The production of natural gas involves gathering the gas by a pipeline or sending it directly to a transmission line for delivery to the consumer or to a gas plant for processing. This article examines some of the processes and variables that can impact natural gas liquid allocations and reviews an example of the computations performed to calculate a given well's heating value and hydrocarbon liquid content. The author performs a hypothetical plant allocation for two example wells, values the resulting products, compares the financial results of the allocations, and discusses the reporting that may be made to the various owners of the wells.

Natural Gas Liquid Allocations. Wamsley, Rick, Fall/Winter 2000, pp. 1‑16.

A simple rule of thumb should resolve any royalty issue: if the royalty relies upon the performance results of the producer, there will be a covenant implied. If the royalty does not rely upon the performance results of the producer and expressly states the standard for royalty payment, the court should not imply a covenant. The parties to a lease need to understand that "fairness" has nothing to do with the agreement of the parties. The moral of the story concerning royalty rights in an oil and gas lease is to pay closer attention to drafting the agreement and setting forth the intentions of the parties in such a way as to resolve any doubt.

Natural Gas Royalties–Lessor vs. Lessee and the Implied Covenant to Market. King, Jeff, Fall/Winter 2000, pp. 17‑29.

The Oklahoma courts have issued more gas balancing decisions than the courts of any other state. This paper provides an overview of the manner in which the published decisions of the Oklahoma courts have addressed certain issues involving production imbalances and also reviews two preprinted model form gas balancing agreements developed during the 1990s to clarify gas balancing rights and remedies.

Gas Balancing Issues. Christiansen, Mark D., Fall/Winter 2000, pp. 30‑51.

This is the first installment of a two-part article on crime and punishment in the petroleum industry. The subject of many of the statutes discussed in this article is the duty of oil and gas operators to maintain accurate records and report information correctly. In addition to violations of environmental laws, oil companies and their executives have been found guilty of mail fraud, wire fraud, income tax evasion, and money laundering. While most violations are not as serious as income tax evasion, failure to follow the law can have significant business and civil liability implications. Part Two of this article will appear in the Spring 2001 issue of Journal.

Crime in the Oil patch. Richardson, Susan R., Fall/Winter 2000, pp. 52‑70.

This paper investigates the possibility of defeasance as an approach to reducing the cost of debt capital of two electric utility cooperatives in Alaska. Unlike investor-based utilities, the two utilities in question—Chugach Electric Association and Matanuska Electric Association—are both cooperatives whose boards of directors have been hostile to each other for the last decade. The proposed acquisition has divided the communities in Alaska's Railbelt area.

Evaluation of Hostile Mergers and Acquisitions of Electric Cooperatives: Chugach vs. Matanuska. Essayad, Musa and White, Dominic, Fall/Winter 2000, pp. 71‑105.

An update of the activities of the various activities of the committees and subcommittees of the Council of Petroleum Accountants Societies.

COPAS: An Update. Gear, Jon, Fall/Winter 2000, pp. 106‑115.

This column provides an update on the current status of the exposure draft on Accounting for Obligations Associated with the Retirement of Long-Lived Assets, along with a summary of the comments from those who submitted written responses to the Board. The major concerns as reflected by the comments were (1) scope, (2) liability recognition and obligating events, (3) initial measurement of the future asset retirement obligation (ARO) liability, (4) subsequent measurement of the ARO liability, (5) financial statement disclosures, and (6) transition.

Current Developments in Environmental Issues. Wright, Charlotte, Fall/Winter 2000, pp. 116‑119.

Economic modeling and risk analysis are part art, part science. Unfortunately, the science typically outpaces the art, and the artistic aspect of the exercise of cash flow analysis begins with the understanding that all economic models are flawed. This is the first installment of a two-part article which will conclude in the Spring 2001 issue of the Petroleum Accounting and Financial Management Journal.

Current Developments in Production Sharing Contracts and International Petroleum Concerns: Economic Modeling/Auditing: Art and Science. Johnston, Daniel, Fall/Winter 2000, pp. 120‑137.

Yes, that "e". The one seen in every ad, TV commercial, and technology pitch in the past 18 months. The Internet moved from a novel technology to a vital part of our economy in record time. Companies need access to the e-business backbone (Internet) and a provider to connect to the commerce services needed. This solution exists today as forums. "Current Developments in Technology" will continue as a column written by Jim Hoffman.

Current Developments in e-Business and Energy: The Story of e. Hoffman, Jim and Derr, Trent, Fall/Winter 2000, pp. 138‑147.