COPAS model form accounting procedures provide for an annual adjustment of the fixed rate overhead for drilling and producing wells using an index published by the Department of Labor, Bureau of Labor Statistics. The BLS ceased publishing this particular index in 2003. In 2004, the COPAS Joint Interest and Audit Committees created a replacement percentage from two other BLS indexes to allow the industry to continue to have a mechanism for adjusting overhead rates.
Recent COPAS model form accounting procedures provide that charges for employee benefits will be based on the operator’s costs of providing the benefits, not to exceed the percentage most recently recommended by COPAS. The COPAS Employee Benefits Subcommittee uses a procedure based on data from the Bureau of Labor Statistics to calculate the annual rate. COPAS approves a new rate each Fall, which goes into effect January 1 of the following year.