Fundamentals of Oil and Gas Accounting

Rating:
Summary: Excellent Textbook Approach
Review: This excellent textbook illuminates for beginners and veterans alike the wonderful world of oil and gas accounting -- which is more of an art than a science. It is clear and concise as to how to account for the acquisition and amortization of unproved property, though it does not offer advice for dealing with the obese lazy sluggards who typically take up space in oil company land departments, and go their merry ways without regard for proper financial record-keeping. FOOAGA properly instructs regarding the tracking and reporting of exploratory well costs, though it ignores the reality that operations personnel are notoriously lax about tracking well costs, thus rendering well-drilling cost accruals useless much of the time (typically leading to suprising late charges). The book wonderfully explains revenue interests and working interests, though it glazes over the reality that accounting for such activity is a nightmare in major oil companies who have cut back their accounting staffs to the bone (or idiotically outsourced their accounting staffs, completely demoralizing everyone and ensuring they will receive only the bare-bones, skeletal minimum efforts from their outsourced wage slaves) (and it doesn't mention all of the work that oil companies, hoping to operate on the cheap, have sent overseas to Bangalore sweat shops). While presenting textbook situations that look great on paper, this book kindly omits the sort of hell experienced by the oil companies whose hare-brained management bought the SAP accounting system -- which is probably the worst means ever devised for tracking oil/gas accounting activities.

Yes, this fine book paints a rosy picture and looks great on paper, but it doesn't really tell you about the poor chumps on the front lines of oil/gas accounting, struggling with all of the obstacles and idiocy they must overcome simply to close the books each month.