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by | Last updated Jun 28, 2022 | Published on Jan 26, 2022

Joint Ventures are a crucial component of oil and gas production in the United States. In the simplest form, a joint venture is an agreement between invested parties to share in both the risk (expenses) and rewards (revenues) derived from the production of hydrocarbons amongst the constituents to include private landowners, operators, investors and others. Joint ventures can be complex, and fulfillment of the terms can be tricky. Often in pursuit of scale, joint ventures may be seeking to develop large tracts of land across multiple leases and potentially across state borders.

In the Permian Basin, operators are drilling multiple vertical wellbores at different depths in a spider web of directions from a single pad site on the surface. Accurate ownership information and the need for defined allocation methods are critical, but keeping tabs on expenses, production, and revenue for the participating parties for each project can be difficult. It requires an accounting team who knows the ins and outs of finances in the oil and gas industry.  

Operators who accurately track and report costs and review reconciliations, vendors, billing, and overhead are better able to instill confidence in their joint venture partners. Plus, accurate and timely accounting practices lower the risk of failing an audit, whether it’s internally or externally driven. In addition, it is good business practice for nonoperators to understand the rights and responsibilities outlined in the Joint Operating Agreement to assess how the operators are performing and assure their investments are treated equitably.

Enter our team at PetroLedger Financial Services.  We are highly skilled at managing this process, from receiving expenses and coding them in accordance with the JOA to managing complex marketing arrangements for revenue processing and understanding the assignability of wells and owners. Our clients range from non-operators and single-well operators to thousand-well operations with an investor deck in the tens of thousands, so rest assured: we’ve seen it all.

Whether you are looking for expert monthly processing, internal review, or external joint venture audit services, PetroLedger can help you set your accounting on the right path, improving confidence and avoiding a contentious relationship between operators and non-operator investors. Want to learn more? Let’s talk.

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ABOUT THE AUTHOR

<a href="https://www.petro-ledger.com/author/jcarrollpetro-ledger-com/" target="_self">Jonathan Carroll</a>

Jonathan Carroll

Author

Marketing Manager

Jonathan comes to PetroLedger with over 12 years in marketing and sales. He has extensive experience in the corporate and non-profit sectors and is driven to develop innovative solutions to problems using data driven analysis and a sharp eye for detail.

Jonathan is excited to be a part of the PetroLedger team and looks forward to sharing the vision and services of PetroLedger with an even broader audience.

Email Jonathan: jcarroll@petro-ledger.com