A run ticket is the legal document of record for crude oil sales at the lease level. It captures the measured volume of oil transferred from a lease storage tank to a pipeline or truck, along with quality parameters that determine the net saleable volume and price adjustments. Every barrel of crude oil sold in the United States passes through the run ticket process, making it the single most important document in lease-level production accounting. Inaccurate run tickets directly impact operator revenue, royalty payments, and tax reporting.
How It Works
A run ticket is created each time oil is transferred from lease tanks, following a standardized measurement process governed by API (American Petroleum Institute) standards:
- Opening Gauge — The tank level is measured before transfer begins, either manually with a steel tape and bob (API MPMS Chapter 3) or automatically via radar/float-type tank level sensors. The gauge reading is converted to barrels using the tank's calibration table (strapping chart).
- Closing Gauge — After the transfer is complete, the tank is gauged again. The difference between opening and closing gauge, adjusted for any on-hand oil in the bottom, represents the gross volume transferred.
- Temperature Correction — Oil volume changes with temperature. The observed temperature is recorded and a volume correction factor (VCF) is applied per API Table 6A/6B to convert to the standard reference temperature of 60 degrees Fahrenheit.
- Gravity (API) — The API gravity of the oil is measured with a hydrometer or densitometer. Gravity affects pricing — light sweet crude (38 to 42 API) commands premium prices, while heavy crude (below 22 API) trades at a discount.
- BSW (Basic Sediment & Water) — A sample is centrifuged to determine the percentage of non-hydrocarbon content. The BSW percentage is deducted from gross volume to calculate net volume. Pipeline specifications typically require BSW below 1%.
- Net Volume — The final saleable volume after temperature correction and BSW deduction. This is the volume used for payment and royalty calculations.
Both the operator's representative (pumper or lease operator) and the purchaser's representative (truck driver or pipeline gauger) sign the run ticket, establishing an agreed chain of custody.
Why It Matters
Run tickets are the foundation of crude oil revenue accounting. A single Permian Basin lease may generate 20 to 40 run tickets per month, each representing $5,000 to $50,000 in oil value. Errors in gauging, temperature correction, or BSW measurement compound across hundreds of leases and millions of dollars in revenue. Disputes over run ticket accuracy are among the most common commercial conflicts between operators and purchasers. Proper documentation also satisfies state regulatory requirements and supports royalty owner audits.
How Netora Handles Run Tickets
Netora E&P Production digitizes the run ticket process, capturing opening/closing gauges, temperature, gravity, BSW, and net volumes directly from the field. Each ticket is linked to the lease, tank, and purchaser for complete traceability. The platform automatically reconciles run ticket volumes against tank inventory and production allocation data, flagging discrepancies for review before they become revenue leakage. Learn more about Netora E&P Production.