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WorkflowHydrocarbon Accounting, Joint Ventures & Land

Joint Interest Billing Review

Joint interest billing checked line by line against the JOA and the AFE, so a repeat error shows as a stripe with its page and its sum.

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Follow one stale decimal from stripe to month-end ↓
The problem

A decimal that never changed after the assignment looks normal on every bill

Each operator's statement rests on a working interest decimal, an overhead election, affiliate limits and AFE lines, all set in papers that accounting often never sees. An assignment can sit with the land team for months before it is filed. Meanwhile the bills keep coming at the old share.

Nobody reads every line by hand, so people check the total against last month and the big AFE lines. A fraction of a percent on every account hides inside the normal swing of the gross. The agreement says pay first, so the bill is paid, and the remedy is a specific written exception with the page, inside the window.

Built forJoint venture accountantsAccounting supervisorsProject accountantsInternal auditors

The Problem Today

Partners pay first, and a small billing error that repeats looks normal in each monthly total.

1,233 h
a month to read the sample's lines by hand at 30 seconds each our estimate
24
months after the bill year to take written exception published

Checked by hand today

  • Decimals
  • Overhead
  • Cost lines
  • Invoices
  • Papers arrive lateAn assignment can sit with another team for months
  • A question is not a claimAn email may not hold as written exception

The Solution

  1. Each line readEach statement, received or issued, by that agreement's own terms
  2. Repeats show as stripesMonths across, accounts down: a slip is a dot, a repeat is a stripe
  3. The page and the sumEach finding shows the passage and adds up to the claim
  4. Two people decideThe accountant confirms against the page; a supervisor signs and issues

Built-in controls

  • Agents never send, sign or pay
  • No agent holds back a payment
  • A checker opens each page before signing

What You Get

Accountants take exception with proof in hand, and a confirmed error is watched on each later statement.

  • Caught once, watched afterA confirmed error becomes a check on each statement
  • Your own bills tooA statement you issue stays held until it is right
  • A month-end that holds upGates, a sampled lot and two named people
One morning in JV accounting

A joint interest billing review that found one decimal on eight bills

An assignment cut the company's share in one non-operated venture in March. The land team filed the paper in late October, and the operator kept billing at the old decimal. Here is how the accountant and her supervisor dealt with it that morning, and what the new check found next.

demoSample data throughout: ventures, operators, partners, staff and every amount shown.

  1. 01Early morning

    Every account on the venture is 0.40% high from the March bill

    JV accountant

    Twelve months run across and fifteen charge accounts run down. A one-month slip shows as a dot, a repeat as a stripe. Here a pale band covers each account from March, and the top row names it: billed at 0.31250, should be 0.31125. One account moving would mean a wrong charge. All of them moving together means the decimal.

  2. 02Early morning

    $187,400 over 8 bills, on $149,920,000 of gross

    JV accountant

    The finding puts the statement's decimal beside the assignment's, with the claim at the company's share. Below sits the sum, bill by bill, each gap between $23,092 and $23,793. The note under it says what a billing lead will ask first: each bill covers the service month before it, and without the sample's bill-date clause this is 7 bills, $164,123.

  3. 03Morning

    Page 1 of the October statement still says 0.31250000

    JV accountant

    She opens the operator's own statement page rather than a summary of it. The decimal is highlighted beside the gross charges and the company's share due as billed. The decision buttons stay off until both pages are open, because a confirmation that rests on the agent's word alone is no confirmation.

  4. 04Morning

    Clause 2.2: bills rendered on and after the effective date

    JV accountant

    Page 4 of the assignment shows 0.125% moving to another partner and the new interests, with the company at 31.125%. The page carries a plain label that clause 2.2 is this sample's own wording, and that most assignments split by the date of operations. The paper was signed in March and filed in late October.

  5. 0508:42

    Confirmed: the page says so, and payment continues as billed

    JV accountant

    She confirms with a reason code. The dialog says what confirming does and does not do: it prepares the contest and holds back nothing. Under the agreement the company pays first and takes written exception after, so withholding is the wrong tool. Her confirmation now waits for the supervisor.

  6. 0608:43

    Signed after opening both pages and the sum, then joined to the audit item

    JV accounting supervisor

    Opening a page counts only for the person who opened it, so he opens the statement page, the assignment page and the sum himself before Sign comes on. The same error already sits on the audit team's list, so this review sends no second exception. It joins that item, counted once, with this page and this sum, and the window runs to the end of the second year.

  7. 0708:46

    The error becomes a standing check on all 38 statements

    JV accountant

    Once signed, the finding turns into check C-07: each decimal against each filed paper, by the date it takes effect. It sits beside six older checks, each with where it came from, how many bills it has read and what it has hit. The month cannot close until the new check has read every statement.

  8. 0808:47

    36 agree, and one more turns up on the company's own side

    JV accountant

    The look across 38 statements, received and issued, finds the venture already known and one more, on a statement the company sends to a partner. A check that only finds money for its owner is no check, so this one runs both ways.

  9. 09After 08:47

    Our own tie-in job billed a partner at 37.5% instead of 50%

    JV accountant

    One well sits in a tract where the partner holds 50%. Routine charges there already bill by tract, but a tie-in job used the block-wide decimal. On $1,236,000 gross over four months the partner is $154,500 short. The statement is held before it goes out, and the drafted note says plainly that this one costs the partner money.

  10. 10Afternoon

    Month-end shows 3 of 6 gates met, and names what holds it

    JV accounting supervisor

    The sign-off lists what must be true first: each finding decided, the decimal check done, signed exceptions gone out, each statement tied, the pay list signed. Ten findings are still open, and one statement does not tie to its detail file. The sampled lot names the six clean statements he must open himself before he can sign.

The joint interest billing statement, bill by bill, at 0.00125 too much

The gross moves from bill to bill, so the gap moves with it. The total is the claim the supervisor signed.

BillGrossBilled at 0.31250000Gap
March$18,621,600$5,819,250$23,277
April$18,908,800$5,909,000$23,636
May$18,473,600$5,773,000$23,092
June$19,034,400$5,948,250$23,793
July$18,657,600$5,830,500$23,322
August$18,882,400$5,900,750$23,603
September$18,586,400$5,808,250$23,233
October$18,755,200$5,861,000$23,444

demoSample data, from the working solution. 8 statements, $149,920,000 gross, $187,400 in all: $146,746 on actual charges and $40,654 on the operator's advances, which are not counted twice if the year-close settlement corrects them.

Three findings no monthly total would have shown

From the same month of statements, each with its page and its sum, each waiting for the accountant to confirm or reject.

Affiliate crew transport past its yearly limit

$629,600 billed against a $250,000 limit with no approval; $379,600 over is $118,150.50 at the company's share.

Off-site engineers billed direct

Staff the agreement keeps in overhead came back on the bill after an old audit exception: $124,200.

Drilling overhead on producing wells

Three wells on production still billed at the drilling rate for two months: $40,560.

demoSample data, from the working solution.

Around the month

Every venture's stripe, the paper chain and AFEs against their lines

The rest of the JV accounting desk's month, each screen full size on a click.

All venturesEach venture as one row across 12 months, with stripes and dots and what each found. The widest stripe is the place to start.
FindingsEleven findings with their shape, amount, state and clock: $628,217.50 on what operators billed, plus three on the company's own statements.
Decimals and the papersThe venture's papers in date order, from the agreement to the late filing, and each statement's decimal against what the papers say.
AFEs against their linesThirteen open AFEs, each with its approved amount, the agreement's overrun line and what has been billed. Two past the line wait for the AFE owner.
Affiliate limitMonth by month, the running total of affiliate crew transport passes $250,000 on the April bill. The drafted note asks for $118,150.50.
Audit trailWho did what and when, people and agents alike: the late filing, the confirmation, the signature, the joining and the look across.

demoSample data, from the working solution.

Who confirms, who signs, and what each must open first

No one checks their own work, and only the signer's own openings count.

JV accountant
Sees
The stripe, the statement page, the paper and the sum
Signs
Confirms against the page or rejects with a reason
JV accounting supervisor
Sees
The pages she opened, opened again by him, and a sampled lot at month-end
Signs
Signs or sends back, issues, and signs the month
AFE owner
Sees
Each AFE against its overrun line, and what has been billed
Signs
Decides findings about AFEs
Operator's billing contact
Sees
Only the exceptions issued on that venture
Signs
Accepts, asks, or denies with a reason
Internal auditor
Sees
Each decision, what was opened before it, and the trail
Signs
Nothing: reads and exports

What stays with people when a JIB is wrong

Seven agents read, test and draft. A named person makes each of these calls.

Holding back a paymentThe agreement says pay first. An open finding goes with a note; the payment runs as billed.
Sending an exceptionThe contest drafter writes the note with the page and the sum. A person confirms, a second signs, and only then is it issued.
Approving an AFE supplementThe AFE tracker adds the lines and watches the overrun line. The AFE owner decides.
Calling a swing an errorA change in a total is a dot or a stripe only when a rule in the agreement says the bill is wrong.
Closing the monthThe supervisor signs after the gates are met and the sampled statements are opened. The agents draw the sample and sign nothing.

What JV accountants ask about joint interest billing review

What is joint interest billing review?

Joint interest billing review checks each monthly statement a joint venture operator sends, and each one you send as operator, against the agreement and the AFEs. Here agents read each line by that venture's own terms, paint repeats as stripes, and draft the written exception with the page and the sum. An accountant confirms and a supervisor signs.

Do we hold back payment while a finding is open?

No. Most operating agreements say partners pay first and protest after, so the payment runs as billed and the finding goes with a note. What protects you is a specific written exception inside the window, which is what the review prepares.

How does it catch a working interest decimal that is wrong?

It reads each filed paper by the date it takes effect and compares the decimal on each statement. When every account on a venture is high by the same fraction, the stripe crosses the whole grid, which points to the decimal rather than a charge.

Does it check the statements we issue as operator?

Yes, both ways. A standing check reads received and issued statements alike, and a finding on your own statement holds it before it goes out, even when the correction costs a partner money.

How are AFE overruns handled on a non-operated JIB?

The AFE tracker adds the billed lines to each AFE and watches the overrun line in your agreement. An AFE past its line with no supplement on file goes to the AFE owner, who decides, and a supervisor signs.

What if the audit team already has the same item?

The finding joins it and is counted once, with the page and the sum, and no second exception goes to the operator from this review.

Hydrocarbon Accounting, Joint Ventures & Land

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