Whether you own interests in a few wells or a thousand, you’re likely receiving statements from dozens or even hundreds of different operating companies, each with their own reporting standards. Let’s assume you own royalty or mineral interests in 1,000 wells operated by 40 different oil & gas producers.
Assuming 3 to 10 lines of data for each well, you could receive anywhere between 3,000 to 10,000 lines of data spread across hundreds of check stub pages for a given month. And chances are, the statements each have their own reporting standards.
This is a data management nightmare that repeats every month, and you’re not alone.
But there’s light at the end of the tunnel. Get started by implementing the following three strategies for transforming your minerals and non-op revenue data processing so you can close your books each month faster than ever.
Are you feeling overwhelmed with processing the never-ending torrent of check stubs that flood your office every month? Like most owners and investors, you probably receive a chaotic mix of physical and digital statements in widely varying formats. Your check stubs hold vital revenue, pricing, and expense information, yet your team likely waits weeks for this data to be gathered and uploaded or manually keyed into your accounting system, delaying mission critical reporting and workflows.
Check stub data exchanges provide a partial solution to the problem by converting paper statements into a common format and streamlining delivery of revenue data for operators that participate in the exchange. But uploading all that data into your accounting system one statement at a time, and correcting all the errors as you go, can be very time-consuming. And you also need a way to efficiently convert the paper and digital check stubs for your operating partners that do not provide a digital version. which is where a third-party document conversion service can help.
Wouldn’t it be nice to completely eliminate manual data entry and error correction?
You’ve eliminated in-house data processing and built a strategy to streamline the delivery of revenue data for all of your operating partners. Now what?
Operators likely don’t deliver you information in exactly the same format. Lease and well names can vary greatly from operator to operator. Using the check stubs they send you, whether paper or digital, and transforming that information into a standard format is a big value add and essential for you to make critical, timely investment decisions.
So, the next step in the equation is to normalize the data.
You need a software platform that can standardize and normalize your check stub data while also quality controlling your critical asset information, such as interest decimals, commodity pricing, and deductions. With millions of dollars lost each year to underpayments and incorrect deductions; oil & gas investors must have a strategy to ensure data integrity.
In addition, you need reporting and analytics tools that then take that data and turn it into valuable insights, enabling you to make smarter and more informed investment decisions.
So, your revenue information has been converted, standardized and verified, the next step is to ensure your information flows seamlessly into your accounting system to support time sensitive workflows, daily reporting and analysis.
Whether you use WolfePak, OGSys, QuickBooks, or another oil & gas GL for accounting, your team needs a seamless way to work with revenue data complete with the tools they need to get work done. This entails a fully managed revenue service that automates the entire process of converting, transforming and integrating revenue data into the accounting and analysis software your organization uses.
With the right integration strategy, your team will spend less time manipulating revenue data and more time on higher value work.
In-house processing of non-op oil & gas revenue is time-consuming and error-prone, creating multiple risks and costs. Chances are, your team spends a large amount of time each month on data processing, including hand-keying check stubs, manipulating operator files, and troubleshooting data quality issues.
The result? Information delays, incomplete or inaccurate financial data, make it difficult to answer important questions about your portfolio, such as:
- Were up-to-date commodity prices used to calculate revenue?
- Do post-production costs make sense for each well and lease?
- Is my ownership decimal accurate for each payment period?
Let’s say your investors come to you and want to know which wells in the Permian Basin have been the most profitable over the past 6 months. Everyone stops what they’re doing and gets in a room to figure out where all of this data lives and how they’re going to pull it together. Ideally, you should be able to quickly find the answer from the data you receive today, but unfortunately, it’s not in a standardized data format and is not readily available for reporting. Your team should be spending time finding winning oil & gas investments and maximizing portfolio returns, not manually formatting and manipulating revenue and expense data.
Want to completely outsource your monthly revenue data processing while cutting costs? MineralSoft’s Managed Revenue Service – backed by our industry-leading mineral management platform – will free you from the overwhelming monthly burden of processing statements in-house. In addition, we’ll ensure the integrity of your revenue data and deliver the most up-to-date financial information right into your accounting system.
To learn more, visit mineralsoft.com/managed-revenue-service.