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Permian Producer Recovers $650,000 Related to Incorrect Processing Fees
Contract Compliance • Incorrect Fee Allocation

Situation

A Permian Basin producer engaged AEGIS to provide marketing and commercial services for a complex set of assets. AEGIS quickly discovered an error in the settlement statements the producer was receiving related to processing fees.

Solution

AEGIS identified that processing fees of $0.85/MMBtu were being assessed on gross wellhead volumes. Contractually, these fees were to be assessed on net plant inlet (also known as gross wellhead less field fuel).

Outcome

AEGIS notified the customer and contacted the operator responsible for the settlement statement. AEGIS provided the data it found to the operator and performed a full reconciliation of the impact on realized prices. The operator acknowledged the error and remitted $650,000 to the customer as a make whole payment. While the make whole payment was meaningful, the impact on future flows was much greater and resulted in significantly increased equity value of the well.

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