AUDITING GAS MEASUREMENT AND ACCOUNTING SYSTEMS

Class # 7040.1

Johna M. Smothermon
Senior Measurement Auditor
SandRidge Energy
123 Robert S Kerr
Oklahoma City, Oklahoma USA

Introduction
An audit is an investigation of records to determine the accuracy of compliance and implementation. Performing
an audit or getting audited does not need to be viewed as a negative but as a double check. Since there are
human errors and technological errors, double checking or auditing the data is a precaution that is used by
companies. Both parties want the gas that is being produced measured with the highest accuracy possible.
Auditing does just that and has the ability to benefit either the producer or the buyer of natural gas.
The decision to perform an audit can come from either a warranted reason or procedural maintenance.
Procedural maintenance audits are routine and verify that contractual standards are being upheld. Large
producing volume, discrepancies, or known problem areas are all warranted reasons for an audit. Auditors can
use their discretion on when and where an audit is deemed necessary.
Many factors are involved in gas measurement, so it is no surprise that there are several factors that need
reviewing and certain steps to take when auditing measurement.
Information Needed
When performing an audit, certain information is required for the review. Per API 21.1, the following is required for
an audit:
 Quantity Transaction Records (Original)
 Quantity Transaction Records (Corrected with included reason)
 Gas Analysis
 Configuration Logs
 Event logs
 Field Test Reports
This data is pertinent for carrying out an audit. Depending on the scope of the audit, hourly and daily volumes
may be required. With hourly volumes, an auditor can identify the exact hour a problem may have occurred.
Many measurement software systems have made data extraction easier for an audit by allowing electronic data
reports and transaction logs to be completed and sent with little effort made by the analyst preparing the data.
Electronic data is also easier for an auditor to work with because it can easily be put into a system to help with the
analysis of the data.
Along with the required data for an audit, the contract is also essential. The contract clearly identifies standards,
equipment, and units that both parties have agreed upon. There could be special provisions listed in the contract
for different stations.
Requesting an Audit
The first step in performing a measurement audit is sending a formal written request. An audit request letter
needs to include:
 Meter(s) in question
 The dates that are being audited
 Data that is requested per API 21.1
 A time period for which the data should be forwarded
 Where and how the data should be forwarded
The letter can either be sent as a hard copy or electronically. Every company is different in the way audits are
handled, so it is best to find out the preferred method.

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Analyzing Data
When performing an audit and check measurement is involved, it is best to verify the check measurement is in
good working order and up to date on calibrations and gas sampling before the purchaser meter is questioned.
Check measurement is a great way to determine if and where measurement problems exist. Some factors to
compare and questions to ask are:
 Volume differences (if using check measurement)
 Which meter is reading higher and by what percentage? Most companies look for variances that
are above 2% with check measurement.
 Is the difference consistent or does it change during the month?
 Could there be a potential meter freeze due to the weather conditions?
 If looking at daily data, is there difference in the contract hour between the two meters?
 Differential Pressure
 Is it in acceptable range for the meter type?
 Is it reading high or low?
 Temperature
 Is the temperature so low that there could be no flow?
 Are there any abnormalities in the data?
 Is the temperature consistent with that of the sales meter?
 Static Pressure
 Is the pressure within the terms of the contract?
 Is the pressure being calculated correctly (PSIA vs. PSIG)
 Is the pressure lower than atmospheric pressure?
 Possible sign of zero volume
 Flow Time
 Is there a full day of flow?
 Do either the check meter or sales meter show a full day of flow when the other does not?
 Plate Size and Pipe Diameter
 Is the beta in an industry accepted range?
 Do the sizes correlate with what is listed on the calibration report?
 Is the plate installed facing the correct direction?
 Calculation method used
 Is this the correct calculation as defined in the contract?
 Gas analysis
 When was the last sample taken?
 If there is a check, is the analysis similar?
 Is the analysis comparable with previous samples?
 Calibration reports
 Any noticeable variances in the calibration?
 Was the plate checked and/or changed?
 If the volume changed after a plate change, could be possible sign of a bad plate size
(not catching all the flow or over-ranging) or backwards plate.
 Was there a witness present? Did the witness note anything during the calibration?
 What is the date on the calibration? When is the next calibration due according to the contract?
 Pumper reports
 Did the pumper note any changes?
 Event reports
 Are the events for the calibration correct?
 Are there any events at a time where there is a change in the volume difference against a check
meter?
 Configuration and Characteristics
 Does the configuration match to the standards in the contract?
 What is the low flow cut off?
 Meter Station
 How is the station set up?
 Is there a possibility for pulsation or turbulent flow?
 If there is a check, is it independent or piggy backed?

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If no error is found, but there is still a discrepancy, the field equipment should be thoroughly looked at again to
ensure everything is working properly.
Analyzing the data can be done several different ways depending on personal preference. A few ways to compare
the data are measurement software systems, computer software (e.g. Excel), and company generated reports.
The way that the data is reviewed is essentially the same regardless of which avenue is used.
Common Errors
There are several problems that can cause the measurement to not read accurately. Here are some common
errors that are found:
 Orifice Plate
 Wrong plate size or meter tube size listed in meter
 Plate size that is too big or small
 Over-ranging or missing flow due to low flow cutoff
 Plate in backwards
 Damaged or dirty plate
 Missing data
 Overlooked missing data
 Edited out daylight savings hours (if company uses Daylight Savings there should be 25 hours on
one day in the Fall and 23 hours of flow one day in the spring)
 Meter not put in service at first sales or back in service after maintenance
 Gas analysis
 Incorrect analysis applied
 Bad analysis that does not represent the make-up of the gas
 Meter Out of Service
 Equalizer valve left open
 Meter being bypassed
 Leaky seal ring
 Meter freezing
 Dead battery
 Bad transducer
 Meter out of calibration
 Fluids in the line
 Pulsation
Allocations
Every allocating program should be audited at least yearly either internally or externally, per API 20.1. Allocations
were developed to ensure that all parties were treated fairly and uniformly. To audit an allocation, the well tests
that show the quality and quantity of the well site should be obtained. These tests should be performed
periodically and the guidelines should be listed in the contract. These well tests determine how the allocation
calculation prorates the available sales volume. The available sales volume is the final known sales volume that
has been calculated to adjust for shrinkage, fuel gas, flare gas, lift gas, and other factors. The calculation method
should also be reviewed for an allocation audit. Since the purpose of an allocation is uniformity, the audit should
determine that the allocation is still meeting that purpose.
Requesting Adjustment
If an error is found and an adjustment is warranted, a letter should be sent explaining the discrepancy. Along with
the letter, supporting documents and explanations should be included. Once an error and adjustment is agreed
upon by both parties, a follow-up should be made to ensure the correction is processed. A revised statement that
includes the necessary adjustments should be sent to all personnel affected by the change.
Conclusion
The significance of the accuracy of gas measurement is vital to the bottom line of a company’s revenue. Every
company needs to be able to assure that their measurement is as accurate as possible. Audits ensure that the
measurement is true and any problems found get fixed no matter who is at fault. Every company wants to pay and
be paid for the correct amount of gas that runs through the pipelines.

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References
American Petroleum Institute (API). Manual of Petroleum Measurement Standards. Chapter 20.1 “Allocation
Measurement.” September 2011.
American Petroleum Institute (API). Manual of Petroleum Measurement Standards. Chapter 21.1 “Flow
Measurement Using Electronic Metering Systems.” February 2013.

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