Should I Use the Third Party Utility Well Status or Production Volume Method?

The utility is configured to use one of two methods to determine Maintenance Fees (TPA Statuses).

Production Volumes - The presence of any volumes (oil, gas, water or injection) for a given month will cause a 'Producing' type status to be proposed for that month, while the absence of any volumes generates a 'Non-Producing' type status.
Well Status - Industry data stores the history of well statuses with effective dates. These well statuses effective dates are used to determine billing dates. If a well changes from producing to non-producing mid-month then the well status effective date is used to charge out partial months.

The method chosen only impacts how maintenance fees are invoiced. One-time fees and drilling fees will get a proposed start billing dates if the well has spud.

Drilling rates are proposed for the period from spud date to rig release date. If the well has not been drilled than a TPA Status does not have to be entered in the Maintenance Fees section of the user well. However if the well has been drilled then a TPA Status should be added with a Start Date so that the Third Party process knows when to start invoicing. The Third Party Update Utility will propose a different TPA Status if the TPA Status is incorrect. A drilling TPA Status will not be proposed if the Maintenance Fees Start Date is more recent than the spud date.

Note: There will be situations where you may not want to use this utility. You can specify Exclude from Utility at the user well level, so that other user wells on the same agreement can still use the utility. Excluded user wells will be maintained manually.

Note:

The following items should be considered prior to implementation to help determine if the well status or the production volumes method is more suitable:

Consideration	Well Status	Production Volumes

Consideration	Well Status	Production Volumes
I have many agreements with both producing and non-producing types. I need the utility to handle different rates for non-producing (i.e. non-producing vs abandoned)?	Yes	Does not (exclude from utility on user well tab and maintain manually)
I have many agreements with service wells. I need the utility to handle different rates for service wells?	Yes	Does not (exclude from utility on user well tab and maintain manually)
I prefer to use actual production volumes for a well to determine if a producing rate should be charged because the well status is not always updated when a well stops producing?	No, Status date is used	Yes
I do not want to invoice for a full month if the well stopped producing mid month?	Yes	Will invoice full month
Are there any issues known about using well status? Although the well status method produces accurate results in most cases, an incorrect TPA Status may be proposed if the non-producing event has an industry well status with a date that is later than the date on the well status for the producing event.	Non-producing rate would be charged	Not an issue
Are there any issues known about using production volumes? We have seen companies make adjustments to prior periods for production data. So if production volumes were not originally reported and then are adjusted later the process will charge a non-producing rate and will not go back and pick up the change in production data.	Not an issue	Is an issue

Note: Although the drilling status is required on the Maintenance tab a drilling TPA Status will not be proposed if the Maintenance Fees Start Date is more recent than the spud date.