One of the biggest headaches in oil and gas accounting is owners who do not pay their JIBs. Accounts Receivable fills up with old unpaid charges, and as the operator, you end up fronting well costs for investors who never settle up.
The obvious solution? Apply oil and gas revenue to outstanding JIB charges. Also known as NETTING.
Everyone does it. Everyone dislikes when it happens to them. It would be easier if everyone simply paid their bills.
But since that does not always happen, SSI Oil and Gas Accounting Software provides multiple netting options.
Revenue Netting Options
- RPC03 – Net Revenue to AR by Well
Nets revenue only on wells that have expenses on those same wells. This is well‐to‐well netting.
Uses the “Net Revenue to JIB” flag (Yes/No) in WM03 – AFE/RP screen.
- RPC04 – Net Revenue to AR by Owner
Nets revenue across wells. Revenue from any well can be applied to AR balances from any well.
Uses the netting options in AR01 – JIB/Revenue screen under Net JIB Options.
- RPC04W – Net WI Suspense to AR
An extension of RPC04. Allows netting of permanent and/or under‐dollar‐limit suspense.
Still controlled by the AR01 netting options.
Both methods allow netting of:
- Working Interest only
- All revenue types (Working, Royalty, Overrides)
- Revenue against non‐JIB invoices, service charges, and more
NEW NETTING FEATURE in RPC04 – Net Revenue to AR by Owner
Exclude Invoices After This Date allows you to exclude invoices after a specified date. Only invoices prior to this date will be netted. Do you allow your owners 30 days to pay their invoices prior to netting? Enter a date 30 days prior. 60 days? 90 days? Choose any date you want
This option processes strictly by invoice date, starting with the oldest invoice in the AR05 open invoice list. It continues netting until one of the following things happens:
- Revenue is exhausted
- All eligible invoices are cleared
Important Notes
- Revenue netting will never apply to outstanding AFE Prepay Request invoices.
RPC03, RPC04, and RPC04W do not net against AFE Prepay invoices. Never have, never will.
- You are not limited to one netting method.
Some owners can be netted by well (RPC03), while others are netted by owner (RPC04/RPC04W).
It depends on AR01 and WM03 settings and the processes you select.
How to See What Was Netted
Owner History makes it easy.
- AR05 clearly displays which invoices were netted and flows through to the AR05 dashboard.
- Revenue reports (RP06P and RP26P) include a notation at the owner total revenue line showing amounts netted.
- For detailed netting information:
- RP06P – Owner Revenue To Be Paid → Column Option → Netted to JIB
- RP26P – Owner Revenue Paid History → Same column option
SSI Oil and Gas Accounting Software provides flexible, detailed owner revenue netting options to match real‐world scenarios.
.png){kind=small}
