator calculates the pipeline split and reports the split volumes to the Pipeline or terminal operator. Includes the shipper level details only (Part A of split file). 3.The Pipeline or terminal operator confirms the split is correct and supplies a confirmation number to the Delivering facility operator. 4.The Delivering facility operator reports the pipeline split data to the Registry including the confirmation number. Includes all details regarding shippers, owners, purchasers and well/stream Ids (Part A & B of split file).

1c(iii). Lite Pipeline Splits Process 5. The Registry creates reports for: –the shippers including the APMC –the purchasers –the owners 6.The pipeline or terminal operator reports to each shipper their share of the split volume as reported to them by the delivering operator. * The pipeline split data reported by Industry can be broken into two parts: –Part A – Details the volumes for each shipper. –Part B – Details the volumes under each shipper for each owner, purchaser, and lists the applicable well/stream IDs.

The Petroleum Registry of Alberta 1d. Project Status and Benefits Current Status: Registry pipeline splits will be implemented on a pipeline-by-pipeline basis over time. Pembina intends to use the Full Registry Splits approach, exclusively, for all their pipelines. –A smaller Pembina pipeline will be used for a pilot project, targeted for March/April 2007 implementation. TCPL to utilize Lite Registry approach (subject to review with TTFP Committee). –Implementation timing is subject to confirmation, but is expected to be in place before the end of 2007.

The Petroleum Registry of Alberta 1d. Project Status and Benefits Current Status: ATCO has indicated their strategic intent to use the Lite Registry approach. Other pipelines have expressed interest and support for Registry splits. The IRT will work with any pipeline interested in exploring these Registry options. Support and encouragement from the pipeline customers will accelerate the adoption of the Registry approach and help to standardize this business process across Industry.

The Petroleum Registry of Alberta 1d. Project Status and Benefits Project Benefits: Standardized processes to electronically upload splits (to the pipeline or to the Registry) from users PA vendor systems or spreadsheets (versus keying and faxing). Reduced partner reporting distribution costs (Its in the Registry). Access to data in electronic format.

The Petroleum Registry of Alberta 1d. Project Status and Benefits Project Benefits: Reduced data chasing. Reduced time spent keying or writing out split data. Reduced time identifying and correcting errors due to re-keying/rewriting mistakes. Industry can confirm that ROYALTY reported in volumetrics and APMC pipeline split volumes are reconciled.

The Petroleum Registry of Alberta 1e. Non-participating Pipeline Option A number of companies have for some time uploaded all pipeline split information (oil and gas) to the Registry for partner reporting purposes. While the Pipeline Split Adjustment project will greatly facilitate this process, a number of vendor systems are already set up to accommodate this activity…and the Registry can accept.CSV uploads as well. You may want to consider loading splits now to get a head start on communicating splits to partners through the Registry.

The Petroleum Registry of Alberta 1f. Next Steps CAPP and SEPAC executive committees have endorsed this initiative. Registry change costs will be borne by Industry through a draw on past IRT surpluses and a voluntary billing. –A pipeline splits billing will be included as part of an overall Industry (IRT) billing to producers later in the Fall. The Registry team and Fujitsu are well advanced in the development process, and are on-budget, on- time for the March 07 completion target. The IRT will continue to work with PA system vendors to encourage and support their full participation. Communication plans are in place to assure all stakeholders are aware and ready for the change. The Registry Training System will be updated to reflect these changes.

The Petroleum Registry of Alberta 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Background Alberta Energy implemented new Petroleum Marketing Regulation on July 11, No change to existing oil royalty delivery process and reporting requirements. Regulation does include provisions for non- compliance penalties and interest on unpaid invoices. Several Information sessions have been held, additional sessions to follow. 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Background Non-Compliance penalty shadow billing commenced with the July 2006 production period and will continue for six months. Shadow billing reports are available in the Registry – Ministry Invoices and Statements area. Dates on when shadow billing reports are available is being added to the monthly Registry reporting calendar. 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Penalty Type Summary Reporting type penalties: –Late/Non-reporting of current month Crown royalty splits –Inaccurate reporting of current month Crown royalty splits –Failure-to-submit amended records for previously overdelivered volumes Over/Under delivery as compared to DOE Oil royalty calculation. 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Benchmarking – Overall Statistics August Reporting - $168, –Late/Non-reporting - $26,000 –Inaccurate reporting - $13,100 –Under/Over delivery - $129, –Failure to Amend – Not applicable for August reporting Initiative - Comparative penalty ratios have been distributed to Registry Change Leaders, contact Registry Service Desk. 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Company Average # of Penalties per Operated Facility Based on Shadow Billing Charges for the August 2006 Reporting Period Penalty Types included: - Late/Non-reporting of current month royalty splits - Inaccurate current month royalty split reporting - Over/Under delivery as compared to DOE royalty calculation Does not include Penalties for Failure-to-Amend Over-deliveries (not applicable)

The Petroleum Registry of Alberta Clarification Points Failure-to-submit overdelivery amendment penalties not applicable until October. –First request for amendments was communicated at the end of August via Reconciliation report –With a (approx) 60 day deadline, no amendment deadlines are reached until the end of October –Current Benchmarking statistics, as a result, do not include this penalty type 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Clarification Points Shadow Billing Penalty reports are available at two separate points in the monthly cycle. Due to timing of the availability of information. –Reporting type penalties – available upon the completion of Crown split verification process Generally around the 20 th of each month –Delivery type penalties – available upon receipt of the DOE royalty calculation Generally at the end of each month 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Clarification Points Overdelivery amendment penalties are unrelated to initial over delivery penalty. –Once overdelivery occurs, it cannot be reversed, only penalty liability can be questioned via an appeal –Occurrence of initial overdelivery also results in a request for an amendment to trigger financial settlement –If applicable deadline passes (approx 60 days), a failure-to-amend penalty is charged 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Clarification Points Overdelivery claim processing where original reported delivery volume did not match Crown Shippers Balance –PRA - Edit TAOC functionality updated to provide a warning rather than error message when the Claim volume plus Overdelivery is greater or less than the APMC volume Claim volume should always be adjusted to equal DOE royalty calculation Special circumstances, contact DOE 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Clarification Points Error in previous communication of Over/Under delivery penalty maximum. –Incorrectly used a maximum penalty of $5,000 rather than $10,000 per BA monthly –This impacted only five BAs in the first month of shadow billing –Updated guidelines have been posted and revised Information session presentation distributed 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Penalty Appeals General list of appealable items were agreed to with Industry during Consultation –Underlying appeals principle for over/under delivery penalties established: If a royalty variable has changed since last communicated by the DOE –Reporting type penalty appeals will generally be due to system deficiencies or Acts of God (Waivers) 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Penalty Appeals Specific forms used and procedure for submission are under development. Industry will be consulted during process development. Decision tree type document will be developed for Industry use for determining whether a cause is appealable. An additional round of Information/Training sessions will be offered. 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta Upcoming Training Session(s) September 26 th, 1:30 – 3:00 pm AMEC Place, 801, 6 th Ave SW Contact David Creig for registration at: (403) or Additional Resources Petroleum Marketing Guidelines 2. DOE Oil Penalty Shadow Billing

The Petroleum Registry of Alberta 3. EUB Water Reporting

The Petroleum Registry of Alberta a)Background b)Daily Operations & Reporting c)Volumetric Reporting Deficiencies d)We Need to Solve the Problem e)Water Balance/Water Management f)Water for Life g)Water Management: Timeline h)Water Management: Summary 3. Topics

The Petroleum Registry of Alberta 3a. Background Why Water …. We Need to Manage our Water resources now. Demand for water (Industrial, Residential, Agriculture, etc) continues to increase. Alberta Environment is reassessing allocation policy; aligning water use with allocations. i.e. Oil Field Injection use is less then allocation. Unconventional Gas Production (CBM) impacting ground water management because of potential for fresh water production or contamination.

The Petroleum Registry of Alberta Creating new subtype to track Brine production reporting New battery subtype of 903 – Brine Production Expected implementation date: Dec 2006 Allows the reporting of Brine Brine production for commercial use –Benefit to DOE Brine audit Today business rules do not exist to allow a Brine well to be linked to a facility; therefore volumetrics cannot be reported. No impact to most users 3b. Daily Operations & Reporting

The Petroleum Registry of Alberta EUB has always monitored water reporting. The main source of your water reporting errors is the EUB noncompliance report which is found in the Registry inbox. The error codes are: VME0015 – Metering difference is greater then 5% and less then 20% VME0020 – Metering difference is greater then 20% The following graphs show an increase in the error count. Note: The graphs show the error count and volumetric values for complete production years 2003 to 2005 and partial values for the current year ending July c. Volumetric Reporting Deficiencies

Water Balance Number of Errors are Increasing

3c. Volumetric Reporting Deficiencies Water Balance Volume Differences are Increasing I.e. Metering difference – Receipts & Dispositions

The Petroleum Registry of Alberta 3d. We Need to Solve the Problem Every year 5 Million cubic meters (5 Billion litres) of water are accounted for as metering difference! Count of errors is increasing year after year. For water errors 1.Check the Registry inbox for your EUB noncompliance report 2.Query Volumetric Submission Screen –Summary View will display noncompliance errors Two possible solutions: 1.No Process Changes if the error count is lowered. 2.Possible Enforcement Process Path. –In consultation with Industry

The Petroleum Registry of Alberta Overview 1.New Directive resulting from Industry activity –Water Balance Directive Draft Q4, 2006 Final Water Directive released after Industry feedback Final Water Directive date is yet to be determined No Directive number yet assigned –Will Replace Bulletin dated March 28, 2006: Water Recycle, Reporting, and Balancing Information for In Situ Thermal Schemes. 2.Draft Directive will have an impact on daily operations in the following areas: –New Business Rules –Regulatory Changes 3e. Water Balance

The Petroleum Registry of Alberta Water for Life is a provincial water strategy initiative. 1.Safe drinking water 2.Healthy aquatic ecosystems 3.Reliable quality systems for sustainable economy Future Environment– life cycle management. Impact: Track the fresh water related to Oilfield injection, CBM, etc. Will effect future reporting requirements. Future information check 3f. Water for Life

The Petroleum Registry of Alberta Phased approach Daily Operations & Reporting Ongoing Water Balance Delivery of New Business Rules Water for Life Overarching Strategy 3g. Water Management: Timeline

The Petroleum Registry of Alberta Short Term Improve reporting method by implementing new facility subtype. Due Dec 2006 Draft Water Directive due Q Medium Term Final Water Directive based on Industry input Determine how to manage the high volumetric reporting error count Long Term Water for Life – Ability to better track / manage Water Resources 3h. Water Management: Summary

The Petroleum Registry of Alberta 4. Did You Know? a)Changes to the Registry Allocation OAF & WIO Reports b)New Report Button on Query Volumetric Screen c)TCPL Split and Invoice Changes d)New DOE RMF2 Report e)Changes to the Ministry Invoices & Statement area f)DOE Report Package Name Changes g)Strong Passwords

The Petroleum Registry of Alberta 4a. Changes to the Registry Allocation OAF & WIO Reports Allocation OAF Report : Changes introduced September 7, This is now an Operator Only report. Only the operator who submitted the allocation can receive results when requesting the OAF report. The ability to select owners has been removed. All Owners will be returned for each report request. Removing the owner selection will impact any existing CSV saved report parameters.

The Petroleum Registry of Alberta 4a. Changes to the Registry Allocation OAF & WIO Reports Allocation WIO Report: Changes introduced September 7, The WIO report has been enhanced to add the submitted volume and energy information. This is in addition to the calculated volume and energy values that was already available. The WIO report will continue to be exclusively for allocated owner information for non-operated and/or operated properties.

The Petroleum Registry of Alberta 4b. New Report Button on Query Volumetric Screen The query volumetric screen, now contains a new Report button that allows users to request a daytime running report for a single facility. The new button is available on the following query volumetric screens: –Summary View –Facility Activity View –Well View –Pro-ration Factor View The results from this request will always be a PDF Volumetric Facility Activity Report, which will contain all data for that facility, production month and amendment number.

The Petroleum Registry of Alberta 4c. TCPL Split and Invoice Changes As discussed at the Tolls, Tariffs, Facilities and Procedures Committee, and the Industry Benefits Committee, TCPL will align their Commodity and Demand invoice timing. To make this happen: –Industry agreed to provide split (RAF) information earlier on the deadline day, and –TCPL changed their internal processes to process splits and generate invoices.

4c. TCPL Split and Invoice Changes A.What is going to change? When the invoice is available: Old: TC will render paper invoice on or before the 20 th. New: TC will post the invoice on or before the 21 st. B.The RAF deadlines* will be earlier RAF DeadlinesOLDNEW Faxed2:00 pm12:00 noon Electronic9:00 pm4:00 pm * Firm deadlines.

The Petroleum Registry of Alberta 4d. New DOE RMF2 Report New report (RMF2 Listing) issued by the DOE in August 2006 in response to RMF2 Subcommittee Request. Sent to the Ministry Invoices and Statements area of the Registry. Displays all RMF2s (including terminated) which may be used for royalty calculations. Includes Last Used field to determine usefulness of the respective RMF2. One-time initiative for all BAs, however DOE will accept company-specific requests – for details contact your Gas Royalty Client Services Portfolio team representative.

The Petroleum Registry of Alberta 4e. Changes to the Ministry Invoices & Statement area Changes will occur over the next few months to improve clarity and ease of use. Changes have begun as the Manage Ministry Reporting screen has been revamped: –The Date Processed column has been removed. This information can be found in the respective Ministry report and is therefore not needed on the screen. –Under the View, Download and Download Zipped column, Kbytes will now be listed as KB.

The Petroleum Registry of Alberta 4e. Changes to the Ministry Invoices & Statement area Changes being made to the Ministry Invoice & Statements by the DOE include: –Preface package names with – DOE Oil, DOE Gas, etc. –Ensure all PDF/TXT/CSV files appear on one line, with a drop down option. –Achieve consistency in the use of capital and lower case letters in report names. –Clarify report names for ease of use.

4f. DOE Report Package Name Changes Also, there will be several Package/Report name changes: Current NameRevised Name Statement of Royalty Adjustments and Transportation Allowances Detail of Royalty Adjustments and Transportation Allowances General Invoice/TransferInvoice/Direct Deposit Notice Royalty Confirmation ReportRoyalty Delivery Confirmation Report R(L)0000##### - Application status for oil royalty programs- YYYYMMDD Well ID - Program Status - YYYYMMDD Oil Royalty Program Reports - YYYYMMDDRoyalty Program Reports - YYYYMMDD Scheme Level EOR Relief Details for Current Month YYYY-MM EOR Relief Well Details - YYYY-MM Summary - Current Month EOR Relief for YYYY-MM EOR Relief by Facility Summary - YYYY-MM Summary for Current Processing PeriodCorporate Summary - Prod Mth YYYY-MM and Prior Current Month Summary for YYYY-MMFacility Summary - Prod Mth YYYY-MM and Prior Summary for Current Processing MonthWell Details - Prod Mth YYYY-MM and Prior

The Petroleum Registry of Alberta 4g. Strong Passwords To be introduced in 4 th Quarter of Designed to enhance Registry security. Passwords must be at six characters long and include 3 of these four elements: –Lower case letters –Upper case letters –Numbers –Special characters

The Petroleum Registry of Alberta 4g. Strong Passwords Users have always had the ability to use strong passwords and their use has been recommended. This change will now make Strong Password use mandatory and will impact all Registry users. After implementation, users will need to enter a strong password the next time they are prompted to change their password. This change does not immediately affect existing passwords. More communication will follow as the implementation date approaches.

The Petroleum Registry of Alberta 5. Questions?