Overview

Presidio had a goal of becoming the most efficient, cost effective oil & gas company in the US. When the engagement began, the company only had 10 full-time office employees, including a Vice President of Finance and Accounting, but no staff accountants. Because it actively participated in the dynamic acquisitions market, Presidio had several different financial reporting needs but lacked the bandwidth to effectively address them. Those needs were the focal point for the engagement with Embark, along with overall operational and cost efficiencies.

The big wins

Client challenges

From June 2018 to June 2019, the amount of wells Presidio had to account for grew by a factor of ten. Before its expansion, the Company utilized Embark as its outsourced financial reporting & advisory provider. However, due to the size of the Company after its second acquisition, Presidio's management team wanted to bring the financial reporting in-house to solidify the company's financial reporting core while also creating efficiencies, systems, and processes that would support its growth strategy. Presidio decided to engage Embark's consultants to help it transition from outsourced finance and reporting to in-house finance and reporting, developing a set of objectives to address through Embark's engagement, including:

• Assistance with monthly revenue reporting and closing procedures, as well as financial reporting. This included the creation of the company’s revenue templates, oil and gas-specific monthly entries including asset retirement obligation (“ARO”) and depletion, creation of the financial reporting package for debt holding banks and private equity investors, as well as preparing the purchase price allocation advisory journal entries and related technical memo.
• Set up systems and procedures for acquisition reporting compliance, including performing end user testing on behalf of the system implementation team in charge of the digital transition of data into Presidio’s ERP system, Enertia.
• Create the processes needed for ongoing operations. Embark was able to assimilate with the company, in order to work with not only the whole financial team, but with engineering, the efficiency group, and executive management, to effectively ascertain the simplest and most practical way to complete the job. Presidio continues to use the tools and processes set up today.
• Help train and ramp-up new hires within the finance group. In the early stages, Embark team members acted as managers over the newly hired revenue team, delegating work and reviewing day to day operations.

How Embark helped

Thanks to Embark’s deep experience in oil & gas, we were able to hit the ground running and immediately begin working toward management’s goals, first through our outsource team, then with a full engagement team. From training new hires to addressing the intricacies of acquisition reporting compliance, Embark’s team helped establish the solid financial reporting foundation the company needed to support its growth strategy.

• Assembled and led revenue and financial reporting assistance teams

• Performed full gamut of Presidio’s monthly revenue and general monthly closing procedures, including entries for ARO, depletion and depreciation, mark-to-market financial reporting, and financial accruals

• Assisted the controller with assembling and reviewing Presidio’s financial reporting package

• Performed the acquisition purchase price allocation advisory and booked the related incremental adjustments during the transition from the Preliminary Settlement Statement to the Final Settlement Statement

• Worked with the system implementations team to ensure the ERP system was properly configured and fully functional

• Facilitated the process of obtaining revenue and JIB data in electronic format by communicating with purchasers and with service providers

• Trained new hires within the company’s accounting group, while also providing the accounting team with a monthly revenue and financial reporting checklists

• Supported the JIB team with monthly entries, with recurring entry set up, and lent a hand with the ad valorem tax year end processes

• Implemented entirely new processes from the ground up, including the creation of a take-in-kind revenue model

• Integrated efficiencies across the financial reporting function to free time for management so they could focus on high level analysis and future acquisitions

• Ensured that the monthly financials presented to the private equity investors and management were complete and accurate

• Setup a severance tax framework for the company, addressing the unique considerations for each of the states – Kansas, Oklahoma, and Texas – that Presidio operates wells in

• Led co-team meetings with Presidio, Embark, and the software implementation team, properly understanding and articulating the needs of all parties

Results: 

Because of Embark's initial familiarity with Presidio's financial reporting function as an outsourced client, Embark was able to build upon its templates and processes to help Presidio rapidly scale up when it made its first large, transformative acquisition. The transition was remarkably smooth, particularly given Presidio's small in-house team. In the end, Embark’s combination of industry experience and critical thinking skills helped establish a reliable footing and an accurate reporting model that management can depend on for future decision-making.