Reporting Guide – Annual Oil and Gas Extraction Survey 2018

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Reporting Guide

This guide is designed to assist you as you complete the 2018 Annual Oil and Gas Extraction Survey. If you need more information, please call the Statistics Canada Help Line at the number below.

Your answers are confidential.

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act.

Statistics Canada will use information from this survey for statistical purposes.

Help Line: 1-877-949-9492

Table of contents

A – Reporting Instructions

Please report information for the period of January to December, 2018.

Please complete all sections as applicable.

If the information requested is unknown, please provide your best estimate.

B – Definitions

The Oil and Gas Extraction (except oil sands) industry, formerly known as Conventional Oil and Gas Extraction, comprises establishments primarily engaged in the exploration for, and/or production of, petroleum or natural gas from wells in which the hydrocarbons will initially flow or can be produced using normal pumping techniques.

Oil Sands Extraction, formerly known as Non-Conventional Extraction, industry relates to operations taking place in the geographical areas of Cold Lake, Peace River and Athabasca. The industry comprises establishments primarily engaged in producing crude oil and bitumen from oil sands or from reservoirs in which the hydrocarbons are semisolids and conventional production methods are not possible.

In-situ refers to the extraction techniques of drilling wells and then injecting steam, combustion or other sources of heat into the reservoir to warm the bitumen so it can be pumped to the surface.

Mining is the extraction of and production of crude oil from oil sands or from reservoirs in which the hydrocarbons are semisolids, using open-pit mining techniques.

Upgraders convert heavy bitumen into lighter crude oil.

C – Revenue and expenses, deductions and net income

Sales: Report the sales or transfer value of produced goods before any adjustment or intersegment elimination. Please include royalties and taxes that are imposed at the time of sale. Exclude G.S.T.

Other production revenue: Report the sales of services related to the oil and gas industry such as gas processing and well operating fees.

Other non-production revenue: Include all revenue not reported in sales or other production revenue, such as foreign currency gains and losses, dividends.

Royalties and similar payments: The total expenditures reported for royalties.

Operating expenses: Please include cost of materials and supplies used in extraction, production, surface lease rentals, lifting costs and all other expenditures which are related to producing operations. Exclude any 'non-cash' charges and royalties. All general and administrative costs related to producing activities and charged to current year operations should also be included here. The total operating expenses reported should equal the sum of operating expenditures for the oil sands extraction sector (question 33) plus the sum of operating expenses for the Oil and Gas Extraction sector (questions 35 to 38).

Salaries, wages and benefits: Include the cost of salaries and wages (including bonuses and commissions, employer contributions to pension, medical, unemployment insurance plans, etc.) paid to your own workforce during the reporting period.

Other operating expenses: Include only costs associated with non-producing operations and other expense items not reported elsewhere.

Interest expense: Include interest paid on bank loans, bonds, etc.

Federal income tax: Include federal income tax pertaining to the current period and assumed to be currently due.

Provincial income tax: Include provincial income tax pertaining to the current period and assumed to be currently due. The amount reported should include the Saskatchewan Corporate Capital Tax Surcharge if applicable.

Deferred income tax: Include accrued tax obligations reflected as an expense in the income statement, but not payable in the current reporting period.

Exploration and development charged to current operations: Include exploration and development expenses charged to current operations.

Amortization and depreciation expense: The systematic charge-off to expense of costs for depreciable assets that had been initially capitalised or deferred. Write-downs of depreciable assets resulting from impairments should be included in this category. However, write-offs arising from unusual dispositions and gains/losses on sales of assets should be reported under "Write-offs and amortization of deferred charges" and "Other non-cash items" respectively.

Depletion: Include the current depletion charges for costs subject to such deduction. Write-offs resulting from the application of ceiling tests should be reported under "Write-offs and amortization of deferred charges". Gains and losses on disposal of properties should be reported under "Other non-cash items".

Write-offs and amortization of deferred charges: Adjustments may be made for non-operating items which the company ordinarily eliminates from its reported "Internal cash flow".

Other non-cash expenses and deductions: Include non-cash items not reported elsewhere such as unrealised losses on currency transactions, non-controlling shareholders' interest in earnings of consolidated subsidiaries, and the equity portion of losses of unconsolidated affiliates. This item should be reduced by such non-cash revenue items as unrealised currency gains, non-controlling shareholders' interest in losses of consolidated subsidiaries, and equity in earnings of unconsolidated affiliates.

Number of employees: Provide the number of employees associated with salary, wages and benefits costs.

D – Balance sheet

Total current assets: Includes such items as cash, marketable securities, accounts receivable, inventories, etc.

Net capital assets: Includes land not held for the purpose of re-sale, amortizable assets such as buildings, machinery and equipment, etc.

Other assets: Include all assets not reported as either current or capital assets.

Current liabilities: Includes such items as current portion of long-term debt, accounts payable, notes payable, etc.

Long term debt: Includes all debt with a maturity of greater than one year.

Other liabilities: Include all liabilities not reported as either a current liability or long-term debt.

Equity: Includes common shares, preferred shares, retained earnings and all other equity.

E - Abandonment and Reclamation Costs

Include all costs related to abandonment and remediation such as well plugging and abandonment and remediation.

F – Capital expenditures for crude oil in-situ, mining or upgraders

Note: Regarding partnerships and joint venture activities or projects, report the expenditures reflecting your company's net interest in such oil sands projects or ventures.

Oil rights acquisitions, fees and retention costs:

  • In-situ: Expenditures associated with land and lease acquisition relating to oil rights, fees and retention.
  • Mining: Expenditures associated with the purchase of land and lease from others.
    Note: for in-situ and mining please include all fees associated with using land agents.
  • Upgraders: Include expenses associated with upgrader facilities.

Machinery and equipment: Include items such as boilers, compressors, motors, pumps and any other items that may be termed manufacturing or mining equipment as opposed to a fixed installation such as a building.

Drilling and pre-mining expenditures: Drilling expenditures include core hole and delineation drilling. Include the cost of casing and other materials and equipment left in place, core analysis, logging, road building, and other directly related services. Pre-mining costs include overburden removal and other pre-production expenditures.

Capitalised overhead: Report the cost of capitalized overhead not allocated above. These overhead charges should exclude any amounts reported under Operating cost by provincial jurisdiction – Oil and Gas Extraction (except oil sands) sector and Upstream expenditures by provincial jurisdiction – Oil and Gas Extraction (except oil sands) sector.

Research and other expenditures: Include all research costs associated with oil sands extraction such as: laboratory work, consultants' fees, performance evaluations, and experimental pilot plants (including any capitalised operating costs). Other costs include items such as drainage systems, roadways, tankages, anti-pollution equipment and fixed installations not including machinery and equipment.

G – Operating expenses for crude oil in-situ, mining or upgraders

Field, well and/or plant: Include all direct operating expenses and any other expenses directly related to the mining, processing, upgrading and delivery of the product, and cost of purchased fuel and electricity.

Taxes: Include taxes to federal, provincial and municipal governments, but exclude royalties, income taxes, and taxes that are part of the list price of purchases.

Purchased fuel and electricity: Include costs for fuel and electricity for all sites.

Water handling and disposal: Include all costs pertaining to water handling and disposal.

Operating overhead: Include all remaining general and administrative expenses related to upstream operations, including any corporate allocation to this segment. (These overhead charges should exclude any reported under Capitalised overhead, question 24).

H - Operating expenses by provincial jurisdiction – Oil and Gas Extraction sector

Operating expenses: include all direct costs such as wages and salaries, materials and supplies, fuel and power, well conditioning costs, municipal taxes, other direct operating expenses, maintenance and repairs expensed and contract services. Also include the non-capitalised cost of purchased injection materials used in enhanced recovery projects.

Field, well and gathering operations for oil and gas: Include primary, secondary, and tertiary recovery and pressure maintenance facilities, gathering systems and other well site facilities, surface lease rentals, and cost of purchased fuel and electricity.

Natural gas processing plants: Include expenses associated with field processing plants as well as reprocessing activities, recycling projects, and cost of purchased fuel and electricity.

Taxes: Include taxes to federal, provincial and municipal governments, but exclude royalties, income taxes, and taxes that are part of the list price of purchases

Overhead: Include all remaining general and administrative expenses related to upstream operations, including any corporate allocation to this segment. (These overhead charges should exclude any reported under upstream expenditures by provincial jurisdiction.)

I – Upstream exploration expenditures by provincial and/or territorial jurisdiction– Oil and Gas Extraction sector (except oil sands)

Oil and gas rights acquisition and retention: Acquisition and retention costs and fees for oil and gas rights (include bonuses, legal fees and filing fees; exclude inter-company sales or transfers).

Land and leases purchased from other petroleum companies: Purchases from companies that are engaged primarily in petroleum activities.

Note: for questions 40 and 41 please include all fees associated with using land agents.

Geological and geophysical services: include all seismic, geological and geophysical expenditures. Include seismography, geological photography, digital processing, velocity surveying, stratigraphic testing, aeromagnetic surveying, core drilling and environmental impact studies. Also include such activities as bulldozing and dirt work, flying seismic crews in and out, (both company owned and contract), bottomhole contributions and other similar pre-exploration expenditures.

Exploration drilling: Drilling outside a proven area or within a proven area but to a previously untested horizon, in order to determine whether oil or gas reserves exist rather than to develop proven reserves discovered by previous drilling. Include costs of dry wells, casing and other materials and equipment abandoned in place, productive wells, including capped wells, and wells still in progress at year-end. Include, also, costs incurred in fighting blow-outs, runaways, and in replacing damaged equipment.

J – Upstream development expenditures by provincial and/or territorial jurisdiction– Oil and Gas Extraction sector (except oil sands)

Development drilling: Drilling within the proven area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive for the purpose of extracting oil or gas reserves. This will cover costs of dry wells, including casing and other materials and equipment abandoned in place; productive wells, including capped well; and wells still in progress at year end. Include, also, costs incurred in fighting blow-outs, runaways, and in replacing damaged equipment. Exclude costs associated with service wells.

Note: There should be no development expenditures until a development plan has been approved.

Proven purchased reserves: Purchases from those companies that are engaged primarily in petroleum activities.

K – Upstream production expenditures by provincial and/or territorial jurisdiction– Oil and Gas Extraction sector (except oil sands)

Enhanced recovery projects: Include only expenditures on facilities in tertiary projects involving steam injection, miscible flooding, etc. Include service wells, both tangible and intangible, include the costs of drilling and equipping injection wells and the cost of capitalized injection fuel (miscible fluid). Exclude non-recoverable injection fluids charged to current operations.

Natural gas processing plants: Report only the capitalized amounts of the plants, including structures, measuring, regulating and related equipment.

Production facilities: Include tangible well and lease equipment comprising casing, tubing, wellheads, pumps, flowlines, separators, treaters, dehydrators. Include gathering pipelines, lease and centralized tank batteries and associated facilities prior to delivery to trunk pipelines terminals, and other production facilities. Include, also, costs associated with intangibles such as pre-production studies costs, and those expenditures that you consider to be pre-development.

Non-production facilities: Include automotive, airplane, communication, office and miscellaneous equipment not otherwise provided.

Drilling rigs and supply boats: Report expenditures including progress payments for the purchase of new and imported used and new drilling rigs (on and offshore) and supply boats.

L – Upstream overhead expenditures by provincial jurisdiction and/or territorial jurisdiction – Oil and Gas Extraction sector

Allocate capitalised upstream overhead to the categories indicated. These overhead charges should exclude any reported under Operating cost by provincial jurisdiction – Oil and Gas Extraction sector.

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