Baker Tilly’s team consists of professionals with sophisticated tax expertise, dedicated accounting and analytics and digital solutions experience within the oil and gas industry. With more than 35 years of experience, we help clients innovate to survive the never-ending changing economic conditions. We provide oil and gas accounting you with dependable, cost-effective solutions to reduce your overhead and effort spent managing day-to-day accounting tasks. With decades of oil and gas industry experience, we work with you to build a customized plan to meet your business needs and maximize profits. Baker Tilly understands the life cycle of businesses in the oil and gas sector — from inception to growth to acquisition and maintenance. Our team can assist with all aspects of a company’s financial, tax and technology life cycle.
Financial Reporting and Transparency
You might need full back-office support, or maybe you just need some extra hands to share the workload during a busy season. There are plenty of companies out there that boast the ability to help, but not all of them will be your perfect match. When that company moved out of state, she worked for a few different companies doing revenue and inventory accounting, but she was not excited about what I was doing. An opportunity to do gas plant settlement accounting came along, so she decided to see where it led— she started working for The Resource Company, which was later merged with Eddye Dreyer to create PetroLedger, in 1999. She has really enjoyed working with different clients and creating the different setups they need.
Industry hot topics
- This approach spreads the financial risk across all projects and provides a more stable expense pattern over time.
- Revenue recognition in the oil and gas industry is a complex process influenced by various factors, including the nature of contracts, the timing of delivery, and market conditions.
- Depletion specifically pertains to the allocation of the cost of natural resources, such as oil and gas reserves, over their productive life.
- This is typically calculated using the unit-of-production method, which allocates costs based on the proportion of reserves extracted during a period relative to the total estimated reserves.
- We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes.
Production cost allocation affects profitability and operational efficiency in the oil and gas industry. Accurate allocation impacts financial reporting, tax obligations, and investment decisions. Activity-based costing (ABC) methodologies are often used to link expenses directly to production activities. Adherence to financial reporting standards is paramount in the oil and gas industry, given the sector’s complexity and the significant financial stakes involved. These standards provide a framework for consistent and transparent financial reporting, which is crucial for investor confidence and regulatory compliance. One of the key aspects of joint venture accounting is the use of joint interest billing (JIB) statements.
Revenue Recognition Methods
This is an iterative process with the management team to derive an agreed upon project plan, key business objectives and budget. Before you embark on an ERP implementation it is essential to avoid costly mistakes to minimize disruptions, improve reporting and decision-making abilities. By clearly defining and prioritizing objectives and evaluating the costs of significant items, companies can establish a solid foundation for a road map, ensuring expectations and deliverables are met on time and within budget.
Accurate financial reporting is essential for stakeholders to assess the profitability and sustainability of these operations. The oil and gas industry operates within a complex financial framework, where precise accounting practices are essential for accurate reporting and decision-making. Specialized Production Entity (SPE) accounting ensures companies maintain transparency and compliance with regulatory standards, addressing the unique financial challenges faced by companies in this sector.
Scientific Drilling International, Inc.
Starting in 2026, large public U.S. companies will be required under the new SEC rule to report scope 1 and 2 emissions that are deemed to be material to investors. The new rule was finalized on March 6, 2024, almost two years after the draft rule was proposed. The draft rule had required disclosure across all three scopes, but the requirement to report scope 3 was not included in the final rule. For example, the European Commission adopted the European Sustainability Reporting Standards (ESRS) for use by all large companies listed in the E.U. The European Sustainability Reporting Standards directly reference GHG Protocol’s standards and are expected to impact 50,000 companies across the European Union. In the past few years, GHG reporting has been integrated into law in many areas of the world.
Why Baker Tilly?
These assessments rely on a combination of seismic data, well logs, and production history to create a detailed subsurface model. Advanced software tools like Petrel and Eclipse are often employed to simulate reservoir behavior and predict future production. Another critical aspect of joint venture accounting is the allocation of costs and revenues how is sales tax calculated among the partners. This allocation is usually governed by the joint operating agreement (JOA), which outlines each partner’s share of costs and production.
Revenue Recognition
Oil and gas accounting involves specific tax considerations and compliance requirements. Companies must navigate various tax regimes and incentives designed to promote resource extraction while ensuring environmental protection. Specialized accounting practices help manage these obligations efficiently, thereby supporting strategic decision-making and long-term planning. Engaging consulting Medical Billing Process firms with expertise in oil and gas accounting can offer valuable insights and support for financial management initiatives.