#038: Holdbacks As A Possible Solution to Plugging Liabilities with Dwayne Purvis

On this week’s episode, Tom and Phil are joined by Dwayne Purvis, a reservoir engineer and consultant. Dwayne shares his insight on Asset Retirement Obligations, most notably, well plugging liabilities.There are currently anywhere from 2 million to 2.5 million wells that need to be plugged nationwide. Dwayne came up with holdbacks as a way to cover well plugging liabilities by using all net income from a well during certain time periods. Tom, Phil and Dwayne discuss why this is an ongoing issue in the oil and gas world and Dwayne shares why he believes holdbacks could be part of the solution.

Highlights:

2:46 What are Asset Retirement Obligations?

8:43 The estimated number of wells that need to be plugged

11:47 What states have done to avoid the liability of plugging wells

13:43 The problem with using cash flows to fund plugging

14:52 What is a holdback?

19:49 Implications of holdbacks on joint operating agreements

24:11 Why PDP is actually high risk

27:03 ‘You can’t change what you don’t measure.’

About Dwayne Purvis:

Dwayne Purvis, P.E. offers consulting and advisory services for the oil and gas industry, building on two and a half decades in reservoir engineering and executive leadership as a consultant and operator. From engineering studies and reserve reports to strategic decision-making, Mr. Purvis helps operators and investors with reliable analysis for prudent decisions.

He has led or participated in hundreds of engineering studies over dozens of basins in the United States and abroad and advised on tactical and strategic decisions large and small. Mr. Purvis frequently speaks and writes on issues of shale reservoirs, the energy transition, commodity prices, decline curve analysis, and risk analysis.

He is a registered professional engineer in the state of Texas, member of SPEE, AAPG, SEG, SIPES and an active, 25-year member of SPE.

Connect with Dwayne:

www.dpurvisPE.com

https://www.linkedin.com/in/dpurvispe/

Twitter @dpurvisPE

About SherWare, Inc.

If you’re enjoying this episode, please subscribe to our podcast and share with a friend! We also love ratings and reviews on Apple podcasts.

SherWare creates software to simplify your accounting needs so you have more time to do the things that matter. We serve independent oil and gas operators, accountants and investors with a platform to manage their distributions and joint-interest billings on a platform — and we’re the only software on the market that can integrate with your QuickBooks company.

Click here to watch a demo of the software in action right now.

About COPAS:

COPAS provides expertise for the oil and gas industry through the development of Model Form Accounting Procedures, publications, and education. We are a forum for the active exchange of ideas which result in innovative business and accounting solutions.

Find a society near you.

www.copas.org

Click Here to Leave a Comment Below

>