Petroleum Accounting and Financial Management Journal

Fall/Winter 1989 Vol. 8 № 3
Current Updates in Oil and Gas Taxation 1
Richard S. Mark

Although it is unlikely that major income tax legislation directly affecting the oil and gas industry will pass Congress during 1989, there is a possibility that the Marginal Energy Producers Incentive Act of 1989, introduced by Senator Dole will be enacted. Professor Mark summarizes the major provisions of this bill and of the Revenue Reconciliation Act of 1989. In addition he reviews several court decisions and several IRA Rulings directly related to the industry.

Current Updates in Oil and Gas Taxation. Mark, Richard S., Fall/Winter 1989, pp. 1‑6.

What Does the Future Hold for the Independent Producer? 7
L. Frank Pitts

Frank Pitts, one of America's visionary independent producers, suggests that the future is bright for the oil and gas independent who has courage and is willing to take advantage of the opportunities offered, especially in gas production and marketing. Mr. Pitts calls for independents to embrace reasonable environmental standards and to utilize new technological developments that make exploration, development, and production more efficient. He concludes that those "independents with vision are going to discover new and profitable horizons in the 1990s."

What Does the Future Hold for the Independent Producer? Pitts, L. Frank, Fall/Winter 1989, pp. 7‑13.

Financial Reporting Practices in the U. S. Petroleum Industry: Survey of 1988 Financial Reports 14
Nasser A. Spear and Edward B. Deakin

Accounting practices in the U. S. Petroleum industry are subject to a number of different considerations than in other industries. This review of 150 oil and gas company corporate annual reports shows how the industry accounted for assets, liabilities, and equities as well as the treatment of supplemental disclosure and footnote items. The article includes many examples of presentations drawn from these reports.

Financial Reporting Practices in the U. S. Petroleum Industry: Survey of 1988 Financial Reports. Spear, Nasser A. and Deakin, Edward B., Fall/Winter 1989, pp. 14‑87.

Computation of the Foreign Tax Credit: An Update 88
John Ellis Price

Under the 1986 Tax Reform Ad, massive changes were made in the computation of the foreign tax credit. Many of these changes are not yet fully appreciated by taxpayers and tax return preparers. For oil and gas producers with foreign operations, full compliance with the law may necessitate major changes in tax records. Dr. Price examines the most important elements in computing the credit, especially for oil and gas producers.

Computation of the Foreign Tax Credit: An Update. Price, John Ellis, Fall/Winter 1989, pp. 88‑105.

A Study of Subsequent Events in the Life of Oil and Gas Companies Receiving Going Concern Qualified Opinions 106
Phillip L. Little, David Robison, James Johnston

Little research has been conducted into the question of what happens to audited companies after they have been given qualified opinion by their auditors. The research reported on in this article studied continuing adverse conditions and events, along with mitigating factors, following the issuance of qualified opinions of 34 oil and gas companies in the years 1981-1984. Even though only one company of the 34 involved actually railed to exist, many of the others continued to suffer adverse conditions.

A Study of Subsequent Events in the Life of Oil and Gas Companies Receiving Going Concern Qualified Opinions. Little, Phillip L.; Robison, David; and Johnston, James, Fall/Winter 1989, pp. 106‑115.

An Integrated Probabilistic Cash Flow Analysis Model for Projects Feasibility Studies 116
John P. Yu and Ziqing Zhauang

Investment projects must be justified on the basis of economic returns on investment and acceptable risk. This article presents a probabilistic cash flow analysis model, using a cash flow analysis spreadsheet on LOTS 1-2-3, for evaluating a C02 miscible flooding project. The model combines cash flow analysis, cost analysis, risk assessment and the impact of taxation into an integrated decision making tool.

An Integrated Probabilistic Cash Flow Analysis Model for Projects Feasibility Studies. Yu, John P. and Zhauang, Ziqing, Fall/Winter 1989, pp. 116‑136.

COPAS: The Organization 137
R. O. Beaverson

In the first of three articles dealing with the activities of COPAS, the Council of Petroleum Accountants Societies, Richard Beaver son, Executive Director of the organization, discusses the group's history, purposes, and organization. He explains many of the activities that are of special interest to accountants in the industry.

COPAS: The Organization. Beaverson, R. O., Fall/Winter 1989, pp. 137‑140.

The Impact of COPAS 141
Al E. McClellan

Mr. McClellan discusses some of the specific COPAS Bulletins and Interpretations that have had an important influence on the oil and gas industry. He points out that the various documents issued by COPAS are commonly accepted in the industry as having somewhat authoritative weight. McClellan maintains that because of the high degree of reliance given COPAS publications by accountants within the industry, broader consensus should be obtained before research papers and other publications are issued. He uses a recently issued research paper setting forth a standardized gas accounting procedure as an example.

The Impact of COPAS. McClellan, Al E., Fall/Winter 1989, pp. 141‑145.

Electronic Data Interchange 146
Jon H. Gear

COPAS has been very instrumental in the development of electronic data interchange programs in the oil and gas industry. These exchange programs have brought about tremendous changes in accounting procedures and in relationships between companies. Mr. Gear reviews a number of the most in port ant interchange programs now being used and addresses some of the most commonly expressed fears and concerns that accountants have about such programs.

Electronic Data Interchange. Gear, Jon H., Fall/Winter 1989, pp. 146‑153.