WorldWide Drilling Resource®

Drilling Into Money Not Boring by Mark E. Battersby Surviving an Audit - Coronavirus Style The Paycheck Protection Program (PPP) was aimed at helping small businesses keep workers on the payroll and pay other bills during the pandemic. However, confusion about turning PPP loans into nonrepayable grants has resulted in the U.S. Department of the Treasury and the Small Business Administration both promising to audit all PPP loan recipients who seek loan forgiveness. PPP loans may be forgiven if the drilling business meets certain criteria, chiefly spending at least 60% of the loan amount on payroll and no more than 25% on rent, mortgage interest, and utilities. Sweetening the pot, the Coronavirus Aid, Relief and Economic Security (CARES) Act allowed any amount forgiven to be ignored for federal tax pur- poses. PPP loan recipients were required to certify that “current economic uncertainty makes the loan request necessary to sup- port the ongoing operations of the Applicant.” What’s more, any drilling operation seeking loan forgiveness was also required to certify they “used the forgiveness amount of keep employees and make eligible mortgage interest, rent, and utility payments.” All certifications found to be inaccurate or untrue are punishable under criminal and civil law. Thus, many drilling contractors, business owners, and managers are concerned they will be on the hook if they fail to meet all of the conditions. A drilling busi- ness that fails a PPP audit jeopardizes all or part of their loan forgiveness and, potentially, faces the prospect of False Claim Act prosecution by the U.S. Department of Justice. But, how can any drilling business certify to an uncertainty, and what made the funds necessary? In the face of the threat posed by all of these potential audits and reviews, surviving a PPP audit, indeed any audit, obviously requires good records. However, little guidance on the loan forgiveness calculations or application process has been provided thus far. In the absence of clear, final guidelines, borrowers should prepare now and maintain meticulous records of how the drilling operation or business used the loan funds. The PPP was intended to ensure all businesses had access to sufficient resources to keep workers employed while the drilling operation weathered the coronavirus pandemic. Beginning early, maintaining accurate documentation, assessing risks, considering the assessment criteria, and preparing for a likely audit from any of a variety of sources can help every drilling business withstand the added scrutiny. The advice and assistance of a qualified professional is also an invaluable tool. Mark Mark E. Battersby may be contacted via e-mail to michele@worldwidedrillingresource.com 50 AUGUST 2020 drilling technology and traditional rotary drilling methods. By making the most of these technologies, the drilling crew was able to reach a final depth of about 21,000 feet, deep enough in the crust to find a temperature sufficiently high enough for heat production. That plant is expected to go online later this year. “E.ON’s goal is to supply Swedish customers with 100% renewable and recovered energy. With deep geothermal energy, we’re tapping into a new energy source that can ensure renewable produc- tion in the long term. Deep geothermal energy is resource-efficient, emission- free, noise-free, and space saving, making it one of the best solutions for urban energy systems of the future,” said Marc Hoffmann, CEO of E.ON Sweden. The city of Malmö plans to be climate- neutral by 2030. E.ON is the city’s energy partner and is supporting the movement by generating district heating from geo- thermal resources. Other E.ON partners in Malmö include the Swedish Energy Agency, Swedish Geological Survey, and the University of Uppsala. Sweden to Benefit cont’d from page 42. WorldWide Drilling Resource ®