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Complex gathering systems, processing plants, midstream operations, and oftentimes numerous intermediaries and operator-affiliated parties, paired with increasingly complicated contract or lease provisions, require specific expertise to conduct a proper and thorough revenue or royalty audit. Most times it is impossible to decipher the sales volumes, prices paid, deductions taken, or even the net revenue interest from revenue remittances, much less make sure they are correct
A revenue audit is performed to determine if working interest, net profits, royalty, or overriding royalty interest revenues are properly paid under the applicable agreement(s), such as a Joint Operating Agreement (JOA), marketing agreements, farmout agreement, net profits lease, or oil and gas lease.
A royalty audit performed to determine if a lessor is properly paid under a lease agreement. With the complexities and intricacies of today’s lease agreements, it can be very difficult for operators to correctly account for revenue payments to royalty owners, especially when the lease agreements have differing valuation and volume clauses then a typical Joint Operating Agreement.
Martindale has conducted thousands of revenue and royalty audits covering all geographical areas in the United States from simple to extremely complex systems. Our team has the experience and expertise in operations, accounting, and agreements, to handle any revenue or royalty audit.
Matt Pilkington