Since 1989, the Institute of Petroleum Accounting at the University of North Texas in partnership with PricewaterhouseCoopers L.L.P. has conducted surveys of accounting practices in the oil and gas industry. In the first of a two-part article, the authors compare some important accounting practices and how they have changed over time as reflected in the surveys of 1994, 1997, and 1999. Part Two of this article will appear in the spring issue of the Petroleum Accounting and Financial Management Journal.

Changes in Accounting Practices in the Oil and Gas Industry during the 1990s. Styles, Alan K. and Coe, Teddy L., Fall/Winter 2001, pp. 1‑27.

Firms in the petroleum industry—producers as well as service-related companies—often engage in like-kind exchanges and frequently have assets that are involuntarily converted. A significant change in the depreciation of certain property that has resulted from the issuance of IRS Notice 2000-4 seeks to clarify the depreciation of Modified Accelerated Cost Recovery System (MACRS) property acquired in a Section 1031 like-kind exchange or an involuntary conversion covered under Section 1033. The new rules may prove beneficial to petroleum and service-related firms where the numbers related to the involuntary conversions and/or like-kind exchanges are material.

A Tax Update for Oil and Gas Firms: A New Wrinkle in the Depreciation Rules for MACRS Property Acquired in Like-Kind Exchanges or Involuntary Conversions. Ward, Dan R.; Metrejean, Cheryl T. and Ward, Suzanne Pinac, Fall/Winter 2001, pp. 28‑42.

Of all the relationships affecting the financial well-being of oil and gas royalty owners, perhaps none is more important than the relationship between the royalty owner and the operator of the oil and gas properties. This paper provides a broad survey of the duties and obligations owed by operators to royalty owners, the sources of those duties, and a very brief discussion of certain recent developments concerning a few of those obligations.

Duties of the Operator to Royalty Owners. Beatty, J. Robert, Fall/Winter 2001, pp. 43‑59.

A central assumption underlying the Auditing of corporate financial statements is that auditors are independent of their clients, both in fact and in appearance. The Securities and Exchange Commission (SEC) recently revised its auditor independence requirements. A particular focus of the new rules is the provision of non-audit services by financial statement auditors which the SEC feels has the potential to adversely affect independence and thus compromise the audit of the financial statements.

Non-Audit Fees in the Energy Sector: A Preliminary Analysis. Wilson, Jr., Thomas E., Fall/Winter 2001, pp. 60‑66.

The theory of capital is concerned with the allocation of resources over time. Firms and individuals, as economic agents, make decisions about additions to or reductions in the level of oil and gas reserves, and those decisions can affect both current and future well-being. This paper is an examination of how such decisions might be made in an optimal way. The author presents a general mathematical model of the accumulation process then applies the model of optimal allocation to the problem of the optimal use of oil and gas as nonrenewable natural energy sources.

Interest Rates and the Optimal Allocation of Oil and Gas over Time. Joyce, William, Fall/Winter 2001, pp. 67‑75.

Due to the importance of being the first in the marketplace, many companies often ignore or do not have the time or resources to address various tax issues that arise when developing a company's e-business strategy. An understanding of how taxes will impact a company's e-business transformation can add value to the e-business strategies being implemented. This article raises a variety of tax issues that should be considered when a company is undertaking an e-business initiative.

A Tangled Web: Tax Issues Arising in e-Business. Forrester, Melanie and Hahn, Kristin, Fall/Winter 2001, pp. 76‑94.

The recently announced super giant Kashagan discovery in the Kazakhstan sector of the North Caspian Sea is the world's largest discovery in three decades. Kashagan and Tengiz are the two largest fields in Kazakhstan—their oil reserves alone rival the United States' 22 billion barrels of oil, yet they have hardly begun to produce. At 20 billion barrels (if that is ultimately the figure) Kashagan would be the fifth largest oil field in the world, and the only one outside the Arabian/Persian Gulf region.

Kashagan and Tengiz—Castor and Pollux. Johnston, Daniel, Fall/Winter 2001, pp. 95‑119.

Improved delivery performance, shorter lead-times, lower inventories, early warning of problems, and faster problem resolution are major benefits of doing business electronically. Conducting business electronically requires continuing development of the technical infrastructure tools that one company's back office applications use to communicate with another.

Current Developments in e-Business and Enterprise. Hoffman, Jim and Riley, Jason, Fall/Winter 2001, pp. 120‑127.

The recently issued Statement 143, Accounting for Asset Retirement Obligations, addresses the retirement of tangible, long-lived assets and associated asset retirement costs. It amends the older Statement 19, Financial Accounting and Reporting by Oil and Gas Producing Companies in a number of ways.

Current Developments in Environmental Issues. Wright, Charlotte, Fall/Winter 2001, pp. 128‑131.

A report on the activities of the executive committee, the Board of Directors, and the various committees and subcommittees of the Council of Petroleum Accountants Societies (COPAS).

COPAS: An Update. Gear, Jon, Fall/Winter 2001, pp. 132‑141.