Integration of operations from exploration to marketing generally means greater control and less economic risk. Producers can ensure a more steady market for their product if they are, at least in part, selling to themselves or to a related entity which needs product to refine and market. In turn, refiners can better ensure a steady supply of product if they are involved in exploration and production and a better demand for their product if they are involved in marketing. The concept is simply that each leg of the operation helps support the other and each operation serves as a potential profit center itself. A relatively stable integration can help to facilitate continuous exploration and development of oil and gas properties—which not only benefits oil and gas companies but lessors as well.

Royalty Issues Created by Marketing through Affiliates: Some Problems and Perspectives. Haynes, Craig, Fall/Winter 2005, pp. 1‑25.

This the second part of a two-part series covering like-kind exchanges. This installment covers multiple asset exchange rules, personal property exchange rules, real property exchange rules, depreciation recapture, and depletion/IDC recapture, as well as addresses some of the pros and cons of various partnership issues and exchanges.

Like-Kind Exchanges: The Basics and Beyond. Gelson, Andrew, Fall/Winter 2005, pp. 26‑51.

This is the first of a two-part series on partnership allocations for exploration and production partnerships. Because the upstream sector of the oil and gas industry makes extensive use of partnerships to finance drilling ventures and to spread risk, practitioners should have a fundamental knowledge of the rules for allocating partnership items, including the unique issues involving oil and gas depletion. Part Two of the series will appear in the Spring 2006 Journal and addresses the analysis required if the partnership is operating with nonrecourse debt (as is often the case in oil and gas exploration) and will also explore emerging issues involving abusive partnership allocations.

An Introduction to Partnership Allocations for the Exploration and Production Partnership. Adelberg, Dianne and Wilson, William H., Fall/Winter 2005, pp. 52‑63.

This is the first installment of a four-part series on accounting for the decommissioning of offshore oil and gas facilities in the Gulf of Mexico, the factors that impact these operations, the methods used to estimate decommissioning costs and liabilities, and how uncertainty can be incorporated into fair market valuation. Part One introduces SFAS 143, along with the regulatory requirements of offshore decommissioning, the business models, and the factors that influence decision-making. Parts Two through Four will appear in the next three consecutive issues of the Journal.

Accounting for Offshore Structure Retirement Obligations: Process and Factor Description. Kaiser, Mark J., Fall/Winter 2005, pp. 64‑91.

Interesting recent developments in exploration licensing provide a glimpse into the psyche and state of the industry. Throughout most of the 1980s and 1990s world oil prices ranged between $16.00/BBL to $20.00/BBL with an average of just over $18.00/BBL. Today prices are higher, and the industry appears to believe higher oil prices are here to stay. Recent license rounds in Libya support this view.

New Era for Petroleum Exploration Licensing. Johnston, Daniel, Fall/Winter 2005, pp. 92‑100.

FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations: An Interpretation of FASB Statement No. 143” (FIN No. 47) became effective for fiscal years ending after December 15, 2005. Implementation requires extensive review of the processes used in identifying and accounting for asset retirement obligations (AROs) as originally mandated by SFAS No. 143, “Accounting for Asset Retirement Obligations”. The FASB concluded that FIN No. 47 was necessary in order to provide clarity in situations where sufficient information exists to estimate the fair value of an ARO even where uncertainty exists regarding the timing and/or method of retirement.

FASB Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations: An Interpretation of FASB Statement No. 143". Wright, Charlotte, Fall/Winter 2005, pp. 101‑103.

A report on the activities and upcoming events of the Council of Petroleum Accountants Societies from the executive director, Scott Hillman.

COPAS: An Update. Hillman, Scott, Fall/Winter 2005, pp. 104‑115.