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EUB Update

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EUB Update

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    2. Agenda INTRODUCTIONS AND VENUE INFORMATION ERCB TOPICS Waste Plant Submission Update S23 Oil Sands Reporting Water Metering Noncompliance Volumetric Data Reviews DOE TOPICS PURREC/PURDISP Reporting Changes Transition Royalty Election Button DID YOU KNOW? Registry Communication Processes (Registry) Warning vs Error Messages (ERCB) Pool Code Changes (ERCB) Process for Requesting a Change in Pool Oil Density (ERCB) Tips for working with CSV Files (Registry) CANADIAN JURISDICTIONS UPDATE Canadian Jurisdictions Update Saskatchewan Ministry of Energy and Resources Update by Jeff Ritter, Director, Oil and Gas Business Process and Systems Renewal Project, Ministry of Energy and Resources Industry Consultation Process QUESTIONS

    3. ERCB TOPICS

    4. Waste Plant Submission Update

    5. Waste Plant Submission Effective with March 2009 production, Waste Plant S25 Submissions are being reported in the Registry. The functionality was implemented successfully, however a number of issues were encountered by Industry. A variety of upstream/producing facility operators were unaware that: Waste Plants would be reporting and thus volumes disposed to the Waste Plants would be auto populated at the upstream facility. Water and solids disposed to the Waste Plant would be combined and reported as the product Water. All oil volumes disposed to the Waste Plant would be auto populated whether the volumes were paid for or not.

    6. Waste Plant Submissions Communication was provided to all the producing facility operators, however it appears this communication did not always make it to the impacted production accountants. The Industry Benefits Committee (IBC) was initially informed regarding Waste Plant (S25) reporting inclusion in the Registry at the June 24, 2008 meeting and an update was given at each subsequent monthly meeting. A TIP “Volumetric Reporting Changes Caused by New Waste Plant Reporting” dated February 18th, 2009 was posted on the Registry website (including a broadcast message) and emailed to all Change Leaders. The TIP included information relating to items 1 & 2 listed previously. The Regulatory Change Report on the ERCB Website (January 6, 2009) identified that Directive 047 would be updated. Directive 047 released February 13, 2009 on the ERCB Website. Announcement on February 26, 2009 regarding Waste Reporting Requirements on the ERCB website. The Registry training system was updated to reflect the inclusion of Waste Plants on March 27, 2009.

    7. Waste Plant Submissions Prior to March 2009 production facility operators were expected to report dispositions to the Waste Plants. There was no auto population but the ERCB has always required all volumes disposed or received to be accounted for when reporting the upstream/producing facility volumetrics. This relates to Item # 3 noted previously. Discussions with the IBC members indicated that any unpaid oil volumes sent to the Waste Plants should be small and thus would not significantly impact well production volumes. Additional information has been added to the TIP to instruct operators on how to balance the product Water when the volume disposed to the Waste Plant was not produced. For example, during lease cleanup or if melting snow was picked/sucked up from the facility site and sent to a waste plant. In these cases the operator is expected to report a Receipt of Water from ABMC (Miscellaneous). Effective June 4, 2009 a new identifier ABWM (Waste Materials) will be available to report the receipt of non-produced water/solid volumes disposed to a Waste Plant.

    8. Waste Plant Submission A variety of Waste Plant facility operators encountered issues when reporting such as: Many upstream facility and well ids were invalid and thus the data was rejected. Oil deliveries between two Waste Plants were not allowed. Water deliveries from Waste Plants to Custom Treaters (CT), Terminals (TM) and Pipelines (PL) were not allowed. ABMC (Miscellaneous) was not allowed and instead Waste Location IDs were required. Waste Plant submissions do not have a WIP process which caused multiple online submissions/amendments. Waste Plant Caverns, their relationship to the existing Injection facilities (IF) and what should be done to change the IF volumetric reporting had not been addressed at implementation.

    9. Waste Plant Submission Communication was provided to all the Waste Plant operators, however it appears the impact of the Directive 047 rules becoming edits in the Registry was not anticipated. Commencing in June 2008 the Waste Plant facility operators were communicated and consulted with by the ERCB and the Registry regarding the inclusion and design of the S25 reporting in the Registry. Oilfield Waste Management Facility Submission Readiness Package dated February 13, 2009 was posted on the Registry website and emailed to all Waste Plant operators. The “Edit/Validation Rules related to Waste Plant data submission in the Petroleum Registry of Alberta” were posted on the Registry website on April 3/09 and emailed to all the Waste Plant operators.

    10. Waste Plant Submission Prior to March 2009 production paper submissions of the S25 were not subject to the same level of validation to ensure adherence to the Directive 047 rules. Well and Facility IDs for receipts were not always validated. (Issue #1) Oil deliveries between two Waste Plants were reported and accepted. (Issue #2) Water deliveries to CT, TM & PL were reported and accepted. (Issue #3) Effective March 2009 new and/or tightened rules were included in Directive 047. The use of ABMC (miscellaneous) was eliminated and there was a new requirement to get a Waste Location ID for all receipts and deliveries to Non-ERCB regulated facilities (including BC & SK wells). (Issue #4) During the design phase of the Waste Plant facility reporting implementation, specific issues regarding Issues #5 & #6 were not recognized.

    11. Waste Plant Submission Due to the issues encountered by both the producing/upstream facility operators and the waste plant facility operators, the Registry will be implementing a number of enhancements over the coming months. These enhancements will be done within our change management process including: VI # 38429 A new Waste Plant Facility Activity report VI # 38431 A validate button will be added to the Edit WP screen VI # 38575 A new Waste Location report VI # 38585 A new From/to identifier ABWM VI # 39047 A new well status for injection wells at WP Caverns VI # 39274 Allow Oil to be delivered between two WP facilities VI # 39285 Allow Water to be disposed from a WP to a CT, TM or PL

    12. Waste Plant Submission Who to contact? Questions related to the requirements set out in Directive 047: Waste Reporting Requirements for Oilfield Waste Management Facilities may be directed to the ERCB Waste and Storage Section (ERCBD47Requirements@ercb.ca). Questions related to the functionality of reporting the Waste Plant Submission to the Registry may be directed to the Registry Help Line (403) 297-6111.

    13. S23 Monthly Oil Sands Processing Plant Statement

    14. ERCB is currently in the process of evaluating several possibilities in submitting S23’s electronically.

    15. S23 Monthly Oil Sands Processing Plant Statement Work in Progress… Ongoing Reviews with internal ERCB Stakeholders. Investigation of the Petroleum Registry of Alberta as a potential solution Tentative Target: July 2010 Currently, ERCB receives 10 paper copies of the S23 Statements.

    16. Implementation of Noncompliance Fees for Water Metering Difference Errors

    17. Water Metering Noncompliance Same process as oil and gas. Noncompliance fees will be applied when: Water metering difference is greater than 20% and monthly volume exceeds 50m3. Metering differences 100% or over regardless of volume will also be subject to noncompliance fees.

    18. Water Metering Noncompliance (Cont’d) Shadow Billing Commencing September 2009 production month for six consecutive months. Invoices will be loaded into the Ministry Invoices and Statements area of the Registry. If an error is not cleared by the ERCB Volumetric Deadline it will continue to appear on the Shadow Billing Invoice each month.

    19. Water Metering Noncompliance (Cont’d) Invoicing: Commencing March 2010 production month. Errors incurred and not corrected during Shadow Billing will be invoiced $100.00 for the March 2010 Production Month. Amendments received prior to the September 2009 Production Month with a water metering difference over 20% will continue to receive non chargeable error message VME0020.

    20. Water Metering Noncompliance (Cont’d) Communication: Industry Benefits Committee: April 28, 2009 PRA Advisory Committee: May 14, 2009 CAPP Accounting Committee: May 27, 2009

    21. ERCB Volumetric Data Reviews

    22. ERCB Volumetric Data Reviews Well Test Production Volumes Reporting As per Directives: Directive 7 - Volumetric and Infrastructure Requirement Section 3.2 and Directive 040: Pressure and Deliverability Testing Oil and Gas Wells Section: 4.3.6 An operator is required to show well test production volumes in PRA and send PRD.PAS files via DDS to ERCB.

    23. ERCB Volumetric Data Reviews Well Test Production Volumes Reporting (Cont’d) Total test volumes reported in PRA and DDS should equal. Ensure you’re doing your half by accurately reporting test volumes in the PRA.

    24. ERCB Volumetric Data Reviews We will be reviewing: Pro-ration factors < 0.5 or > 1.5 Unreasonably high metering differences associated with large volumes. High inventory adjustments associated with large volumes. Inaccurate uses of ABMC codes for large amounts (especially for receipts of oil volumes). Inaccurate uses of Out-of-Province codes for large amounts (especially for receipts of oil volumes).

    25. ERCB Volumetric Data Reviews (Cont’d) Effected companies will be contacted. Always keep source documents – truck tickets, meter tickets, Field Data Capture (FDC) reports etc. Ensure that your Infrastructure Information is kept up to date.

    26. DOE TOPICS

    27. PURDISP AND PURREC

    28. Background The Alberta Department of Energy collects Crown royalties based on specific volumetric transactions in the Registry referred to as “Royalty Triggers”. The most common gas royalty trigger is when gas is delivered to a meter station from a facility. The meter station is considered outside the royalty network Another example of a royalty trigger is the activity PURDISP which is a sale of gas within the royalty network. An example of this would be when a facility purchases gas for fuel use from another facility.

    29. What has Changed? Prior to June 4, 2009, when there was a sale of gas or transfer of ownership within the Royalty network the receiving facility operator was required to enter a PURREC at the receiving facility which auto-populated the PURDISP at the Seller’s Facility. To enhance controls to prevent fuel gas volumes being incorrectly reported the Seller will now be responsible for entering the PURDISP which will then auto-populate the PURREC at the receiving facility. Note: This change is retroactive to October, 2002. The PRA will update the existing records in the Registry so they follow the new reporting rules.

    30. When can a PURDISP be entered? When there is a sale of gas (transfer of ownership) within the royalty network (gas does not reach a meter station). For example: If a Battery sells gas to another Battery, this is considered an “in Royalty network” sale and crown royalties are assessed on this transaction. In order for the Registry and the DOE to recognize this sale: The Delivering battery operator must report a PURDISP. This will auto populate a PURREC at the delivering battery. The operator must then file an SAF/OAF for the PURDISP.

    31. When can a PURREC be entered? Receiving facility types ABIF, ABBT, ABGS and ABGP can enter a PURREC from Other Provinces and States (BC, SK, etc.). Alberta miscellaneous facility types like ABMC, ABCO, ABEG etc. Note: for detailed step-by-step training, go to the Resource Centre – Training Modules – Infrastructure Other – Module 4.16 Manage PURDISP and PURREC Submission.

    32. It Is Important To Note If gas has been sent to the gas plant from a battery and the gas plant has returned gas to the same battery (example: a return fuel situation), there are no royalty triggers so this would be a REC at the battery not a PURREC. When a PURDISP is a raw gas sale, the DOE requires the seller to report the raw gas allocation using the Registry Raw Gas Allocation (RGA) process. The activity PURDISP does not require ISC’s (in stream components) to be entered in the volumetric screen. If there is an existing RGA, the DOE will use the ISC’s linked to the RGA. If not they will use default ISC’s for determining crown royalty.

    34. TRANSITION ROYALTY ELECTION

    35. DOE Rules How does a well event qualify? The well event must be part of well licence that has a spud date on or after November 19, 2008. Each unique well event requires a separate election. Licensee must elect the transition well royalty rates prior to the end of the first calendar month in which the leased substance is produced. The base of the producing interval in the well event must be deeper than 1000 metres and no deeper than 3500 metres. Transitional royalty formulas only apply to production obtained starting Jan 1, 2009 and ending Dec 31, 2013.

    36. DOE Rules (Cont’d) When will the election need to be made? The licensee of a unique well event that is part of a well licence that has a spud date on or after November 19, 2008 is authorized to make a one-time election for Transition well royalty rates. For qualifying wells that had production prior to July 1, 2009 a one-time election must be made on the Registry between June 4 and June 30, 2009. For a qualifying well/event coming on production after June 30, 2009, a one-time election must be made on the Registry prior to the end of the first production month. Changes to this election can only be made prior to the end of the first production month.  

    37. DOE Rules (Cont’d) How is the election made? The Primary USA must assign the ARFT Election Role to individual users to give them the task of ARFT Election. The role of ARFT Election is a separate role in the registry and is not included in the existing comprehensive role. This is a critical step that must be completed prior to making an election on the Registry. Now that a user has access to this process in the Registry the election can be made by going to the infrastructure menu item Edit Alberta Royalty Framework Transitional Rates Election.

    38. DOE Rules (Cont’d) How is the election made? (cont’d) Once the licensee has submitted the election in the Registry, it will be sent to the DOE to make a determination regarding the qualification of the well event for Transitional rates. The DOE will send the qualification results to the Registry and will be available for the licensee to view on the Edit Alberta Royalty Framework Transitional Rates Election page. More Information To review the entire DOE questions and answers related to Transition Well royalty rates go to the DOE website http://www.energy.gov.ab.ca under Alberta Royalty Framework - FAQ Transition Wells.

    39. DID YOU KNOW?

    40. DID YOU KNOW? Registry Communication Process There are a number of different tools used by the Petroleum Registry to communicate to users, including: Tips Alerts User Focus Items Change Leader Emails Training Modules and Job Aids Website updates Conferences Special Newsletters Industry Benefits Committee The most important of all of our communication tools is the BROADCAST MESSAGE.

    41. DID YOU KNOW?

    42. DID YOU KNOW? What might you miss, by not viewing the Broadcast Message section?

    43. DID YOU KNOW? Does it matter that I did not read the Broadcast Messages? Examples: After 12:00 noon on each release day, the Service Desk still gets calls asking why users cannot get onto the Registry. The main question – Is there a problem with the Registry? After the implementation of the waste plant reporting functionality, the Service Desk was getting calls from users who were having problems entering their volumes received from the waste plants. We posted a Broadcast Message advising that the ERCB had moved their Volumetric Deadline for four calendar months (March, June, November and December), and to review the updated calendars. The Service Desk was still receiving calls asking when the date had changed, because users had printed the reporting calendars for 2009 and now they were struggling to get their work completed by the new deadline that they were not aware of.

    44. DID YOU KNOW? What is a Change Leader and why are they important? The Registry Team, including the IRT, looks to the Change Leader in each company to: Be the prime vehicle for passing on information related to implementation planning and execution of Registry functionality and processes. Be the prime focus for soliciting industry input to the Registry team. This will take place through surveys, opportunities for membership on committees and focus groups, company presentations, and many other approaches. Be responsible for disseminating that information as appropriate within his/her company.

    45. DID YOU KNOW? We all have a role to play in the Registry Communication Process! The Registry confirms that we will continue to ensure that information is posted in a timely manner to assist users in getting pertinent information as far in advance as possible. We ask that each of you in this room commit to looking on a daily basis to the Broadcast Message section on the Registry main web page for new messages. One way to do this would be to not set the login page as your favourite, and log in to the Registry from the main page. Your Change Leaders should be sharing information with their staff. The vast number of companies already have a change leader. If your company does not, contact the Service Desk and they will forward your Change Leader information on to the Communications Team.

    46. DID YOU KNOW? Warning vs. error Messages Warning messages are in Blue you can still proceed but would be worth looking into. Error messages are in Red they will result in non-compliance consequences if not corrected before the Volumetric cut off.

    47. DID YOU KNOW? Pool Code Changes Elaine Forsch (403) 297-3577 Self Declared (SD) or Special Commingling requests for Development Entity (DE) codes. Provide well and License # Change in Pool Oil Density and Lahee Well Classification Bulletin 2008-42 Harvey Nahal (403) 297-8395

    48. Did you Know Working With CSV Files In the Registry CSV (comma separated values) files can be used for both reporting (submitting) and retrieving (reports) data. CSV files when opened automatically will open in excel however without taking the appropriate steps some of the data will be lost or converted. For example: Leading zeroes can disappear Production periods can change from 2009-04 to Apr-09 The following slides will provide information on how to properly create and open CSV files.

    49. Working with CSV files Submitting data using CSV files. CSV files can be used to submit the following data Volumetrics Allocations – SAF, OAF and SOV Pipeline Splits – Oil, LPGs and Gas Waste Plants Allowable Costs – AC1, AC2, AC3, AC4 & AC5 User Security changes Templates and instructions can be found on the Registry Website under Resource Centre – Training Job Aids - Spreadsheet Upload Specifications and Templates The specification documents include instructions on creating the file(s) and the format of the data that should be reported in the submission. The templates include excel spreadsheets with the appropriate column headings. Only one type of data can be submitted in each file so there are separate instructions and templates for each of the allowed processes.

    50. Working with CSV files (Cont’d) To Create a CSV file for Submitting data use the following steps: Open a new or existing excel spreadsheet Use a blank worksheet page and copy the appropriate template in Row 1 (the header data row) Complete the blank (submission) page by keying in the applicable data or linking to data already existing on another page of your excel file. For example if you already have a spreadsheet where all your calculations are done you would then link the blank page to data on the already existing calculation/input page. Ensure all leading zeroes are displayed using ‘0012345 or you can format the cells to be text. Save your spreadsheet (all pages) as an excel file. Go to the submission page save the single page as a CSV file. Do not open the CSV file. Login to the Registry and use the batch upload function to upload the CSV file. If you need to change the data go back to the saved excel file and repeat steps 3 to 6. You can have multiple submission pages in the excel file for example; one for volumetrics, one for allocations and another for pipeline splits. Each should have a corresponding CSV file. Thus for this example you would have 1 excel file with multiple pages and 3 separate csv files.

    53. Working with CSV files (Cont’d)

    57. Working with CSV files (Cont’d)

    58. Working with CSV files (Cont’d)

    62. Canadian Jurisdictions Update

    63. Canadian Jurisdictions Update

    64. 64 Saskatchewan Registry Initiative * See Saskatchewan Presentation Industry has been very keen to see Saskatchewan come on to the Registry and as SER representatives will attest, we have had many meetings and presentations with them over the past 6-7 years. SER reps will also tell you that the number one question they were asked at their booths at the CAPPA conferences over these years has been, “When are you coming on the Registry?”Industry has been very keen to see Saskatchewan come on to the Registry and as SER representatives will attest, we have had many meetings and presentations with them over the past 6-7 years. SER reps will also tell you that the number one question they were asked at their booths at the CAPPA conferences over these years has been, “When are you coming on the Registry?”

    65. 65 Saskatchewan Registry Initiative: Industry Consultation Industry has been very keen to see Saskatchewan come on to the Registry and as SER representatives will attest, we have had many meetings and presentations with them over the past 6-7 years. SER reps will also tell you that the number one question they were asked at their booths at the CAPPA conferences over these years has been, “When are you coming on the Registry?”Industry has been very keen to see Saskatchewan come on to the Registry and as SER representatives will attest, we have had many meetings and presentations with them over the past 6-7 years. SER reps will also tell you that the number one question they were asked at their booths at the CAPPA conferences over these years has been, “When are you coming on the Registry?”

    66. 66 Industry – Business Case Conclusions Industry has been pleased to act as sponsor for Saskatchewan’s assessment of the Registry. There has been strong and unanimous support from participating companies for Saskatchewan to come on the Registry. We appreciate the opportunity to work collaboratively with SER in identifying solutions of benefit to all stakeholders. We look forward to moving ahead with SER and the Registry team to the project phase and implementation of full Saskatchewan utilization of the Registry. This being the case, we were very excited to see Saskatchewan move through the various phases of the Registry’s protocol for outside jurisdictions interested in utilizing the Registry. …and in the Business Case Phase… [read through the bullet points on this slide.]This being the case, we were very excited to see Saskatchewan move through the various phases of the Registry’s protocol for outside jurisdictions interested in utilizing the Registry. …and in the Business Case Phase… [read through the bullet points on this slide.]

    67. Industry Consultation for the Saskatchewan Registry Business Case Process Saskatchewan Registry Business Case Working Group (BWG) -Production Accountant Subject Matter Expert (SME) level with IRT support. -Other SME and vendor input as appropriate. -Detailed review and recommendations. -Final review of Work Process Summary document. -4 “core”; 10 total producer companies participated. Saskatchewan Registry Business Change Committee (SBCC) -Manager level input. -PA and other discipline SME support as appropriate. -Review and approve BWG recommendations. -20 producer and 4 vendor companies participated. Note: The IBC, CAPP Accounting Committee, and CAPP/SEPAC executive staff have been kept informed of the process and outcomes of the SK Registry Business Case consultation. As we look forward to the potential of Saskatchewan coming on the Registry, I wanted to highlight that Industry has and will continue to have opportunities to contribute to the initiative. As background, here is the structure of Industry committees that contributed to the Business Case process over the past several months… [Review Slide and the two levels of Industry involvement.] The work of these committees was completed with the completion of the Business Case. I would like to thank all of those that participated on these committees. Your input was invaluable. As we look forward to the potential of Saskatchewan coming on the Registry, I wanted to highlight that Industry has and will continue to have opportunities to contribute to the initiative. As background, here is the structure of Industry committees that contributed to the Business Case process over the past several months… [Review Slide and the two levels of Industry involvement.] The work of these committees was completed with the completion of the Business Case. I would like to thank all of those that participated on these committees. Your input was invaluable.

    68. Saskatchewan Registry Design and Implementation Planning: Industry Consultation SME input: Design confirmation Training module content review Testing activities Supervisor/Manager input: Design approval Implementation Planning Change Leader Program Key point of contact for communication between the Registry and companies operating in Saskatchewan. -The exact structure of committees as we move into the final design and readiness phase will be a matter for discussion with Industry, Saskatchewan and the Registry, but it may look similar to what worked so well during the Business Case Phase. -What we do know for sure is that we will need input and advice from Industry at a number of levels. Specifically… [Review slide and the three levels of input/consultation].-The exact structure of committees as we move into the final design and readiness phase will be a matter for discussion with Industry, Saskatchewan and the Registry, but it may look similar to what worked so well during the Business Case Phase. -What we do know for sure is that we will need input and advice from Industry at a number of levels. Specifically… [Review slide and the three levels of input/consultation].

    69. We anticipate a formal announcement on this initiative before the start of the summer vacation period… …and are very excited at the prospect of seeing Saskatchewan join the Registry.

    70. QUESTIONS

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