The vocabulary on the statement.

An authorization for expenditure is the cost estimate an operator circulates to its working interest partners before undertaking a well or a major operation. Partners approve or decline, and the AFE becomes the reference point against which actual costs billed on the joint interest statement are later compared.

Partners commonly check a joint interest bill against the AFE they approved. Being able to produce the relevant statement quickly is the difference between a two-minute call and a two-week dispute.

See alsoJoint interest billingCash call

A cash call is a request by the operator for working interest partners to advance funds ahead of an operation, rather than being billed for the costs after they are incurred. Advances are credited against the partner's later joint interest billings.

See alsoJoint interest billingAuthorization for Expenditure

Check detail is the statement of production, prices, taxes, deductions, and decimal interest that accompanies a royalty or revenue payment. It explains how the payment amount was arrived at, property by property.

Check detail is the single most-requested document in owner relations, and the one most often delivered by mail purely out of habit.

See alsoRevenue statementRoyalty interest

COPAS is the professional body whose accounting procedures are commonly attached to or incorporated into oil and gas joint operating agreements. Its procedures define what may be charged to the joint account, standardized cost classifications for summary billing, and the fixed overhead rates an operator may charge per well by status, escalated annually.

JIB statements are prepared to comply with the JOA and its COPAS accounting procedure. Joint interest audits test that compliance.

See alsoJoint operating agreementJoint interest billingJoint interest audit

A decimal interest is an owner's share of a property expressed as a decimal fraction — for example 0.00781250. Costs on a joint interest bill and revenue on an owner statement are both allocated by multiplying the property total by the owner's decimal.

A wrong decimal is one of the most common errors on both JIB and revenue statements, and it usually surfaces as an owner question rather than an internal catch.

See alsoDivision orderWorking interestNet revenue interest

A division order is the instrument by which an operator and an interest owner confirm the owner's decimal interest in production from a property, along with the owner's identity, address, and tax details. Once in place, it governs how revenue from that property is divided and paid.

Division order changes — from sales, inheritance, or title corrections — are the reason an owner list is never the same two months running.

See alsoDecimal interestSuspenseRoyalty interest

Escheatment is the legal process of turning unclaimed property over to the state after due-diligence efforts to locate the owner have failed and the statutory dormancy period has expired. For oil and gas royalties, dormancy periods vary by state and are commonly one, three, or five years.

Undeliverable statements and returned mail are early warnings of an escheatment exposure. An owner you cannot reach today is unclaimed property later.

See alsoSuspenseOwner relations

A joint interest audit is a review, performed by or on behalf of non-operating working interest owners, of the charges an operator has billed to the joint account. It tests those charges against the joint operating agreement and its COPAS accounting procedure.

Audits ask what was billed and also what was sent, when, and to whom. A per-owner delivery record answers the second half without a search through email.

See alsoCouncil of Petroleum Accountants SocietiesJoint interest billingNon-operator

Joint interest billing is the process by which the operator of an oil or gas well bills each working interest owner for their proportional share of the costs of drilling, completing, and operating that well. The operator pays costs up front and allocates them among partners according to their working interests as set out in the joint operating agreement and its COPAS accounting procedure. Each partner receives a monthly JIB statement itemizing their share.

See alsoJoint operating agreementWorking interestCouncil of Petroleum Accountants SocietiesNon-operator

A joint operating agreement is the contract among working interest owners in a property that names the operator, sets out the rights and obligations of each party, and governs how costs and revenues are shared. Its accounting exhibit — normally a COPAS accounting procedure — governs how the joint account is billed.

See alsoCouncil of Petroleum Accountants SocietiesOperatorJoint interest billing

A net revenue interest is an owner's share of production revenue after royalties and other burdens are deducted. It is distinct from working interest, which is the share of costs an owner bears.

A working interest owner's cost share and revenue share are different numbers. Statements that conflate them generate immediate partner questions.

See alsoWorking interestRoyalty interestDecimal interest

A non-operator is a working interest owner in a property that another party operates. Non-operators pay their share of costs through joint interest billings and receive their share of revenue, but do not conduct operations. A company is frequently an operator in one property and a non-operator in another.

See alsoOperatorWorking interestJoint interest billing

The operator is the working interest owner designated under the joint operating agreement to conduct operations on a property. The operator contracts for services, pays costs as they are incurred, bills the other working interest owners their proportional shares, and distributes revenue to royalty and interest owners.

See alsoNon-operatorJoint operating agreement

Owner relations is the function inside an oil and gas operator that handles communication with royalty, mineral, and working interest owners — statements, payment questions, address and ownership changes, division orders, and tax documents.

Most owner-relations volume is three questions: where is my statement, why did the amount change, and can you send me last year's. All three are self-service questions given the right place to look.

See alsoOwner portalCheck detail

An owner portal is a secure website where an operator's royalty and working interest owners log in to view their own statements, payment history, and documents, and to update their contact and payment details, without contacting the operator directly.

See alsoOwner relationsCheck detail

A revenue statement is the monthly document an operator sends a royalty or revenue interest owner showing, per property, the volumes sold, price received, gross value, severance and other taxes, post-production deductions, the owner's decimal interest, and the net amount paid.

See alsoCheck detailRoyalty interest

A royalty interest is a share of production revenue free of the costs of drilling and operating the well. Royalty owners receive revenue and are not billed for operating costs, which is the fundamental difference between a royalty owner and a working interest owner.

See alsoWorking interestNet revenue interestRevenue statement

Statement bursting is the process of splitting one large print run into separate documents, one per recipient. In oil and gas, a monthly JIB or revenue run may be several hundred pages covering every owner in every property; bursting detects the owner breaks and produces a self-contained statement for each owner that can be emailed, posted to a portal, or printed on its own.

See alsoJoint interest billingRevenue statement

Suspense is the term for revenue an operator holds because it cannot legally be paid out — commonly due to an unsigned or undeliverable division order, a title dispute, an unlocatable owner, or a minimum-payment threshold not yet met. Funds held in suspense are not reportable on a 1099 until released.

Suspense is determined by the accounting system, not by statement delivery. But undeliverable statements are how suspense problems usually announce themselves.

See alsoDivision orderEscheatment

A working interest is an ownership interest in an oil and gas property that carries the obligation to pay a proportional share of the costs of drilling, completing, and operating the well. Working interest owners are the parties billed on a joint interest billing statement.

See alsoJoint interest billingNon-operatorRoyalty interest