Lease Operations 301: Defense Against Reject Tickets

If you have been operating for any length of time calling in loads for your oil, you are likely to have come across a reject ticket citing low oil, high BS&W, or a generalized safety concern. A common mistake that many operators make is always assuming the driver had no choice but to issue a reject ticket. It is not only is it your job to guarantee that driver 192.5bbl of clean product every time you call in a load, but it is also your job to validate for yourself that the driver had no choice but to issue a reject ticket for the reason cited on the ticket. Reject tickets are not cheap. If you start collecting reject tickets unchecked, you will start incentivizing truck drivers to become more creative and prolific with their rejections, which could cost your company up to four or five figures of penalties from your hauler.

Why are disputable reject tickets left? Sometimes truck drivers check the wrong tank. Sometimes they do not gauge the tank with a gauge line, relying on the sun or a flashlight to guess levels. Sometimes drivers leave rejects without checking anything especially during the holidays, after giving a two-weeks notice, or when distracted with work related or personal stress. Sometimes you will get two reject tickets because the second truck driver took the word of the first driver whether or not the first driver was right. However, none of these possibilities can be used to dispute a reject ticket formally. This is why I have included the next section before we talk the specific techniques you should use to defend against reject tickets.

Ground Rules

When you receive any reject ticket, keep in mind these rules:

1. Always investigate every reject ticket. If thirty minutes of your time reverses a reject ticket, it is a huge profit for the company.
2. Focus on and present only the facts. Avoid addressing your feelings and assumptions. Imagine you received a reject ticket for low oil. Do not say, "Driver did not use a gauge line to determine levels. He probably shined a flashlight in there and made a bad call." This changes the discussion from whether you had enough product or not to whether the driver did his job correctly with no proof. You will lose that argument every time. Do not say, "I feel like the driver could have done a better job in checking these tanks." Again, you will turn the conversation towards the work ethic of the truck driver and the effectiveness of his trainer, which is an argument you will never win. Later in this article we will talk about specific examples of successful verbiage.
3. Do not give unnecessary information. When you are formally disputing a reject tickets, list all reasons why you are disputing the tickets, but do not add any extra information that can overcomplicate or make your position harder to defend. A good rule of thumb is to use the fewest amount of words if an engineer asked you, "How could this reject ticket have been avoided if you were the truck driver?" If you have had to answer to an office-only engineer before, hopefully you know your answers must be tailored to not encourage additional questions that will likely be irrelevant.
4. Your hauling companies care about their drivers' wellbeing and safety first, and so should you, always. When the reject ticket is especially egregious and plainly wrong, take responsibility first, list what measures you have in place like: your directions in your load request, tank markings, signage, etc, then ask how you can help or change anything to prevent more false reject tickets in the future. Be genuine, frank, and eager to pitch in. If you are on top of your game, there is nothing else the hauler can say that you could have done, but this takes any objections about your attitude and your work ethic off the table. Additionally this builds a common goal between you and the hauler's management to absolve this reject to reciprocate your initiative and willingness to prevent future rejects for this reason.
5. If your argument involves pulling from other tanks, the other tanks must be reasonably accessible at the same stop. The driver must be expected to do no more than a minor parking adjustment to reach said other tanks. If the driver has to drive more than 1/4 mile and/or leave location via a lease road to reach another location for another tank, it does not count as a reasonable adjustment. If you have two or more distinguishable sets of tanks within these parameters, they are fair game.

How to Dispute High BS&W Rejections

When you have a reject for high BS&W, the only disputes that will work is that the tank(s) had clean product in it or you did not order the load. Perform the following investigation thoroughly. Even if you find a reason to dispute the load, keep going as you may have more reasons to bolster your defense.

1. Is the lease name and well number correct on this ticket? If you receive a reject ticket for a well that is not even located on the location it was dropped off at, for no reason should you accept that reject. Even if that ticket was printed at the correct location but the driver forgot to leave it at the mailbox and left it at another location, you still have grounds to dispute it: "Reject ticket #####1 citing high BS&W is in dispute because it was issued at [insert battery name here], which not the intended tanks/location for this ordered load."

1. Did you in fact order this load? If it is not on auto-haul and you did not request for this tank to be pulled: "Reject #####1 citing high BS&W is in dispute because this load was not ordered."
2. Does the driver's seal on/seal off numbers match the correct tank? If not: "Reject #####1 citing high BS&W is in dispute because seal numbers do not match the tank called in."
3. Is there successful run ticket after the reject ticket? If so, that ticket verifies that the contents in that tank were clean before anyone else touched it. "Reject ticket #####1 citing high BS&W is in dispute because run ticket #####2 verifies clean product in production tank."
4. Do you have enough clean oil in two or fewer other isolated tanks or a multitude of equalized tanks from another manifold on location to satisfy 192.5bbl of clean product? If so: "Reject #####1 citing high BS&W is in dispute because there was enough clean product available in adjacent tanks to satisfy a full 192.5bbl load." If you experience pushback for not ordering from these other tanks, respond in kind with, "If there is not enough clean product in the tank to satisfy a load, it is my mission to make sure the driver is able to leave location with a load from the same location if possible. I have # tanks at this location so if the first tank does not work, surely there may be another load available in another tank. All it takes is two minutes with a gauge line with water detection paste to check it. If a driver is having difficulty understanding the tank battery, make me your first call, always."

1. Use a thief barrel with an 8" sample port and your crude oil heater and centrifuge to collect, fill up two vials, heat the samples to at least 140°F and then spin them in your centrifuge for 5 minutes. Follow the directions that came with your vials to correctly interpret your spinouts. If you do not have any of this equipment, call your chemical company representative to do this for your while placing an order for your ported thief barrel and portable crude heater, vials, and centrifuge kit from your local parts store. The image provided is the expensive truck mounted/benchtop model. Ask for the hand-portable model instead. If your sample is below the industry standard of 1% BS&W, you have a valid case to dispute your reject ticket. Take a photo of the vials and word your email like so: "Reject ticket #####1 is in dispute because two samples were collected at ##:## from the bottom of the tank, heated to 140°F, and spun for 5 minutes verifying <1% BS&W. Included is a photograph of both vials with the lease sign in the background. No other truck driver has touched this tank nor were any intervention methods performed before collecting this sample."

How to Dispute Low Volume Rejections

When you have a reject for low volume, the only disputes that will work is that the tank(s) had enough product in it or you did not order the load. Perform the following investigation thoroughly. Even if you find a reason to dispute the load, keep going as you may have more reasons to bolster your defense. Some of these steps are the same or similar to the ones listed above in the BS&W section. This is done on purpose in case you want to return to this article for a quick reference.

1. Is the lease name and well number correct on this ticket? If you receive a reject ticket for a well that is not even located on the location it was dropped off at, for no reason should you accept that reject. Even if that ticket was printed at the correct location but the driver forgot to leave it at the mailbox and left it at another location, you still have grounds to dispute it: "Reject ticket #####1 citing low volume is in dispute because it was issued at [insert battery name here], which not the intended tanks/location for this ordered load."
2. Did you in fact order this load or did dispatch double book one of your requested loads? For example, if you are told today to expect only one load tonight and you order two additional loads for tomorrow morning but receive tickets for four attempted loads when you gauge off tomorrow, that is grounds for a dispute if one of them is a low volume reject. If it is not on auto-haul and you determine that dispatched overbooked this lease: "Reject ticket #####1 citing low volume is in dispute because this load was not ordered."

1. Was there in fact enough oil to provide a valid load? There are two easy, provable ways to determine whether there was enough oil for a load. First, take the start time of the ticket, add 45 minutes to it, and trend your tank on SCADA. If there was enough oil for a load or another truck had started loading, you have grounds for a dispute. Secondly, take the start time on the ticket and your gauge off time and convert them into a 24 hour decimal expression. For example, 09:30AM = 09:30 = "9.5", 1:15PM = 13:15 = "13.25", etc. Take your tank gauge and calculate how many bbl are above the manifold allowance. Now, find your hourly production rate by taking your 24hr average oil production rate and divide it by 24. To find the elapsed hours between gauge off and the ticket, take your gauge off time value, subtract 45min (.75) to account for the amount of time to load a truck, add 24hours (24.0) if the ticket was issued earlier than 23:15 yesterday, and subtract the time value of the ticket. Multiply the elapsed hours value by your hourly production rate to find your elapsed production value. Subtract your elapsed production value from the calculated bbl above the manifold. If you don't like word problems, I've included an example with a ticket charged at 11:00PM last night, you gauged off at 9:30 this morning, you had 15'6" in one 20'x400bbl tank, and your well makes 256bbl/d below in equation form. If your answer is above 170bb or the amount that your hauler has indicated is the smallest allowable valid load, you have grounds for a dispute. Be prepared to show your work and to remind them of the acceptable volume range that constitutes a valid load that has been communicated to you: "Reject ticket #####1 is in dispute because there was enough oil to satisfy a valid load."

1. Does the driver's seal on/seal off numbers match the correct tank? If not: "Reject #####1 citing low volume is in dispute because seal numbers do not match the tank called in."
2. Did your oil volumes calculate about 190bbls high for one well and 190bbl short on your rejected well on a multi-well pad? If so, check the other tickets for an on seal that matches the reject ticket's off seal. If this evidence is provided: "Reject ticket #####1 for Well #1 citing low volume is in dispute because run ticket #####2 for Well #2 was pulled from Well #2's production tank according to the on/off seals." If one or both drivers did not provide seals: "Reject ticket #####1 for Well #1 citing low volume is in dispute because ticket #####2, #####3, #####4 or #####5 was incorrectly pulled from Well #2's production tank, causing the low volume. Driver did not include on/off seals to narrow down which ticket was pulled from the wrong source." If you are able to trend your SCADA back with enough resolution to see each tank pull, you can narrow it down that way but you need to provide a screen shot of the graph in your dispute to prove your work.
3. Do you have enough clean oil in two or fewer other isolated tanks or a multitude of equalized tanks from another manifold on location to satisfy 192.5bbl of clean product? If so: "Reject ticket #####1 citing low volume is in dispute because there was enough clean product available in adjacent tanks to satisfy a full 192.5bbl load." If you experience pushback for not ordering from these other tanks, respond in kind with, "If there is not enough clean product in the tank to satisfy a load, it is my mission to make sure the driver is able to leave location with a load from the same location if possible. I have # tanks at this location, so if the first tank does not work, surely there may be enough additional product in another tank. All it takes is two minutes with a gauge line to check for it. If a driver is having difficulty understanding the tank battery, make me your first call, always."
4. Is the tank information accurate on the ticket? Some haulers will print the tank heights, volumes, multiplied by x amounts of equalized tanks directly to the tickets that the driver used to calculate if his gauge equals a valid load. If your hauler does this and any of that information is undersized: "Reject ticket #####1 is in dispute because the dimensional metrics used to calculate available product was undersized."

Safety Concerns

Disputing safety related rejects is not trivial as every safety question and concern should be encouraged for the sake of the driver's health and life, regardless of how trivial it may seem to us. However, not every safety related reject ticket should be merited with a penalty against your company.

How do you dispute a "Location Inaccessible" reject? There are a number of possible reasons a location may be considered inaccessible to a driver: mud, obstacles, poor design, weather, etc. If other drivers have evidently visited and loaded at that location that you received the reject, you could argue that each load needs to have the same measurable chances of being pulled and though it is within the driver's right to pass on a load they feel is unsafe for them to attempt, it is not justifiable to penalize the company against the other drivers' unanimous opinion that this battery was safe enough to complete their loads in the same conditions. "Reject ticket #####1 is in dispute because at least # other drivers have successfully completed loads at this location with the same conditions. We understand that some drivers may find unfamiliar driving situations unsafe to attempt, but our location has proved to be safely accessible via the professional opinion of your other drivers. May we have this charge waived? Also, I would like to meet with one of your field supervisors at this location to discuss if there is anything I can do to ensure any subjective rejection potential is minimized."

How do you dispute a "Waiting in Line" reject? Make sure all of your vacuum truck companies understand that they are to yield and disconnect to make way for any oil haulers if needed to ensure they do not reject you for a vacuum truck being in the way. Otherwise, it is your oil hauler's dispatch's responsibility to ensure that too many drivers do not swamp one location at a time. It is only your responsibility to ensure that the location is accessible to trucks using the minimum standard driving skills required to obtain a CDL, that they have reasonable access to at least one load bucket, and that there is enough clean product. If you have enough room to install a second load bucket at higher producing locations far enough away to allow two drivers to load simultaneously, that would be wise. Some oil and gas regulatory agencies have literature that address load line placement and multiplicity requirements, so always defer to your local regulations. If your location is in compliance, there should be no reason you should be charged for a line created by the one dispatch office. "Reject ticket #####1 is in dispute because the line was created by too many drivers being simultaneously assigned to the same location from the same dispatch office. For future reference, location is only designed to accommodate # amount of drivers at a time."

How do you dispute a "Could Not Locate Correct Tank" reject? This requires proactivity on your part that I go over another article in my Lease Operations series, Lease Operations 201: Crushing The Quarterly Inventory Rush under the subtitle "General Housekeeping Rules", if you want to go check it out here: https://www.dhirubhai.net/pulse/lease-operations-201-logistics-etiquette-tyler-w-matthews/ . If your tanks are well labeled and you are meticulous in your loads requests, you can word it like so: "Reject ticket #####1 is in dispute because the tanks have clean, fresh, legible, painted numbers that correspond to the load request I submitted yesterday which also includes accurate coordinates to location, tank battery name which is also displayed on lease signs, and well name which is both painted on the tanks and printed on the lease signs."

Your Take Away

As you can tell, this was more than a bag of tricks to wriggle out of reject tickets and not all possible types of reject tickets were addressed. This article was designed to adjust your perspective and verbal pallet so you may successfully defend every load you call in that is challenged honestly so your supervisors can give you backup if needed. It takes a lot of extra work to challenge rejects with objectivity and honesty, but it takes a lot of extra money to be negligent. You have the responsibility to stand by your word, to defend your sales, and make as much money for the company as possible. The Matthew Principal of Accumulated Effect, located in The New Testament in the Book of Matthew 25:29, verified by the secular Pareto Distribution, observes the following truth:

For to every one who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away.

This holds true even for operators who investigate all or none of their reject tickets. If you do not do your part to verify the validity of all reject tickets, you will invite more false rejects to be issued over time. If you do investigate your reject tickets while disputing the invalid ones, you will eventually discourage almost all invalid reject tickets. The trick is merely doing it in a tactful, polite manner. Good luck and happy sales.