Permian Producer Recovers $650,000 Related to Incorrect Processing Fees
Contract Compliance • Incorrect Fee Allocation
SituationA Permian Basin producer engaged AEGIS to provide marketing and commercial services for a complex set of assets. AEGIS quickly discovered an error in the settlement statements the producer was receiving related to processing fees. | SolutionAEGIS identified that processing fees of $0.85/MMBtu were being assessed on gross wellhead volumes. Contractually, these fees were to be assessed on net plant inlet (also known as gross wellhead less field fuel). |
OutcomeAEGIS notified the customer and contacted the operator responsible for the settlement statement. AEGIS provided the data it found to the operator and performed a full reconciliation of the impact on realized prices. The operator acknowledged the error and remitted $650,000 to the customer as a make whole payment. While the make whole payment was meaningful, the impact on future flows was much greater and resulted in significantly increased equity value of the well. |
