IOGC Royalty Configuration and Processes

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Overview

What is IOGC?

IOGC (Indian Oil and Gas Canada) is an organization committed to managing and regulating oil and gas resources on First Nations reserve lands. Royalties are collected by IOGC on behalf of First Nations. IOGC began using Petrinex data to support some of their internal systems in 2019 and was ongoing in 2020 and beyond.

For more information, see:

IOGC in Qbyte Metrix

The IOGC Oil and Gas Royalty functionality in Qbyte Metrix:

• Requires configuration of Reserves and Royalty Entity IDs. Wells and tracts are linked to Reserves. Royalty Entity IDs are linked to wells and units but can be overridden at the obligation for the well/tract.

• Utilizes royalty obligations and the Formula Builder to create royalty calculation details that match Rule Sets supplied by IOGC.

• Within the Formula Builder, IOGC specific System Values are available to assist in both the calculations and reporting of royalties.

• The Freehold and Override process (STEP06) calculates IOGC royalty obligations normally, but also runs additional processes to distribute GCA and prepare data for the Gas Statement, Oil Statement, and IOGC Data Submission processes.

• The IOGC Remittance Advice process captures the current month and amendment dollars by reserve for each Royalty Entity ID.

• Financial Entry Definitions (General Type INDN) require configuration to direct how account bookings should be done.

• The Financial Interface process (STEP07) creates vouchers that include all royalty, sales, and facility charge data. An option to create an IOGC Only Voucher is also available. 

• The Month End Corporate Close updates IOGC financial history so future amendments will only book the difference.

• Some system configuration for directories and other options is also required.

System Configuration

Corporate level configuration options exist to control IOGC processing.

Set up IOGC Options

Navigate to the Royalties tab (Administration > System Configuration > Royalties).

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Set up the Directory Path for Outbound IOGC Files

Navigate to the Directories tab (Administration > System Configuration > Directories).

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Enable IOGC Only Voucher Functionality (Optional)

If you need the ability to create a financial voucher that contains only IOGC royalty obligations, change the Active Indicator to Yes for the function type IOGC Only Voucher.

For more information on this functionality and when/how you might use it, see IOGC Only Voucher.

Navigate to the Function Implementation tab (Administration > System Configuration > Function Implementation).

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Configuration - Entities

Set Up Reserve Codes

Reserve Codes in Qbyte Metrix control the reporting of IOGC royalties for wells/tracts. 

1. Navigate to Reserve Code Maintenance (Royalties > IOGC > Reserve Codes).

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2. Select the appropriate Reserve Code and the Facility or Well/Tract Detail tab.

3. Link the wells/tracts under the Reserve (by facility and/or well/tract).

• Adding a battery or plant will add all wells, including unit tracts and unit wells. Unit wells will be flagged as Excluded.

The Well Master also has an input field for the Reserve Code. For wells, the Reserve can be changed under the well master (Wells > Maintenance > Royalties > Freehold/Override/IOGC).

A Confidential Well flag is available on the Well/Tract Detail tab of the Reserve Code Maintenance screen to enable the IOGC electronic file to include the producing hours. If the Confidential Well flag is set to Y, the well’s producing hours will be included in the file. The default is No, and the producing hours are not included.

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IOGC Royalty Configuration (Existing Entities)

Owner Master

Provincial Government Codes should always be entered for the provinces where the Owner is required.

A Federal Government Code is sometimes required for IOGC in cases where the code is only known to IOGC (i.e. purchasers that do not exist in Petrinex).

The gas purchaser Government Code is required in the IOGC Gas Statement.

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Well Maintenance

DOI Exceptions are available for IOGC Royalty use.

Royalties Tab:

• Totals sub-tab – Federal Percent

  • Wells require a Federal Percent greater than zero in order to be able to configure IOGC royalty obligations. Entering this Federal Percent then displays fields such as Royalty Entity ID and Reserve Code under the Royalties Tab > Freehold/Override/IOGC sub-tab.

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• Freehold/Override/IOGC sub-tab – the following fields appear if Federal % is greater than 0:

  • Add the Royalty Entity and/or Oil Royalty Entity ID to Well Masters.

• Do not prefix the ID with IO nor IG. These will be added to the reports and CSV file by Qbyte Metrix, depending on whether gas or oil data is being reported.

• A well can be linked to a maximum of one Royalty Entity and one Oil Royalty Entity, however, at the Well/Obligation an Override Royalty Entity ID can be entered. See Override Royalty Entity ID for more information.

• Reserve Code can be entered here or on the Reserve Code Maintenance screen.

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Unit Maintenance

Unit Master tab:

• Add the Royalty Entity and/or Oil Royalty Entity ID to Unit Masters.

• Do not prefix the ID with IO nor IG. These will be added to the reports and CSV file by Qbyte Metrix, depending on whether gas or oil data is being reported.

• A unit can be linked to a maximum of one Royalty Entity and one Oil Royalty Entity. But, at the Tract/Obligation, an Override Royalty Entity ID can be entered. See  Override Royalty Entity ID  for more information.

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DOI Maintenance

• DOI Exceptions are available for IOGC Royalty use.

IOGC Royalty Configuration

Contract Volume and Pricing By Royalty ID

This screen provides the ability to override all contract data for gas associated with an IOGC Royalty Entity ID or Reserve. 

By Reserve:

• Enter Contract(s) (Purchaser), Volume, GJ/Volume, Price/GJ

By Royalty Entity:

• Enter Contract(s) (Purchaser), Volume, GJ/Volume, Price/GJ

These contracts are used in: 

• IOGC Royalty calculation for gas and by-products.

• Royalty Obligation calculation based on the formula.

• Producing the IOGC Gas Royalty Statement.

When entering Contract Overrides, the first four characters of the Contract must be the Government Code of the Purchaser.

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Pricing by Royalty ID

This screen is where Royalty Entity ID specific fields are entered by Royalty Entity ID and Oil Royalty Entity ID. Royalty Entity IDs and Oil Royalty Entity IDs are created at a Well/Unit. This screen can also be used to create a new Royalty Entity ID.  

Create New Royalty Entity ID

Click the Create New button to create a new Royalty Entity ID. 

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This screen allows Royalty Entity IDs to be created. Once created, they can be used as an Override at the Royalty Obligation or linked to a Well or Unit. Oil Royalty Entity IDs can only be created at the Well or Unit.

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Delete Pricing by Royalty ID

A Royalty Entity ID or an Oil Royalty Entity ID can never be deleted, however the Pricing associated with them can be deleted, 

By Royalty Entity

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By Oil Royalty Entity

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IOGC Royalty Obligations Configuration

Navigate to Formula Maintenance (Royalties > Freehold/Override/IOGC > Formula Maintenance).

Create royalty formula(s) to calculate the IOGC royalty to be paid (Royalty Type: IOGC).

Royalty formulas can access data entered in the various Override fields (Contract Volume and Pricing or Pricing by Royalty ID). 

• Factor System Value: Price: IOGC Reported Sales

  • When used for an oil royalty obligation will retrieve Oil Reported Sales Price for the royalty entity associated with the well or unit (if royalty obligation is for a tract). If the Oil Reported Sales Price for the Royalty Entity is zero, then the average price for oil is calculated based on Qbyte Metrix sales volume and value.

  • When used for a gas royalty obligation it will first look for Contract Volume and Pricing data entry for the royalty entity associated with the well or unit (if royalty obligation is for a tract). When Contract Volume and Pricing data is found then an average price is calculated based on the contract information entered. When no Contract Volume and Pricing data entered, then the average price for gas is calculated based on Qbyte Metrix sales volume and value.

  • When used for any other product, it will retrieve Reported Sales Price for the specific product for the royalty entity associated with the well or unit (if royalty obligation is for a tract). If the Reported Sales Price for the Royalty Entity is zero, then the average price for oil is calculated based on Qbyte Metrix sales volume and value.

• Factor System Value: Production Volume

  • When used for an oil royalty obligation will retrieve Oil Override Production Volume for the royalty entity associated with the well or unit (if royalty obligation is for a tract). If the Oil Override Production Volume for the Royalty Entity is zero, then use the Qbyte Metrix calculated Oil Production Volume.

  • When used for any other product, it will retrieve Override Production Volume for the specific product for the royalty entity associated with the well or unit (if royalty obligation is for a tract). If the Override Production Volume for the Royalty Entity is zero, then use the Qbyte Metrix calculated Production Volume for the specific product.

• Factor System Value: Sales Volume

  • When used for an oil royalty obligation will retrieve Oil Override Sales Volume for the royalty entity associated with the well or unit (if royalty obligation is for a tract). If the Oil Override Sales Volume for the Royalty Entity is zero, then use the Qbyte Metrix calculated Oil Sales Volume.

  • When used for any other product, it will retrieve Override Sales Volume for the specific product for the royalty entity associated with the well or unit (if royalty obligation is for a tract). If the Override Sales Volume for the Royalty Entity is zero, then use the Qbyte Metrix calculated Sales Volume.

• Factor System Value: Price: IOGC Oil Reference

  • Will retrieve the Oil Reference Price for the royalty entity associated with the well or unit (if royalty obligation is for a tract). If the Oil Reference Price for the Royalty Entity is zero, then this will default to 25. Within your IOGC formula, you may be calculating a Heat Content, a Price per GJ, a Sales Price, and a Gross Royalty Percentage. To ensure these values are used in the corresponding IOGC Gas/Oil Statements (both the reports and the CSV files), you can use the following IOGC specific Store Factors to store the calculated data to ensure the calculated fields are used in reporting:

    • Store: IOGC Heat Content

    • Store: IOGC Price per GJ

    • Store: IOGC Reported Sales Price

    • Store: IOGC Gross Royalty Percentage

Override Royalty Entity ID

The Royalty Entity ID or the Oil Royalty Entity ID entered on the Well Maintenance (Royalties > Freehold/Override/IOGC tab) or the Unit Maintenance > Unit Master tab) which are both shown above, can be overridden for Wells and Tracts at the royalty obligation when the Royalty Type is IOGC. The list of Override Royalty Entity IDs displays pre-existing Royalty Entity IDs. A Royalty Entity ID to be used as an override can be created and set up in the Pricing by Royalty ID screen (See  IOGC Royalty Configuration and Processes#Create New Royalty Entity ID ).

When an Override Royalty Entity ID has been entered for the IOGC Royalty Obligation, during Step06 - Royalties processing, Qbyte Metrix will use the Override Royalty Entity ID.  

If an Override Royalty Entity ID has not been entered for the IOGC Royalty Obligation:

• For Oil IOGC Royalty Obligations, the Oil Royalty Entity ID entered at the Well/Unit will be used. If an Oil Royalty Entity ID has not been entered, the Royalty Entity ID at the Well/Unit will be used. 

• For non Oil IOGC Royalty Obligations, the Royalty Entity ID at the Well/Unit will be used. 

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Example of an IOGC Oil Formula

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Oil Royalty Statement

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Example of an IOGC Gas Formula

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Gas Royalty Statement

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Royalty Formula Sample Templates

Many Sample Royalty Formula Templates (including IOGC ones) can be viewed in the document below.

Royalty Formula Templates - Formula Details.pdf

IOGC Royalty Processing

Freehold and Override Royalty Processing (STEP06)

Most IOGC processing is done in Freehold and Override (STEP06) processing that is done by control group.

This process generates the data for the IOGC Oil/Gas Statements. When generating the IOGC Oil/Gas Statements, the following rules apply:

• Stored Factors (within the formula) such Store: IOGC Heat Content, Store IOGC Price per GJ, Store: IOGC Reported Sales Price, and Store: IOGC Gross Royalty Percentage will be used.

• If Stored Factors do not exist, then Contract and Price Overrides will be used (if entered).

• If none of the above is specified, then the system will calculate the Reported Sales Price, Gross Royalty Percentage, etc. from calculated data.

Sample Freehold and Override Royalty process (Step06) Warning/Errors:

• If a well is linked to a Royalty Entity and Reserve but the Royalty % is blank or 0.00%, Step 6 will create an error message in the Message Centre.

  • IOGC  Royalty Entity 888 is missing a royalty percentage.

• If a well is linked to a Reserve but is not linked to a Royalty Entity, Step 6 will create a warning message in the Message Centre.

  • Royalties did NOT all complete successfully. Well ACH COMM 1 is missing the Royalty Entity Number.

Financial Interface Processing (STEP07)

The Financial Interface process(es) by default will automatically include IOGC royalties with all other sales, royalty, and facility charge transactions. An additional option exists to create an IOGC Only Voucher. For more information on this functionality and when/how you might use it, see IOGC Only Voucher.

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IOGC Royalty Remittance Advice Process

This is a Month-End Summary process that is run for the current accounting date to gather all IOGC royalties calculated throughout the month, including amendments, for all regions.  

• Navigate to Royalty Remittance Advice (Royalties > IOGC > IOGC Royalty Remittance Advice).          

  • For the current month, the process includes all the calculated net royalties for each Reserve and Royalty Entity ID.

  • For amendments, the process retrieves previously net royalties less the revised and includes the difference for each Reserve and Royalty Entity ID.
    Note: The Remittance Advice process must be run before the Corporate Close as that process will update the Net Royalties to history.

  • The process can be run as many times as necessary before the Corporate Close is run. At that point, the process will be gathering data for the new Accounting Date.

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Buttons:

• The List Control Groups button displays all Control Group/Production Dates with IOGC royalty transactions for the current Accounting Date.

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• The Submit User is asked to Confirm the submission.

• The system provides a confirmation that the reports have been submitted. 

IOGC Royalty Remittance Advice - Qbyte Optix Report 

Navigate to (IOGC).

Royalty Payors are required to submit a completed Remittance Advice form along with the Royalty Payment cheque payable to the Receiver General for Canada monthly. The Remittance Advice report breaks by Reserve Code. Each Royalty Entity ID in the reserve with a current month royalty payable and/or adjustments for prior periods are included on the Advice. The Remittance Advice identifies each Royalty Entity ID and the period to which the payment applies, and enables royalty payers to amend payments made in prior periods.  

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IOGC Royalty Data Submission

This is a Month End process that creates electronic submission files for the IOGC Gas Royalty Statement and the IOGC Oil Royalty Statement that are required by the agency that governs IOGC royalties. The submission may be required to be run multiple times using different criteria to generate all output files based on your requirements.

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Click here for more information on IOGC Electronic Submissions

IOGC Only Voucher

Back to System Configuration     Back to Well Maintenance

Since the monthly due date for IOGC submissions (payments) is the 25th of each month, an option to create an IOGC Royalties Only voucher is available so IOGC transactions can be passed to the financial system before other monthly financial transactions are ready. This allows the user to match the IOGC Royalty Remittance Advice with actual Financial Accounting entries prior to the actual Month End processing. To use the IOGC Only Voucher functionality, the Function Implementation flag must be enabled (Administration > System Configuration > Function Implementation) and the Region must have the Allow Transaction Type Selection flag set to Yes (Administration > Region > Maintain Region Financial Configuration). 

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When submitting Preliminary Financial Interfaces or Final Financial Interfaces, the Transactions option of IOGC Royalties Only can be selected.

• When it is selected, the Financial Interface ID default will be appended with the text IOGC.

When submitting a Final IOGC Royalties Only voucher (versus a Preliminary), the IOGC transactions included on that voucher are considered finalized for the control group/month. Once IOGC transactions are finalized for a control group, they will be ignored on subsequently run Step 6 processing and/or Financial Interface processing (IOGC royalties for control groups that have been finalized will not be re-calculated or included on any vouchers).  

Finalized Control Groups/Production Dates will be identified in the Status tab of the Explorer screen along with the User that ran the Final voucher and the Date/Time. If for some reason the finalized IOGC Royalties need to be re-calculated and/or re-booked, the control group can be un-finalized on the Status tab of the Explorer screen using the Un-Finalize button.

Qbyte Optix Reporting

Generate Gas Royalty Statement (IOGC)

Qbyte Optix > Regulatory > IOGC

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Generate Oil Royalty Statement (IOGC)

Qbyte Optix > Regulatory > IOGC

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Generate Remittance Advice (IOGC)

Qbyte Optix > Regulatory > IOGC

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IOGC Only Voucher - Reports

Financial Interface Vouchers

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Royalty Owner Summary

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