Governance & standards

Numbers that survive an audit, a partner challenge, and a restatement.

Hydrocarbon accounting is only useful if each figure can be explained. Governance here is structural — in the data model, the units and the close process — not a reporting layer added at the end.

What holds the number up

Seven controls behind every balance.

Measurement standards

An oil & gas measurement standards reference pack sits behind the calculations, so conversions and corrections follow recognised practice rather than local convention.

Unit governance

Every quantity is stored as the value that was actually measured plus a normalised canonical value. Reporting can move between volume, mass, rate, temperature, pressure, energy and level without losing the original reading.

Allocation lineage

Each allocated volume keeps a link to the readings, rules and run version behind it. A number can be explained months later without reconstruction.

Versioning & close

Allocation runs are versioned and periods are closed under control, so a restatement is a deliberate, recorded act rather than a silent overwrite.

Audit history

Record-level history captures what changed, when and by whom, across operational and commercial data alike.

Access separation

Workspace separation is enforced in the database, with facility-level access and operational roles narrowing what each user can see and do.

Specification conformance

Product specifications and lab results are checked against the applicable spec, and conformance travels with the volume to the next hand-over.

Operating principles

How we decide what the platform should do.

01
Measured before modelled
A recorded measurement is never replaced by an estimate without the estimate being labelled as one.
02
Explainable by default
If a figure cannot be traced back through the platform, it should not be in a statement.
03
Configured, not forked
Differences between facilities are handled as configuration, so governance stays identical across the estate.

Accounting & Governance Walkthrough

Hydrocarbon & Energy Accounting in Operation

Watch how HCF360 enforces four-tier allocation cascades, uncertainty-based reconciliation, and strict period close governance.

LIVE DEMO · Hydrocarbon & Energy Accounting Core

ISO 5168 / VDI 20483:46

Watch live demonstration (3:46)

Governance & Accounting

What is demonstrated in this recording

The four-tier allocation cascade, uncertainty-based allocation (ISO 5168 / VDI 2048), versioned period close, and irreversible audit lineage.

Four-tier allocation cascade from custody ceiling down to division orders
Closed-form weighted least-squares allocation protecting accurate meters
Monte Carlo equity risk modeling for disputed partner splits
Period close enforcement where restatements are recorded, never overwritten

Video ID: Kni6xQB_OXEWatch on YouTube

The allocation engine

Four tiers, one traceable cascade.

Every barrel and every MMBtu travels the same path from the fiscal meter down to the interest holder. Each step is versioned, explainable and re-runnable.

Tier 1
Custody transfer ceiling
LACT · Coriolis · ultrasonic gas · central delivery point
The fiscal meter at the central delivery point sets the total that every downstream figure must reconcile to. Nothing below this tier may sum to more than what left the facility.
Mass and energy conservation is enforced before allocation begins: ∑ allocated = measured custody volume, with no residual absorbed silently.
Tier 2
Well allocation
Model A pro-rata · Model B uncertainty-based
The custody volume is back-allocated across the wells on the pad or battery, using either proportional theoretical estimates or uncertainty-weighted least squares.
Well estimates come from the latest valid well test, decline model or choke correlation — each labelled with its source and confidence.
Tier 3
Lateral multi-tract allocation
Perforated length · frac stages · clusters · agreed acreage
Each horizontal well's allocated volume is split across the mineral tracts, spacing units or concession blocks its lateral crosses.
Weights are configured per well and versioned, so a revised directional survey or perforation record re-runs the split with a full audit trail.
Tier 4
Contractual equity cascade
Working interest · ORRI · lessor royalty · net profits interest
Tract volume is distributed across the division order to every interest holder, with strict closure and no rounding drift.
∑ shares = 1.000000 is enforced per tract per production day; a division order that does not close is refused rather than balanced by force.

Allocation models

Four models for the same governed balance.

Choose the model the agreement and the metering justify — the lineage, the closure rules and the audit trail are identical across all four.

Model A

Pro-rata volumetric & energy

Each well receives a share of the measured facility volume in proportion to its theoretical estimate. Simple, fast and defensible where meter quality is uniform across the wells.

Pro-Rata Volumetric & Energy Allocation ProtocolAPI MPMS Ch. 20.1 · COPAS Guidelines

Proportional back-allocation distributing total measured facility volume across wells based on theoretical estimates and fluid quality. Applied separately per phase and on an energy basis for gas.

Strict volume conservation: ∑ allocated volume = measured facility total.

Unconventional & horizontal wells

A lateral that crosses four leases is still one governed volume.

Shale and tight-rock development breaks the assumptions conventional allocation was built on: laterals span multiple ownerships, decline is hyperbolic for years, and pads commingle dozens of wells behind periodic tests.

Multi-tract horizontal wells

A lateral crossing two to five leases, spacing units or concession blocks is modelled once, with per-tract weights versioned against the survey and completion records behind them.

Modified Arps decline

Hyperbolic transient flow with b-factors above 1.0, switching at an exact computed day into terminal exponential decline — fitted against well-test history with observation counts and RMSE.

Pad-level commingling

Dozens of wells sharing pad separators and test headers are allocated from periodic well tests, with each estimate carrying the age and validity of the test behind it.

Flowback segregation

Frac load water recovery is tracked in its own ledger, so completion cleanup never distorts water cut, formation-water disposal or the hydrocarbon back-allocation.

Dynamic GOR and water cut

Gas-oil ratio break-out and water-cut drawdown evolve from the well-test history rather than being held as static ratios.

Date-effective topology

Pads, wells, tracts and interests change over time; every allocation run uses the network as it stood on that production day, to the minute.

The lateral split

Tract weights you can defend with a survey.

Before royalty and division orders are applied, the allocated well volume is sub-allocated across the tracts the lateral intersects.

Normalized Survey & Completion Interval AllocationCOPAS MFI-51 · State Pooling Rules

Sub-allocates horizontal wellhead production across intersected lease tracts and concession boundaries with exact unit closure.

Strict closure: ∑ tract shares = 1.000000 enforced per production day.

Perforated lateral length: Engineered Contact Interval Weighting; Taken from directional survey MWD data and casing perforation records, isolating perforated contact from gross lateral length.
Completed frac stages: Engineered Completion Stage Allocation; Reflects engineered completions where stage spacing differs across the tract boundary.
Cluster count: Perforation Cluster Density Split; A finer grain than stage count where cluster density varies along the lateral.
Agreed acreage or PSA share: Unitization & Concession Share Weighting; Tract weights fixed by pooling orders, unitisation agreements or production sharing terms.

Rate estimation

Modified Arps, with an exact terminal switch.

On days between valid well tests, the theoretical rate comes from a decline model fitted to that well's own history — hyperbolic through the transient, exponential once decline reaches its terminal floor.

Hyperbolic Transient Flow RegimeArps Decline Curve Analysis

Models transient, fracture-dominated linear and bilinear flow with empirical b-factors fitted against historical well tests.

Transient flow modeling with b-factor > 1.0 fitted against observation history.

Exact Terminal Decline Transition Day (t*)SPEE Monograph 3 Parameterization

Analytical day index where nominal decline rate intersects the terminal economic floor, preventing hyperbolic reserve over-projection.

Calculates exact calendar day nominal decline rate reaches terminal threshold d_term.

Terminal Exponential Boundary FloorSPE Reserves Auditing Standard

Stable late-life boundary decline ensuring reservoir reserves and long-term delivery contracts remain conservative and audit-defensible.

Guarantees late-life production models do not exceed physically sustainable drainage limits.

Every parameter — q_i, D_i, b and d_term — is versioned alongside the well-test observation count, RMSE and fit confidence, so an estimate can be challenged on its evidence rather than its result.

What the engine refuses

Governance is what makes the number defensible.

Measured beats estimated

Estimates reconcile to measurements. An estimate is never added on top of a custody figure.

Loud refusals over invented splits

Where evidence is missing, the run stops with a named refusal code instead of fabricating an even split.

Day-lock immutability

A closed day stays closed. Late evidence becomes a tracked adjustment in the next open period, with the original preserved.

Studies stay out of the ledger

Uncertainty studies and scenario runs are structurally isolated from the operational general ledger.

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