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by | Last updated Jun 28, 2022 | Published on Feb 2, 2022

As the oil and gas industry evolves and becomes a more competitive, more expensive ecosystem, knowing exactly where your money is going in a joint operating agreement has become crucial. If you have any concerns that your capital may be misallocated by an operator within this agreement, it might be time to consider conducting a joint interest audit (JIA).

Taking the steps to verify where your money is being spent and whether it is being spent appropriately within joint operating agreements (JOA) is well worth your while: coding errors with budget spending, such as cost overcharges, or with licenses often occur, and these issues can result in significant losses if they’re not thoroughly investigated. If you are a non-operator, conducting a joint interest audit will allow for you to verify costs charged to you, and any errors will be identified and resolved. This could result in you potentially recovering hundreds of thousands, if not millions of dollars.

It may sound like conducting a joint interest audit is the obvious step forward to keeping your assets organized and having a deeper understanding of where your money is going. However, such a thorough investigation does not come cheap; there are a few common reasons why businesses do not choose to run a JIA.

One reason why businesses do not choose to perform a JIA is because of the audit’s projected cost. JIAs require a lot of capital to conduct, and the cost might seem daunting or not worth the time investment on first glance. However, recovered assets usually are worth far beyond the cost of the audit itself. If you have any suspicion of coding errors or bills inappropriately charged to you within the agreement, running a JIA is money well-spent for the money you’ll receive in return.

Running an audit is also exceedingly difficult without a dedicated joint interest accounting team— which performs an entirely different function than a financial accounting team— that can navigate through COPAS standards and regulations, in addition to the dozens of agreements that lay the groundwork for joint ventures. This is where our back office at PetroLedger can come in. We have over 30 years of experience conducting JIAs on the behalf of many clients, and our JIB team is well-equipped to tackle even the most intricate JOAs.

If you are concerned that your money may not be allocated correctly or that you may be missing out on thousands or potentially millions of dollars, PetroLedger can perform a joint interest audit on your behalf and help set your money back on the right path. Interested in conducting a JIA? Contact our team today!

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ABOUT THE AUTHOR

<a href="https://www.petro-ledger.com/author/lrabalaispetro-ledger-com/" target="_self">Lauren Rabalais</a>

Lauren Rabalais

Author

Creative Marketing Associate

Lauren, one of our youngest team members, comes to PetroLedger shortly after obtaining her Digital Media Innovation degree from Texas State University. Armed with knowledge of digital and social media trends, Lauren brings a fresh perspective to PetroLedger’s online identity and ensures that our company reaches new clients.

Email Lauren: lrabalais@petro-ledger.com