Oil PR Form filing involves unique challenges compared to gas reporting, primarily due to physical inventory management, tank operations, and the need for precise volume reconciliation. This comprehensive guide covers everything you need to know about oil-specific PR Form requirements.
Oil PR Form Fundamentals
Oil production reporting requires careful attention to physical inventory changes, run tickets, and various disposition types. Unlike gas, which flows continuously through pipelines, oil is typically stored in tanks before sale or disposition.
Oil-Specific Considerations:
- Tank Inventory Management: Beginning and ending tank levels
- Run Tickets: Documentation for all oil movements
- Shrinkage Calculations: Normal operational losses
- BS&W Deductions: Basic sediment and water content
- Temperature Corrections: API gravity adjustments
- Stock Adjustments: Inventory corrections and reconciliation
Oil Disposition Codes
Understanding and properly applying disposition codes is crucial for accurate oil PR Form filing. Each code represents a specific way oil was handled during the reporting period.
| Code | Description | Usage Guidelines | Documentation Required |
|---|---|---|---|
| 01 | Sold | Oil sold to purchasers, refineries, or marketers | Run tickets, purchase agreements |
| 02 | Used for fuel | Oil used on lease for heating, power generation | Usage logs, meter readings |
| 03 | Shrinkage/Loss | Normal operational losses, evaporation | Shrinkage calculations, tank gauges |
| 04 | Stock adjustment | Inventory corrections, measurement adjustments | Reconciliation records, gauge sheets |
| 05 | Transferred | Oil moved to another lease or facility | Transfer tickets, receiving records |
Tank Inventory Management
Proper tank management is the foundation of accurate oil PR Form reporting. Daily gauging and consistent measurement practices ensure reliable data for monthly reporting.
Daily Gauging Best Practices:
- Consistent Timing: Gauge tanks at the same time each day
- Proper Equipment: Use calibrated gauging equipment
- Temperature Recording: Note oil temperature for corrections
- Water Cut Measurement: Determine BS&W content regularly
- Documentation: Maintain detailed gauge sheets
Tank Strapping and Calibration:
Accurate tank strapping tables are essential for converting gauge readings to volumes. Tanks should be re-strapped periodically to maintain accuracy.
- Initial tank strapping by certified professionals
- Regular verification of strapping tables
- Documentation of tank modifications
- Correction factors for tank tilt or settlement
Run Tickets and Sales Documentation
Run tickets provide the legal documentation for oil sales and transfers. Proper run ticket management is crucial for accurate PR Form reporting and audit compliance.
Essential Run Ticket Information:
- Date and Time: When oil was loaded/transferred
- Lease Information: RRC lease number and name
- Volume: Gross and net barrels
- Quality: API gravity, BS&W content
- Temperature: Oil temperature at measurement
- Purchaser: Company receiving the oil
- Signatures: Operator and purchaser representatives
Run Ticket Example
Date: January 15, 2025
Lease: Smith #1 (RRC# 12345678)
Gross Volume: 150.5 BBL
BS&W: 2.5%
Net Volume: 146.7 BBL
API Gravity: 42.3°
Temperature: 68°F
Purchaser: ABC Oil Company
Shrinkage Calculations
Shrinkage represents normal operational losses due to evaporation, measurement differences, and handling. Proper shrinkage calculation is essential for balanced PR Forms.
Typical Shrinkage Rates:
- Light Crude (>35° API): 2-4% monthly
- Medium Crude (25-35° API): 1-3% monthly
- Heavy Crude (<25° API): 0.5-2% monthly
- Condensate: 3-6% monthly
Factors Affecting Shrinkage:
- Oil gravity and volatility
- Storage tank design and condition
- Temperature variations
- Storage duration
- Handling and transfer frequency
Balance Reconciliation
Oil balance reconciliation ensures that all production is properly accounted for through dispositions. The basic balance equation must be satisfied within acceptable tolerances.
Reconciliation Process:
- Gather Data: Collect all production, inventory, and disposition records
- Calculate Production: Sum all well production for the month
- Determine Inventory Change: Beginning minus ending inventory
- Total Available Oil: Production plus inventory decrease (or minus inventory increase)
- Sum Dispositions: Add all disposition volumes by code
- Check Balance: Available oil should equal total dispositions within tolerance
- Investigate Variances: Research and correct any imbalances
Balance Example
Beginning Inventory: 500 BBL
Production: 2,000 BBL
Ending Inventory: 300 BBL
Available for Disposition: 500 + 2,000 - 300 = 2,200 BBL
Dispositions:
• Sold: 2,100 BBL
• Shrinkage: 80 BBL
• Fuel Use: 20 BBL
• Total: 2,200 BBL ✓
Common Oil PR Form Errors
Avoid these frequent mistakes that cause oil PR Form rejections:
Inventory Errors:
- Incorrect tank gauges: Verify gauge readings and calculations
- Wrong strapping tables: Use current, accurate tank tables
- Missing inventory changes: Account for all tank level changes
- Temperature correction errors: Apply proper API corrections
Documentation Issues:
- Missing run tickets: Maintain complete sales documentation
- Incorrect volumes: Verify run ticket accuracy
- Wrong dates: Ensure proper reporting period allocation
- Unsigned tickets: Obtain required signatures
Balance Problems:
- Unbalanced volumes: Production doesn't match dispositions
- Excessive shrinkage: Unrealistic loss percentages
- Negative dispositions: Check data entry for errors
- Missing dispositions: Account for all oil movements
Best Practices for Oil PR Forms
Follow these proven strategies for accurate and compliant oil PR Form filing:
Data Collection:
- Implement daily gauging procedures
- Maintain accurate run ticket records
- Document all oil movements and transfers
- Keep detailed shrinkage calculations
Quality Control:
- Reconcile tank inventories monthly
- Validate all disposition codes
- Review balance calculations before submission
- Maintain supporting documentation
Technology Solutions:
- Use automated tank gauging systems
- Implement production accounting software
- Deploy mobile run ticket applications
- Utilize balance validation tools