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PJVA Coffee Discussion

PJVA Coffee Discussion. Operating Forecasts – Why we need them, or do we?. Operating Forecasts. Current obligations under our Operating Agreements (Unit and Facilities) regarding Operating Forecasts are being ignored. An Operating Forecast is not a Budget.

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PJVA Coffee Discussion

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  1. PJVA Coffee Discussion Operating Forecasts – Why we need them, or do we?

  2. Operating Forecasts • Current obligations under our Operating Agreements (Unit and Facilities) regarding Operating Forecasts are being ignored. • An Operating Forecast is not a Budget. • It is a tool for Operators to convey information to Owners to show they are a diligent Operator

  3. Operating Forecasts • As we operate on a monthly basis consider tieing the expenditure limit to a floor above which an Operating Forecast for approval is required. • Example: • Expenditure limit is $50,000 • Annual authority would be 12 months x $50,000 or $600,000 above which an operating forecast is required.

  4. Operating Forecasts • Turnaround Costs • Require separate approval unless the AFE numbers and amounts are attached to the forecast for approval • Third Party Fee Income and Current Fees must be included and basis of operating fees • Operating DOIs must be included and basis of calculation. • Property Taxes should be a flow through cost to be included in the operating cost base for TP fees

  5. Operating Forecasts • Monthly or quarterly information is not required, annual is sufficient • Detailed info per Functional Unit or Segment should include: • Labour and Vehicles • All chargeable employees supporting maintenance and operations • Electricity • Property Tax • Fees paid • Trucking • Disposal • Environmental Taxes (GHG, Carbon etc) • Overhead • Fee Income

  6. Operating Forecasts • Volume information to be included • Production, Injection, Disposal and Product volumes as applicable • Fuel, flare, vent volumes

  7. Operating Forecasts • Previous years forecasted and actual expenses and volumes included with variance explanations. • Operators are acting on behalf of Owners and are compensated with the Overhead they collect. • Owners receiving this information annually have a degree of trust that the Operator is acting diligently and fulfulling his obligations as Operator.

  8. Operating Forecasts • End of life operations (remediation and reclamation) which continue over a year should be included in the operating forecasts with the annual expected cost and AFE # for informational purposes.

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