The Integrated Oil and Gas System uses a data base concept that allows most information to be entered once and to be used by multiple applications. The Master File Application contains programs and reporting procedures to create and maintain master file records that are common to more than one other application in the system. The programs to maintain files that are not common to multiple applications are included in the applications that use the files.
The following common records are maintained by the Master File Application:
· Chart of Accounts
· Company Identification Masters
· Name and Address Masters
· Lease Masters
· State and County Masters
· Field Masters
· Control Records
· Prospect Masters
· Region and Geological
· Currency Conversion Table
All of the above records are maintained in a single physical file referred to as the Master File; however, each record type is processed separately.
Control records are used to customize the system to the individual users requirements. These records contain information such as valid source codes and printer and date options. The records also identify general ledger accounts that have unique specifications such as requiring a valid lease number with input transactions in order to maintain subsidiary ledgers.
Master File reports may be printed for each record type and lease and name and address labels may also be printed.
There is a single chart of accounts in the system that is shared by all companies. A record is set up in the Master File for each general ledger account and contains the account number, description and other information.
The account number is seven digits consisting of a three digit primary and a four digit sub-account number. The user may assign numbers as desired as long as related sub-accounts are grouped together by the primary number.
The trial balance is printed in account number sequence and heading lines and sub-totals may be specified by using asterisks in the account number.
For example :
ACCOUNT DESCRIPTION
1**-**** --- Assets ---
110-**** --- Cash ---
110-11** Banks
110-1110 First National Bank
110-1120 Second National Bank
111-1200 Petty Cash
120-**** --- Accounts Receivable ---
120-1100 A\R - Investors
120-1110 A\R - Employees
120-1200 A\R - Others
In the above example, account 1**-**** is a description line for ASSETS but does not produce a sub-total. Accounts 100-**** Cash, 110-11** Banks and 120-**** are both description and sub-total lines.
Sub-totals may be produced for primary accounts and the first two digits of the sub-account. In the above example, a sub-total for the primary 110 accounts and a sub-total of accounts 110-1110 and 110-1120 would be printed. A sub-total of the 120 primary accounts would also be printed based on the 120-**** description and sub-total account number.
It should be noted that the example applies to printing of descriptions and sub-totals on the trial balance and other detail reports, but does not apply to profit and loss statements and balance sheets. The sequence, descriptions, spacing and totals for P&L and balance sheets are determined by financial control records that are explained in the General Ledger Application documentation.
In assigning account numbers, it is important to assign separate primary numbers for accounts that have special reporting or processing requirements. For example, certain primary accounts may be designated as billable by control records and any entry transactions that use billable general ledger primary account numbers must include valid lease numbers for Joint Interest Billing. This means that all sub-accounts for a billable primary number are considered billable. The control records that may specify primary account numbers are :
· Billable Primary Accounts
· Gross Amount Primary Accounts
· Net Amount Primary Accounts
· Prospect Primary Accounts
· Lease Number Primary Accounts
· Name and Address Primary Accounts
· Drilling Primary Accounts
Each general ledger account number record may contain a six character category code to control account selection and accumulation by the Revenue Application. The first three characters may be variable and control account selection. The last three characters are defined by the system and specify under which report heading amounts are accumulated.
The first three characters are user defined; however, many companies elect to use the following codes:
Positions
Code
and Explanation
1st position N Non producing
P Producing
2nd & 3rd WI Working interest
positions RI Royalty interest
MI Mineral interest
PP Production payment
NP Net profit interest
The first three characters may be used to select the general ledger accounts that are selected to print lease payout and other reports. For example, producing working interest (PWI) may be entered and only the accounts coded with PWI would be included on the report.
The last three characters of the category code determine the report heading under which the account will be accumulated. The standard codes are:
| Positions | Code | Explanation |
| Last 3 Positions | OIL GAS PLT OTX GTX PTX PXT COM DHY HDL MSC STC LHC IDC EQP DHC LOE DPL DPR |
Oil income Gas income Plant products income Oil production tax Gas production tax Plant products tax Plant products tax Compression Charges Dehydration Charges Handling Charges Miscellaneous Charges Severance Tax Reimbursement Leasehold costs Intangible costs Equipment or tangibles Dry hole cost Lease operating expense Accumulated Depletion Depreciation |
The six character code may be set up for groups of accounts or by individual account. Groups are specified by entering a category code in an account description record - a record that contains a primary account and four asterisks. For example, if 401**** is the description record for the lease operating expense accounts and PWILOE is entered in the category code field of the record, all 401 sub-accounts are accumulated as producing working interest-lease operating expense unless a different category code is set up in a specific 401 sub-account record.
The system uses the category code from the sub-account record if one has been set up. If a category code is not set up for the sub-account, the system uses the code from the description record, i.e., the account with the same primary account and four asterisks in the sub-account field. If a category code is not set up in either the sub-account or description account record, any amount in the account will not be reported.
The Revenue Application requires category codes for:
· Gross and Net Payout Reports and other revenue reports
· Calculation of 90 Per Cent NIL
· The X26B FASTAX Report
FIELD
EXPLANATION
GENERAL LEDGER ACCOUNT # - The seven digit account number:
XXX three digit primary account
XXXX four digit sub-account
Asterisks may be used in the account number field for description lines and to control trial balance sub-totals. Sub-Total Control Asterisks :100-**** - A sub-total will print for the 100 primary account. 100-10** - A sub-total will print for 100-1000 thru 100-1099 sub-accounts.
DESCRIPTION - The 24 character account description that prints on detail reports.
P&L CODE - A 5 digit P&L and balance sheet sequence number that controls the format of financial statements. This number references the financial statement heading record that controls financial statement formats.
COMMENTS - A 60 character comment field that may be used for information about an account or instructions to a coding clerk. The comment prints on the Chart of Accounts listing.
CATEGORY CODE - The six character field used to group accounts for lease payout reporting and other reports.
1st position N Non producing
P Producing
2nd & 3nd WI Working interest
positions RI Royalty interest
MI Mineral interest
PP Production payment
NP Net profit interest
Last 3 positions OIL Oil income
GAS Gas income
PLT Plant products income
OTX Oil production tax
GTX Gas production tax
PTX Plant products tax
WPT Windfall profits tax
COM Compression Charges
DHY Dehydration Charges
HDL Handling Charges
MSC Miscellaneous Charges
STR Severance Tax Reimbursement
LHC Leasehold costs
IDC Intangible costs
EQP Equipment or tangibles
DHC Dry hole cost
LOE Lease operating expense
DPL Accumulated Depletion
DPR Depreciation
At least one company ID record is required for each company that is to be processed by the system. The record contains the company ID number, name and other information such as the first month of the fiscal year.
The size and complexity of the user's organization will determine the number of companies to be set up. The user also has the option of subdividing a company into division and branches. If divisions and branches are used, selected reports may be prepared at the branch level and consolidated for division and overall company reporting.
The company ID number contains the following fields :
Field Size
Company 2 digits
Division 2 digits
Branch 3 digits
An example of the records required for a company with two divisions (one division has no branches, the other division has two branches) follows :
Company Division Branch Explanation
10 00 000 Company Always required
10 10 000 Division Only required if
10 20 000 Division posting to the
10 20 010 Branch 1 division/branch
10 20 020 Branch 2 level.
In the above example, the 10-20-000 division record would not be required if all division 20 transactions are processed against branch records.
In the standard system, the following general ledger accounts apply only to the overall company ID number (10-00-000 in the example).
· Cash
· Accounts Payable
· Accounts Receivable
· Oil and Gas Revenue
The reason for this restriction is that many users only maintain cash, payables, receivables and oil and gas revenue at the overall company level. The system may be customized to allow all general ledger accounts to be used at all levels company, division or branch.
Company 01 Considerations :
A company 01 (01-00-000) record should always be set up since the company 01 name is used for common Master File listings. For example, the company 01 name is used in the heading of name and address listings and chart of accounts listings. The automatic use of the company 01 name applies only to listings of master files that may be used by multiple companies. The specific company name, for example company 10's name, is used for reports such as a trial balance.
Affiliated Company
Considerations:
The system will automatically create joint interest billing and revenue entries for affiliated entities. A company ID record must be set up for the affiliated entity and the company ID number must be set up in the affiliated entity's name and address record. The Joint Interest Billing and Revenue Applications generate inter-company accounting entries if an affiliated company ID is in the name and address record. Partnership books may also be maintained using this approach. For example, assume a corporation that is controlled by a partnership. In this case company 01 would be set up for the corporation which is the operating company. The partnership would be set up as affiliated company 02. Company 01 would joint interest bill and distribute revenue to company 02 and any non-affiliated interests.
Consolidation
Considerations:
Trial balance consolidations are requested by a terminal operator entering the beginning and ending Company ID's. Therefore, company ID's should be assigned in consolidation sequence.
FIELD
EXPLANATION
COMPANY ID - The seven digit company identification :
Company 2 digits
Division 2 digits
Branch or Dept. 3 digits
NAME - The 28 character company name.
NAME AND ADDRESS # - The seven digit number that identifies the company's name and address record. In most cases, a name and address record will be set up using the company ID number for the name and address number.
BEGINNING MONTH OF FISCAL YEAR - The two digit beginning month of the company's fiscal year. For example, August = 08, January = 01.
TYPE OF ENTITY - The one character entity code as defined below:
I = Individual, P = Partnership, C = Corporation
F = Fiduciary, T = Trust
DATE ORIGINATED - The Origination date in "MMDDYY" format.
TAX BASIS ACCOUNTING METHOD - The one character code as defined below:
A = Accrual, C = Cash, O = Other
NET INCOME - The seven digit equity general ledger number that net income is to be posted to when the books are closed at year-end. It should be styled as "Prior Years Income".
OIL & GAS ACCOUNTING METHOD - The two character code as defined below:
FC = Full Cost, SE = Successful Efforts
PAYROLL GL# - The wage general ledger account number if the company does payroll.
CO/DV/BR TO CHARGE PAYROLL EXPENSE - The company ID number to be charged for payroll wages if the company does payroll.
There is a single name and address file that is shared by all applications. A single record may be set up for each entity with which business is transacted. Each record contains a number to identify the entity, the name and address, telephone number and other information.
The name and address number is seven digits and is normally assigned in alphabetic sequence by name. The system contains an alpha lookup feature that may be used to automatically assign new numbers in alphabetic sequence.
The standard name and address contains eight possible lines:
Line 1 Name
Line 2 Additional Name 1
Line 3 Additional Name 2
Line 4 Additional Name 3
Line 6 Care of Name or Address
Line 7 Address
Line 8 City, State, Zip
The additional name lines are available for printing in any application, although they are used more in Revenue and Lease Records Application.
The record also contains fields for depository charges for delay rental checks, social security number or federal identification number for W2's and 1099's and an affiliated company number.
The affiliated company number is used by the Joint Interest Billing and Revenue Applications to automatically generate accounting entries for the affiliated entities that are set up in the system.
FIELD EXPLANATION
NAME & ADDRESS # - The seven digit name and address number that identifies the entity.
NAME - The 24 character name of the entity. Up to four additional name lines may be used for the Lease Record Application reports
CARE OF - The 22 character care of name. The field may also be used for addresses that require more than one line.
ADDRESS - The 19 character address.
CITY - The 11 character city.
STATE - The two character state abbreviation.
ZIP - The 10 digit zip code.
PHONE # - The telephone number:
Area Code 3 digit
Phone No. 7 digits
Extension 3 digits
INSURANCE DATE - Expiration date for insurance certificates.
DEPOSITORY BANK CHARGE - If this is a depository bank for delay rental or shut-in royalty
checks produced by the Lease Record application, the bank deposit charge is entered. The amount will be automatically added to the rental check amount by the Lease Record Application.
SOCIAL SECURITY OR FEDERAL ID # - The social security or federal ID number for W2's or 1099's. Federal ID numbers are entered with a minus sign (field -).
AFFILIATED CO/DV/BR - If this is an affiliated entity, the company ID is set up in this field.
The Joint Interest Billing and Revenue Applications automatically generate accounting entries for affiliated entities.
Lease master records are set up for all leases and each record contains a lease number, lease name, operator identification, location of the lease and other information. The lease master common data is used by multiple applications; however, for maximum system flexibility, investor working interests and revenue interests are maintained in separate files. The Joint Interest Billing Application maintains records containing investor identification and associated working interests in the Joint Interest Billing File. The Revenue Application maintains the revenue interest and owner identification in the Division of Interest File.
The three records - lease master, joint interest billing and division of interest are identified and associated by lease number. The lease master which contains the general or common lease data and must be set up before a joint interest billing or division of interest record is set up.
The accounting data entry transactions require a lease number to be entered for selected general ledger accounts in order to accumulate revenue and expense by lease. Control records are used to specify general ledger accounts that require a lease number. If an account is specified as billable in a control record, there must be a lease master and a joint interest billing record for the lease. The Revenue Application requires both a lease master and division of interest record to exist before revenue may be posted.
The lease number is seven characters and is sub-divided into a five character primary lease number and a two character suffix. The primary number identifies a specific lease and the suffix identifies sub-divisions within the lease; i.e., the suffix may identify wells within the lease. For example, the following numbering might be used for a lease with five wells.
Lease #
PRIMARY SUFFIX
12340 00 Base Lease Number
12340 01 Well 1
12340 02 Well 2
12340 03 Well 3
12340 04 Well 4
12340 05 Well 5
For the above example one lease master record containing the base lease number 1234000 must be set up in the Master File. Additional master records may be set up for the wells; however, they are not normally required since the base lease information applies to all wells on the lease.
If all wells on the lease have the same working and revenue interest, one set of working interest records would be set up using the base lease number in the Joint Interest Billing Application and one set of division of interest records would be set up using the base lease number in the Revenue Application.
|
Note: The working interest and revenue interest may be different; however, the working interest must be the same for all wells and the revenue interest the same for all wells if only one set of working and revenue interest records are used. |
If expenditures are to be reported by well, the lease number which includes a well identification suffix must be entered as part of the entry transactions that post charges to the lease. For example, to post expenditures for well 02, lease 1234002 is entered along with the general ledger account and amount.
If the user does not wish to report expenditures at the well level, the base lease number 1234000 would be entered for expenditure for all five wells.
If working interests are not the same for all wells on the lease, additional joint interest records must be set up. If the working interest for well 3 was different from well 1, 2, 4, and 5, an additional set of joint interest records would be set up using 1234003 as the lease number.
In some cases multiple sets of joint interest records must be set up for the same well. An example is when before and after casing point interests are different. Assume a lease with three wells with different before and after working interests; however, the before interest is the same for all wells and the after casing point interest is the same for all wells. An example of the numbering might be:
Lease #
PRIMARY SUFFIX
12350 00 Base Lease Number
12350 B0 Base Before Casing Point
12350 A0 Base After Casing Point
12350 B1 Well 1 Before Casing Point
12350 B2 Well 2 Before Casing Point
12350 B3 Well 3 Before Casing Point
12350 A1 Well 1 After Casing Point
12350 A2 Well 2 After Casing Point
12350 A3 Well 3 After Casing Point
Records for the base lease 1235000 must be set up in the Master and Joint Interest Billing Files. Two additional sets of records would be set up for the before and after casing point working interests in the Joint Interest Billing Application, 12350B0 for the before and 12350A0 for the after casing point interests.
To report charges by well, the primary lease and a well suffix must be entered as part of the input transaction that records charges to the lease. For example, to post before casing point expenditures for well 3, Lease 12350B3 is entered with the general ledger account and amount. To bill investors for their share, the Joint Interest Billing Application would use the working interest from the 12350B0 joint interest records.
The Joint Interest Billing Application determines the investor working interests from the lease number entered for the expenditure in the following manner:
a. The full seven character lease number (lease number with well suffix) is used to find matching joint interest records. If an exact match occurs, the working interests from the matching records are used.
b. If an exact match is not found, a zero is moved to the seventh position of the entered lease and the new number is used to match against the records in the Joint Interest Billing File. If a match occurs, the working interests from the matching records are used.
c. If a match does not occur in 1 or 2 above, the working interests from the base lease (suffix 00) are used.
This procedure is called the "Three Tier Lease Lookup"
In the example, expenditures were posted for Lease 12350B3. A match would not occur on the full seven character lease since a 12350B3 lease was not set up in the Joint Interest File. A match would occur when a zero was moved to the last position of the expenditure lease since 12350B0 is set up in the Joint Interest File.
Summary :
1. The lease number is seven characters. The first five characters sub-divisions within the lease.
2. A base lease number record, a lease record with zeros for the suffix, must be set up in the master file for all leases.
3. If the Joint Interest Billing Application is installed, joint interest records must be set up for the investors using the base lease number. Additional records must be set up for wells if working interests are not the same.
4. If the Revenue Application is installed, division of interest records must be set up for the owners using the base lease number.
FIELD EXPLANATION
LEASE # - The seven character lease number sub-divided into a five character primary or base lease number and a two character suffix. The base number identifies a specific lease and the suffix identifies sub-divisions within the lease such as wells.
LEASE NAME - The 24 character lease name.
STATE CODE - The two character state code.
COUNTY CODE - The three digit county code.
OPERATOR # - The seven digit name and address number of the lease operator.
OIL TYPE - Type of oil recovery. The codes may be user defined and are for information purposes. For example:
P - Primary
S - Secondary
T - Transferred
R - Regulated
GAS TYPE - Type of gas recovery. The codes may be user defined and are for information purposes. For example:
P - Primary
S - Secondary
T - Transferred
R - Regulated
PRODUCTION DATE - The date of the first production from the lease in MMDDYY
format. The date is used by the Depletion Application.
DATE ACQUIRED - The date the lease was acquired in MMDDYY format. The date is for information purposes.
CONTRACT DATE - The gas contract date for the lease in MMDDYY format. The date is for information purposes.
LEASE SEVERANCE TAX RATE - The 5 decimal digit severance tax rate for the states where the rate may vary by lease; i.e., Alabama, Colorado, Louisiana and New Mexico. The rates for states such as Texas that do not vary by lease are maintained in program tables. The rate is used in the calculation of windfall profit tax.
GAS ID # - The 10 digit comptroller's gas identification. The number is for information purposes.
USER DATA - 4 characters of user data for information purposes.
PURCHASER # - The name and address number of the purchaser. The number may be set up for information purposes. If the Revenue Application is installed, the purchaser number is in the Division of Interest Master and there may be multiple purchasers for the different products produced from the lease.
FASTAX - The 4 character FASTAX number. Used to sequence the X26B FASTAX report.
OLD AC # - Reserved
GROSS ACRES - The 5 digit gross acres contained in the lease. The data is for information purposes.
BILLABLE CODE - Reserved for future use.
PROSPECT # - The 5 character Lease Records Application prospect number. The number is for information purposes.
OUR WORKING INTEREST - The company's working interest in the lease. This field is for information only and may be left blank. Actual working interest is normally obtained from the Joint Interest File and may vary for wells in the lease.
REVENUE INTEREST - The company's revenue interest in the lease. This field is for information only and may be left blank. Actual revenue interest is normally obtained from the Division of Interest File maintained by the Revenue Application.
OIL RESERVES - Oil reserves in barrels. The field is 11 digits and contains 2 decimal places. The data is for informational purposes.
GAS RESERVES - Gas reserves in MCF's