Plant Accounting Case Study
Cardinal Midstream relies on W Energy Software to accelerate residue gas plant accounting, ensure contract and meter accuracy, and streamline tax and customer reporting.
Inspiration for Change
Rapidly Growing Operations
Founded in 2008, Cardinal Midstream has evolved through three rounds of asset acquisitions and divestitures with its Iron Horse gathering and processing system recently being acquired. The company has partnered with several large producers resulting in an increasing need to manage the rapidly growing number of contracts and meters for its gas processing operation.
Customer Reporting and Tax Complexity
With increasing customer activity, Cardinal Midstream wanted to streamline the process of documenting tax information and preparing reports. However, the legacy plant accounting solution they were considering did not offer the clear audit trails in needed for split stream and other complex tax reporting, essentially creating a black box.
Legacy Solution’s Lack of Support
Cardinal Midstream’s accounting team wanted the scale and product longevity offered by widely used, commercial accounting products. However, the legacy solution that staff were most familiar with lacked the level of customer service that was expected and required for their growing operations.
BENEFITS OF W ENERGY SOFTWARE
Ensuring Meter and Contract Accuracy
Cardinal Midstream implemented W Energy Software’s Plant Processing and Contract Management software modules to support its growing Iron Horse residue gas separation operations, which equip the midstream service provider with cloud-based accounting tools to track produced volumes and refined products. The software is helping Cardinal Midstream ensure that new contracts are correctly setup by rapidly alerting users to missing meters, incorrect formulas, and other issues, saving the company valuable time and reducing risks.
Streamlining Ethane Rejection/Recovery Processes
Another added benefit of switching to W Energy Software is how we quickly handle ethane rejection/recovery. As different producers can change elections between rejection and recovery, Cardinal Midstream needed to quickly change terms between the fixed recovery percentages which are different per product depending on whether the producer elects to reject or recover ethane. In our software, this is as easy as a one-time setup and the maintenance is uploading a monthly rate that determines whether each producer is in rejection or recovery. This saves hours of time and promotes visibility with our Calculation Trace so users can quickly see how the final products are being paid.
Increasing Margin Visibility through Reporting
As part of the project, W Energy Software built a report that shows the difference between contractual fixed terms (fixed and capped fuels and fixed recovery NGLs) and the physical allocations of those products. This allows management to identify meters and contracts where the contractual terms exceed the physical allocations so they can identify issues in the field or even renegotiate contracts, if needed.
Cutting Tax Reporting Time
W Energy Software’s Oklahoma Tax module is also used at Cardinal Midstream to streamline the preparation and sharing of required tax data with its customers. Importantly, staff gain unprecedented capabilities to audit every system calculation using the W Energy Software Calculation Trace feature that documents how tax was calculated and provides customers with professional reporting that is saving Cardinal Midstream an estimated 2 days of staff time per month.
Unmatched Customer Care
W Energy Software delivered its plant accounting solution on time and on budget. What’s more, Cardinal Midstream reports that W Energy Software has been very responsive to support requests in the year they have used the plant accounting solution and has proved to be the software partner they were looking for.