The Oil and Gas Consulting Company

Accounting and Outsourcing

What are Joint Interest Billings?

A Joint Interest Billing (JIB) is the mechanism to bill the costs of an oil and gas joint venture to the Non-Operator(s) at their proportionate share(s). In doing so, an Operator must properly account for expenditures for each property on a gross level and determine which costs are chargeable to the Non-Operator(s) under the joint operating agreement (or other governing agreement) and associated accounting procedure, then distribute those costs through a joint interest billing to the non-operators at their proper working interests.

Joint interest accounting involves many departments and functions within a company: land, accounting, division order, marketing, and sometimes legal, with expertise needed in each area to ensure the JIB bills the proper contractual amount to each non-operator.

Many companies are short-staffed or want to focus on core functions. Let Martindale handle and manage your daily and monthly JIB process, from inputting invoices to creating and issuing the JIBs.

Revenue accounting is arguably more complex than joint venture accounting.  Complexity is the standard given considerations such as multiple owners, varying laws and taxes by jurisdiction, gas imbalances, multiple regulatory agencies, crude oil gravity banks, varying royalty rates, multiple operators, purchasers, and transporters, and the routine problems and issues with different gravities and temperatures (oil) and pressure bases (gas).  This requires a specific expertise to ensure that proper volumes and/or revenues are remitted to each party, taxes are calculated and paid properly, with appropriate allowed deductions taken, royalties are paid according to the underlying lease agreement(s), and proper regulatory filings are made.

Whether you are a non-operating working interest owner, an operator, private equity, engineering, or geology-focused investor, or individual royalty owner, we tailor our services to your exact needs; there is no one-size-fits-all boilerplate. Below are examples of how we can help.

Non-operated property services

  • Pay, track, and maintain monthly JIB records
  • Receive and deposit monthly revenues or royalties
  • Prepare monthly Lease Operating Statements / profit and loss analysis
  • Monthly expenses, revenues, and volumes analysis and verification
  • Digital record keeping and agreement retention
  • Royalty, net revenue, and working interests review and comparisons to governing agreements
  • Customized monthly and quarterly reporting
  • Authorization for Expenditure (AFE) tracking and review
  • Bank reconciliations and cash management
  • Access to accounting system records anywhere and anytime

Operated-property services

  • Accounts payable workflow, coding, and invoice processing
  • Vendor and owner info and W-9 maintenance and 1099 issuance
  • Accounts receivable monitoring and collections
  • Address non-operator and owner-relation inquiries
  • Bank reconciliations and cash management
  • Division-of-interest maintenance
  • Lease and DOI record keeping
  • Monthly JIB processing
  • Tracking and maintaining billable company labor
  • Calculation of monthly producing, drilling, and construction overhead
  • Maintain monthly production reports
  • Perform gas balancing calculations and maintain records
  • Monthly revenue allocations and processing
  • Revenue and royalty distributions
  • Gas plant proceeds and distributions
  • Process run tickets and meter statements
  • Severance tax calculations and analysis
  • Customized monthly and quarterly reporting
  • Host joint interest and revenue audits
  • Respond to audits performed by your non-operators

Why hire us?

We have over 200 years of experience in joint interest and revenue accounting and management functions; we understand the importance of expertly handling these responsibilities for you while you focus on your core E&P functions.

We know the keys to success in an outsourcing relationship are communication, diligence, and experience. We will work with you to make sure processes and data are set up correctly the first time because we know emphasizing the upfront work results in a more efficient and effective ongoing process. We also know when changes require modification to the process to ensure continued efficiency and effectiveness. In addition, we will set up customized reporting and updates to keep you apprised and updated on the numbers that matter. You will also have the ability to remotely have real-time access into our accounting system.

For expenses, we know and understand JOAs and all the various Accounting Procedure vintages and their myriad of provisions. Martindale has conducted joint venture expenditure and revenue audits for more than 39 years, covering all operational situations, from single-well projects to shale plays to deepwater projects, so we have seen it all. We know what functions and costs are contractually chargeable and what are not given the agreement(s) in place, and we also understand how important asset control and reporting are.

For revenues, we know and understand leases and their provisions and nuances, as well as various state requirements and rules. We have conducted revenue, royalty, gas plant, take-in-kind, and other types of revenue-related audits for more than 39 years, so we have seen all the various lease, sales agreements, gas plant processing agreements.

Disclaimer: Martindale Consultants, Inc. is not a CPA firm and does not offer opinions on tax or financial statements.