Jen: This is The PKF Texas – Entrepreneur’s Playbook®. I’m Jen Lemanski, and I’m back again with Carlos Gomez, an Audit Manager and one of the faces of the PKF Texas Contract Compliance services team. Carlos, welcome back.
Carlos: Thanks, Jen.
Jen: I’ve heard a little bit of buzz in the marketplace about royalty relief. What is it? And what do our clients need to know?
Carlos: We’ve had some great opportunities to help some clients recover some royalties or some lost profits based on leases they operate in the gulf and along the coastlines; they just became a loss for certain months or quarter or a year. There’s different situations where it may be that well is drying up and it’s not producing as much as they expect, so it is the end of life or a certain special case that’s really been pushed lately by BSEE, which is the Bureau of Safety and Environmental Enforcement.
Jen: And so, what have we actually done to help them with this royalty relief?
Carlos: One of BSEE’s requirements is that there’s this true-up report that they call it; it’s basically an analysis of a month, year or quarter statement of the revenue and the expenses as the operation of the leases. They get certified by an independent public accounting firm. And so, we do that, but we also help our client to make sure that all those expenses are not only in accordance with GAAP, but that they meet all the specific requirements of the regulations that are laid out by BSEE.
Jen: Perfect. And this is pretty much for oil and gas companies, correct? Or does this impact any other industries?
Carlos: No. It’s specific to oil and gas lease operations in both the Gulf coast, but also along the East and Western seaports.
Jen: Perfect. Well, we’ll get you back to talk a little bit more about some contract stuff. Sound good?
Carlos: Yes, ma’am.
Jen: For more information about this and other topics, visit www.pkftexas.com/ContractCompliance. This has been another thought leadership production brought to you by PKF Texas – The Entrepreneur’s Playbook®. Tune in next week for another chapter.