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Chart Of Accounts For Petroleum Exploration Company

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Chart of Accounts for Petroleum Exploration Companies

U.S. companies follow one of two methods of financial accounting for petroleum E&P activities: successful efforts or full cost. The successful efforts method has only the cost of successful efforts capitalized as oil and gas properties. Costs of exploratory dry holes, geological and geophysical (G&G) costs in general, delay rentals, and other property carrying costs are expensed.

The net unamortized capitalized costs are also amortized on unit-of-production methods whereby property acquisition costs are amortized over proved reserves and property development costs are amortized over proved developed reserves.

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Amortization is computed by lease (or property) or certain aggregations of properties as large as a field.

Under the full cost method all property acquisition, exploration, and development costs, even dry hole costs, are capitalized as oil and gas properties. These costs represent fixed assets, amortized on a country-by-country basis using a unit-of-production method based on volumes produced and remaining proved reserves.

The net unamortized capitalized costs of oil and gas properties less related deferred income taxes may not exceed a ceiling consisting primarily of a computed present value of projected future cash flows, after income taxes, from the proved reserves.

If a company drills five exploratory wells for $1 million each and only one finds proved reserves, the successful efforts method recognizes a $1 million asset, whereas the full cost method would recognize a $5 million asset. However, investors and stock analysts should be concerned about what the proved reserves (the real asset) are worth—an amount that may be substantially different from the capitalized historical costs.

Here are a comprehensive chart of accounts for petroleum exploration and production:

Chart of Accounts for Petroleum Exploration and Production Company

100-107 Cash

101 Cash in First National Bank
102 Cash in First State Bank
105 Special Deposits
106 Payroll Account
107 Petty Cash

110-119 Short-Term Investments

110 Marketable Securities
111 Overnight Interest Bearing Accounts

120 – 129 Accounts Receivable

120 Accounts Receivable—Oil and Gas Sales
121 Accounts Receivable—Gas Imbalances [if using the “entitlement” method]
122 Accounts Receivable—Gas Marketing
123 Accounts Receivable—Joint Interest Billings
124 Accounts Receivable—Employees
126 Accounts Receivable—Other Receivables
127 Accrued Receivables
127.001 Oil and Gas Sales
127.002 Accrued Interest
127.003 Other
129 Allowance for Doubtful Accounts

130 -139 Inventories

130 Inventory of Crude Oil [uncommon]
131 Inventory of Natural Gas Held in Storage

132 Inventory of Materials and Supplies
132.001 Field Yards [detailed by location and type of material]
132.002 Trucking Yards [detailed by location and type of material]
132.003 Warehouse Inventories [detailed by location and type of material)
132.004 Lower of Cost or Market Reserve

140-149 Other Current Assets

140 Prepaid Expenses
141 Current Portion of Long-term Receivables
142 Margin Accounts for Futures Trading
143 Other

210-219 Unproved Property Acquisition Costs

210 Unproved Property Purchase Suspense [detailed by project]

211 Unproved Leaseholds
211.001 Lease Bonus
211.002 Commissions
211.003 Landman Services and Expenses
211.004 Abstracting Fees
211.005 Capitalized Interest
F 211.006 Delay Rentals
F 211.007 Other Carrying Costs
211.999 Transfers to Proved Mineral Interests
219 Allowance for Impairment of Unproved Properties

Note:

  • Detailed by property or by groups of properties or by groups of properties as appropriate]
  • Other separate, similar unproved property accounts may be used for other types of economic interests, such as #212 for fee interests, #213 for royalty interests, #214 for overriding royalty interests, #215 for net profits interests, and #216 for volume production payments.]
  • The conventional term “unproved property” refers to unevaluated property. Once a property is evaluated as not having proved reserves, the capitalized acquisition costs are either expensed for successful efforts to Account 800, Exploration Expenses, or reclassified for full cost to Account 227, Abandoned and Worthless Property.

220-226 Proved Property Acquisition Costs

221 Proved Leaseholds [detailed by lease] [Other separate, similar proved property accounts may be used for other types of economic interests, such as #222 for fee interests, #223 for royalty interests, #224 for overriding royalty interests, and #225 for net profits interests or proved production payments.]

S 226 Accumulated Amortization of Proved Property

227-229 Capitalized Costs of Unsuccessful Efforts

F 227 Abandoned and Worthless Properties
F 228 Impairment of Unproved Properties
F 229 Unsuccessful Exploration Costs

230- 239 Proved Property Well and Development Costs

231 Intangible Costs of Wells and Development [all with appropriate level of well or field detail]
F 231.001 Well Drilling and Completion
S 231.001 Successful Exploratory Wells
S 231.002 Successful Development Wells
S 231.003 Development Dry Holes
231.004 Intangible Capitalizable Workover Costs

[rare; workovers are generally repairs which are expensed as production costs]
231.005 Enhanced Recovery Projects
231.006 Other Intangibles
231.007 Accrued DR&A Costs

S 232 Accumulated Amortization of Intangible Costs of Wells and Development

233 Tangible Costs of Wells and Development [all with appropriate level of well or field detail]
F 233.001 Well Drilling and Completion
S 233.001 Successful Exploratory Wells
S 233.002 Successful Development Wells
S 233.003 Development Dry Holes
233.004 Tangible Workover Costs [rare]
233.005 Development Support Equipment and Facilities
233.006 Gas Processing Facilities [may be a separate section]
233.007 Enhanced Recovery Projects
233.008 Other Field Equipment
233.009 Allocated Tangible Cost of Acquired Properties

S 234 Accumulated Amortization of Tangible Costs of Wells and Development
235 Accumulated Amortization for Accrual of Future DR&A Costs [in lieu of Account 410]
F 236 Accumulated Amortization of Oil and Gas Property Acquisition, Exploration, and Development
F 237 Accumulated Impairment of Oil and Gas Property Cost Centers [by country]
F 238 Deferred Losses (Gains) on Sales of Properties

240-249 Work in Progress

240 Work in Progress—Geological and Geophysical Exploration
240.001 Geological and Geophysical Contract Work
240.002 Geological and Geophysical Services Other
240.003 Field Party Salaries and Wages
240.004 Field Party Supplies
240.005 Other Field Party Expenses
240.006 Charges for Support Facilities
240.007 Shooting Rights and Damages
240.008 Mapping Expenses
240.009 Equipment Rental
240.010 Other Geological and Geophysical Costs
240.011 Purchased Geological and Geophysical Data
240.012 Overhead
240.015 Transfers to Exploration Expense

241 Work in Progress—Intangible Costs of Wells and Related Development
241.001 Drilling Contract
241.002 Site Preparation, Roads, Pits
241.003 Bits, Reamers, Tools
241.004 Labor, Company
241.005 Labor, Other
241.006 Fuel, Power, Water
241.007 Drilling Supplies
241.008 Mud and Chemicals
241.009 Drill Stem Tests
241.010 Coring, Analysis
241.011 Electric Surveys, Logs
241.012 Geological and Engineering
241.013 Cementing
241.014 Completion, Fracturing, Acidizing, Perforating
241.015 Rig Transportation, Erection, Removal
241.016 Environmental and Safety
241.017 Other Services
241.018 Overhead
241.019 Miscellaneous
241.025 Capitalized Interest
241.028 Transfers to Exploration Expense -Dry Holes
241.029 Transfers to Proved Property Well and Development Costs

243 Work In Progress—Tangible Costs of Wells and Related Development
243.030 Tubular Goods
243.031 Wellhead and Subsurface Equipment
243.032 Pumping Units
243.033 Tanks
243.034 Separators and Heater-Treaters
243.035 Engines and Power Equipment
243.036 Flow Lines
243.037 Miscellaneous
243.038 Installation Costs Surface Equipment
243.045 Capitalized Interest
243.048 Transfers to Exploration Expense -Dry Holes
243.049 Transfers to Proved Well and Development Costs

244 Work in Progress—Workovers [usually a production expense]
245 Work in Progress Support Equipment and Facilities
246 Work in Progress Gas Processing Facilities
247 Work in Progress Enhanced Recovery Projects
248 Work in Progress—Other Field Equipment

258-259 General Support Equipment and Facilities

258 Cost of General Support Equipment and Facilities [detailed by facility or unit]
259 Accumulated Depreciation of General Support Equipment and Facilities

260-269 Other Plant and Equipment

261 Autos
262 Office Equipment
263 Buildings
264 Land
268 Other
269 Accumulated Depreciation

270-279 Notes Receivable

270 Notes Receivable—Trade
271 Notes Receivable—Production Payments
272 Notes Receivable—Co-owners
273 Notes Receivable—Officers and Employees
274 Notes Receivable—Other

280-289 Other Assets

280 Pipeline Demand Charges
281 Stock of Subsidiaries
282 Other Stock Investments
283 Cash Surrender Value of Life Insurance
284 Investments in Hedging Instruments
289 Other

290-299 Deferred Charges

290 Deferred Tax Asset
291 Deferred Loss on Hedging of Future Production
292 Deferred Expenses Recoverable Under Foreign Production Sharing Contracts
293 Other Deferred Charges

300-349 Current Liabilities

301 Vouchers Payable
302 Revenue Distributions Payable
303 Lease Bonuses Payable
304 Revenues Held in Suspense
305 Advances from Joint Interest Owners
306 Gas Imbalance Payables [if using “entitlement” method]
307 Accrued Liabilities
310 Short-Term Debt
311 Current Portion of Long-Term Debt
320 Production Taxes Payable
321 Ad Valorem Taxes Payable
330 Federal Income Taxes Payable
331 State Income Taxes Payable
332 Payroll Taxes Payable
335 Other Current Liabilities

350-369 Clearing, Apportionment, and Control Accounts

350 District Expenses
351 Region Expenses
352 Support Facility Expenses
360 Revenue Control Account
361 Billing Control Account

400-409 Long-Term Debt

401 Notes Payable
402 Mortgages Payable
403 Bonds Payable
404 Production Payments Payable as Debt
405 Commercial Paper
406 Capitalized Lease Obligations
407 Debt Premium
408 Debt Discount
409 Portion Reclassified as Current

410-419 Other Long-Term Liabilities

410 Accrual for Future Site Restoration [net DR&A] Costs
411 Other Environmental Liabilities
412 Accrued Pension Liability
420 Deferred Income Taxes

430-439 Other Deferred Credits

430 Deferred Revenue for Prepaids
431 Deferred Revenue for Volume Production Payments
432 Deferred Gain (for future commitments on certain property sales)
433 Deferred Gain on Hedging of Future Production

500-599 Stockholder’s Equity

500 Preferred Stock
501 Common Stock
505 Additional Paid-In Capital
525 Retained Earnings
530 Dividends

600-699 Revenues [generally net, reduced for royalties due others]

601 Crude Oil Revenues
602 Gas Revenues
603 NGL Revenues
604 Royalty Oil Revenues
605 Royalty Gas Revenues
606 Royalty NGL Revenues
607 Revenues from Net Profit Interests
610 Gain (Loss) on Hedging the Company’s Revenues
615 Gain (Loss) on Trading of futures, Options, and Derivatives
620 Gains on Property Sales [rare for Full Cost]
625 Interest Income
630 Other Income

701-709 Marketing Expenses

701 Oil Marketing Expenses
702 Gas Marketing Expenses
703 NGL Marketing Expenses
710 Lease Operating Expenses

710 Lease Operating Expenses
710.001 Salaries and Wages
710.002 Employee Benefits
710.003 Contract Pumping Services
710.004 Well Services and Workovers
710.005 Repairs and Maintenance of Surface Equipment
710.006 Fuel, Water, and Lubrication
710.007 Supplies
710.008 Auto and Truck Expenses
710.009 Supervision
710.010 Ad Valorem Taxes
710.011 Production Taxes and Severance Taxes
710.012 Other Taxes
710.013 Compressor Rentals
710.014 Insurance
710.015 Salt Water Disposal
710.016 Treating Expenses
710.017 Environment and Safety
710.018 Overhead
710.019 Shut-in and Minimum Royalties
710.020 Other Royalties (where appropriate)
710.021 Pressure Maintenance
710.022 Other

725-749 Depreciation, Depletion, and Amortization [DD&A]

F 725 Depreciation, Depletion, and Amortization
S 726 Amortization of Proved Property Acquisition Costs
S 732 Amortization of Intangible Costs of Wells and Development
S 734 Amortization of Tangible Costs of Wells and Development
735 Amortization for Accrual of Future DR&A Costs
739 Depreciation of General Support Equipment and Facilities
749 Depreciation of Other Plant and Equipment

760-761 Loss on Impairment of Long-Lived Assets

760 Loss on Impairment of Long-Lived Assets
F 761 Provision for Impairment of Oil and Gas Assets

S 800-899 Exploration Expenses

S 801 Geological and Geophysical Expenses
S 801.001 Geological and Geophysical Contract Work
S 801.002 Geological and Geophysical Services Other
S 801.003 Field Party Salaries and Wages
S 801.004 Field Party Supplies
S 801.005 Other Field Party Expenses
S 801.007 Shooting Rights and Damages
S 801.008 Mapping Expenses
S 801.009 Equipment Rental
S 801.010 Other Geological and Geophysical Costs
S 801.011 Purchased Geological and Geophysical Data
S 801.012 Overhead

S 802 Carrying and Retaining Undeveloped Properties
S 802.001 Rentals [alias Delay Rentals]
S 802.002 Ad Valorem Taxes
S 802.003 Title Defense
S 802.004 Record Maintenance

S 803 Test-Well Contributions

S 803.001 Dry-Hole Costs
S 803.002 Bottom-Hole Costs

S 804 Unsuccessful Exploratory Wells [i.e., Dry Holes]
S 804.001 Intangibles
S 804.002 Tangibles

S 805 Unsuccessful Exploratory Stratigraphic Test Wells
S 805.001 Intangibles
S 805.002 Tangibles

S 806 Impairment, Amortization and Abandonment of Unproved Properties

900-919 General and Administrative Expenses

901 Officer’s Salaries
902 Other Salaries
903 Employee Benefits
904 Rent
905 Office Supplies
906 Utilities
907 Dues and Subscriptions
908 Travel and Entertainment
909 Legal and Auditing
910 Insurance
911 Taxes Other Than Income
912 Contributions
918 Miscellaneous G&A Expense
919 Operator’s Overhead Recovery

920-929 Interest Expense

920 Interest on Debts
921 Other Interest
922 Gain (Loss) on Hedging of Interest Expense
923 Transfer for Interest Capitalized
930 Losses on Sales of Property
931 Provisions for Restructuring

940-949 Income Tax Provision

940 Current Federal Income Taxes
941 Current State and Local Income Taxes
942 Current Foreign Income Taxes
945 Deferred Federal Income Taxes
946 Deferred State and Local Income Taxes
947 Deferred Foreign Income Taxes
960 Extraordinary Items

For better understnding about chart of account for petroleum exploration and production company, you may want to read the first page of this post where you can learn a little bit abour how organization of petroleum exploration and production and its accounting department are structrurized. To do so, use the page navigation below:

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3 Comments

3 Comments

  1. Nov 5, 2010 at 2:12 pm

    very useful. Thanks. would be thankful if you provide chart of account for manaufacturing unit also.

  2. Jan 18, 2011 at 1:51 pm

    THANKS A LOT. I WAS ABLE TO UNDERSTAND THE VARIOUS TYPES OF ACCOUNTS MAINTAINED IN A PETROLEUM COMPANY. I HOPE THIS WOULD BE USEFUL FOR OTHERS TOO.

  3. Jonathan

    Aug 11, 2012 at 3:34 am

    Dear Mr. Putra,

    Thanks very much for this information it really helps me a lot.

    Regards,

    Jonathan

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