General
The Drillinginfo Lease Reconciliation system is a simple means to reconcile check stub data with that reported by the operator to various regulatory agencies. Arithmetic is checked in the process. Variances are calculated and displayed.
The Lease Reconciliation system also allows the user to maintain an archive of check stub data so that he can view trends in differences between sales and production, prices paid, etc. Also, the system allows entry of the payment date, tax deducts and other deducts. This information, together with the owner gross revenue information, can be copied to a spreadsheet at tax time and given to the accountant.
Number of leases included with each user’s license: 50 (ie, 50 different leases can be reconciled each month at no extra charge.) Additional leases can be reconciled at a cost of $1/year per lease.
Data Availability
Texas
Sales/Disposition volumes for gas and oil: 1/2002 forward
Sales revenue ($) for gas & oil: mid 2001 forward
Note: Some operators report severance tax on an annual basis (those with less than $3500 per year in estimated revenue). Leases included in these annual filings can’t be reconciled on a monthly basis.
Louisiana
Sales/Disposition volumes for oil only: 4/2001 forward
Other states – coming soon!
Steps to setting up a new lease and performing a reconciliation
The Drillinginfo Lease Reconciliation Tool is found under the MyDI button of the Drillinginfo web application. It allows royalty owners and working interest owners to cross reference their checkstub information with information reported by the operator to the regulatory agencies.
After clicking on LEASE RECONCILIATION, we are taken to a page that lists the wells or leases that we are monitoring.
We then click ADD NEW to add a new well.
Only a few items are required information, including the arbitrary NAME you want to access this well or lease by, the STATE, the LEASE TYPE (gas or oil), the REGULATORY NUMBER (gas or lease ID in Texas for instance), and, lastly, your interest. Here we are putting in a 1% Royalty. This system works with Royalty Only, Working Interest Only, or Working Interest and Royalty mix. We then click OK.
Let’s reconcile West Temple by clicking RECONCILE.
We are taken to a sheet that is not yet filled out. To fill it out, we click the NEW MONTH button on the lower right side of the sheet.
We input the information from the checkstub. The only required inputs are Lease sales volume and Owner gross sales. Click OK.
We see that the owner and regulatory sales volumes correlate. However, we see that our payment is less than we should have received due to the price per MCF or per barrel the Operator reported for sales. Did I forget to include the oil portion of my check? If not, it is time to call the Operator.
Step by Step Procedures
First, set up the new lease:
1. Go to MyDI.
2. Click on the Lease Reconciliation link.
3. Click on the Add New link.
4. Enter the Lease Name (this can be any form – it is not used to query our database)
5. Optional: Enter the Owner’s Property # – if any.
6. Enter the State.
7. Enter the Lease Type – oil or gas.
8. Enter the Regulatory District (not shown if gas is selected in Texas).
9. Enter the Regulatory Number – the gas well ID # or oil lease number in Texas, or LUW code in Louisiana.
10. Optional: Enter the Operator and Operator’s Property # - this is just for your information.
11. Optional: Enter the Purchaser and Purchaser’s Property # - this is just your information.
12. Enter any or all of the following that is applicable:
• Your Royalty Interest.
• Your Working Interest and attributable Net Revenue Interest.
• Your Overriding Royalty Interest.
13. Click on OK.
Next, add the monthly check stub data:
1. From the Lease Reconciliation Hub page, click on the Reconcile link.
2. At the far right of the reconciliation page, click on the new month link.
3. Enter the Production Month and Year (not the payment date).
4. For each of oil and gas:
5. Enter the Lease Sales Volume (the volume sold for the entire lease).
6. Optional, if available: Enter the Owner Sales Volume (the owner’s net volume).
7. Enter the Owner’s Gross Sales dollars, before deducts.
8. Enter the Payment Date, which is your choice of the check date or the date the check was deposited – depending on your accounting system. This is for your record keeping only - it is not used by the system.
9. Enter the Owner Taxes and Owner Deducts (not including taxes). This is for your record keeping only.
10. Click on OK.
View the reconciliation.
1. When OK is clicked after a new month is entered, you are take to the Lease Reconciliation page.
2. The boxes shaded in yellow reflect the items you entered from your stub. The boxes shaded in red reflect the differences between your check stub data and the regulatory reported data. The boxes with white backgrounds are typically items derived from the Drillinginfo database.