Specifications include, but are not limited to: Operational Evaluation: Test of Monthly Settlement Calculations - Determine that the calculations of gas cost-of-service, operator service fee, and oil revenue sharing are in conformity with the Agreement. Test the Reasonableness of Operating and Maintenance Expenses Determine if the Operating and Maintenance costs included in the Operator Service Fee are appropriate and comparable with other similar company expenses. Test the Reasonableness of General and Administrative Expenses Determine if the General and Administrative Expenses included in the Operator Service Fee are appropriate and comparable with other similar company expenses. Review of Dominion’s overriding Royalty Interests - For exploratory properties subject to 10%, 7%, or 2-1/2% overriding royalties, determine that the royalties are being properly calculated and remitted to DEU. Review of Wexpro Costs/Allocations with Prior Years – Review and obtain an explanation of significant changes from prior year costs. Review of Affiliate and Parent Company Charges - Determine if affiliate and parent company charges are according to industry standard and reasonably priced. Review of Employee Costs - Determine if employee and employee overhead costs are reasonable and in line with industry standards. Review of Wexpro Cost Centers - Compare current year charges with prior years and industry averages. In addition to the above, work assignments may be added through contract amendment to permit future work on balancing accounts and the analysis of other balancing account issues that may be addressed by the Division. Such amendment and addition of tasks will be solely at the discretion of the Division and based upon the performance and expertise of the consultant. Project Tasks: It is anticipated that the project annual tasks will be as follows: In concert with Division staff, begin analysis of issues: Review key issues as set forth in the scope of work with Division staff and identify additional significant issues based on review and analysis of Company materials. Develop discovery questions to obtain information, data, and procedures used by the Company. Evaluate responses to discovery requests and follow-up, as necessary. Attend technical conferences or meetings, if necessary, as directed by Division staff. Verify the method and entries in determining that the allocation factors used in appropriating costs to: Prior Company; Prior Wexpro; Development Oil; and Development Gas wells are accurate. Compare the components of the OSF to other similar companies; to industry average; to other businesses; and the general economic climate. Determine if the accounts within the OSF are categorized properly. Determine the appropriateness of the calculations, allocations and ratios used. Prepare and submit to the Division annually, an audit report with audit findings and recommendations. Prepare a written exit report of the case, as directed by Utah Division staff.
