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. 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? Give us a call!
The journey from old to new oil and gas software can be an arduous one. On top of the complications that can arise during the data conversion process, many companies come to realize post-conversion that their new software may not be as good of a fit as they believed. But data conversions are costly, time-consuming projects; you really want to get these right the first time. With over 25 years of experience migrating client data, we’ll be there to help you make the decision that’s best for your business, whether your data comes from industry-standard applications, QuickBooks, legacy software, or any other unsupported systems. Our scoping process is thorough, and we’ll recommend the application we think is the best for you after some conversation about your needs. But before you decide to pull the trigger on a data conversion, here are three important questions your company should consider.
Nothing is scarier during Halloween season than knowing your 1099 filing deadlines are creeping closer. We know how much of an enormous headache the 1099 filing process is— that’s why it’s one of our most-requested services we offer to our clients. But there’s no need to stress this year: here is how outsourcing your 1099 processing can help you relax this season.
An inaccurate division order can spell a lot of trouble for all parties involved. Mispayments are not always detected expeditiously, and they can often create practical and legal challenges if they are not resolved quickly. However, the unfortunate reality for operators is that, without thorough oversight, inaccuracies are inevitable, especially when you factor in varying division order laws from state to state. These mispayments are usually caused by simple human error: miscalculations, typos, system errors, ownership analysis errors, and so on.
Our vision at PetroLedger is to be the partner of choice within the oil and gas industry for outsourced accounting and transaction services by employing the best-in-class people and processes across multiple technology platforms. Our most experienced and versatile staff resides in our Professional Services department. If you ask any of our staff, they will say it’s very rewarding to see the before and after version of their books. The PetroLedger team is a set of superheroes that transform and correct your data to better serve your organization.