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Why do I need to use Detailed Gas Deducts?
September 15, 2024
It’s no lie. Gas Deducts can be tricky business.
Deducts can be all over the place in terms of who has to pay what deducts. Especially if distributing to outside ownership and paying royalties, royalty owners may be responsible for SOME deducts, ALL deducts or no deducts. Just depends on what arrangement was made in the terms of the lease. It’s pretty easy to see how messy it can get. If you’ve not been detailing out deducts ‐ just been lumping ‐ and now have a royalty owner responsible for certain deducts and not for other deducts? Uh‐oh. No workie. Or a royalty not responsible for any deducts? You have to figure out some way to handle. Now we’re talking adjustment DOIs for the deducts, blah blah. Messy.
Implementing SSI’s Detailed Gas Deducts is the answer, and SSI has tools, Help Instructions and staff on hand to make that job much EZier – no muss, no fuss.
You or them, some or all. It’s very versatile.
The really cool thing about SSI is that there are choices. Detailed Gas Deducts withheld by the purchaser, Detailed Gas Deducts calculated and withheld by you, or a combo. And there are all kinds of options as to owners who get deducts, owners who don’t get deducts, calculating deducts, etc. SSI accommodates all scenarios for allocations, whether withheld by the purchaser receipts or deducts calculated and withheld by you.
Gas Deducts can be set to always be handled as detailed on all wells, or can be set as Optional to pick and choose what wells to handle as Detailed Gas Deducts. It’s not an “all or nothing” world.
Ok…so once it’s determined Detailed Gas Deducts are needed, how to start? The first thing is to decide what deducts are important to you – emphasis on you. Those deducts that have been lump summed in the past? What kind of detail do you want to see?
SSI Oil and Gas Accounting Software provides a max of 15 possible user‐defined Detailed Gas Deducts. You certainly don’t have to implement all 15 – just set the ones important to you. Think about what you want/need to see on Revenue History reporting.
RP20P is the “go‐to” for seeing Gas Deducts detailed out, and it exports to Excel. Corresponding Detailed Gas Deducts accounts, transactions and balances will appear on the General Ledger, both for the liability or income if calculating your own deducts, and on the Profit and Loss statement Oil and Gas Income section as contra‐accounts if your company owns a piece of the well pie.
Tree‐tops version on how easy it is to start up…
WM02 – Company Maintenance – Gas/Oil Deduct Names. Name the Detailed Gas Deducts. Also, on WM02 ‐ Company Maintenance – Revenue. Set the Gas Deducts option to Yes (for all wells) or Optional (to pick and choose what wells to detail).
GL01 – Account Maintenance – add accounts as needed for liabilities and for P&L Statement.
WM01 – Standards Maintenance – Categories. Cats 084 – 089 are used for Detailed Gas Deducts. Match the GL accounts added above to these cats.
WM02 – Well Maintenance – Revenue – Revenue Options – Detailed Gas Deducts – YES. Set the wells using Detailed Gas Deducts.
RP01/WM04 – Revenue Cross References. Tell SSI how you want the detailed deducts allocated.
Remember, this is just tree‐tops. Use the step‐by‐step instructions in SSI’s on‐line Help ‐ Revenue Payables section – Detailed Gas Deducts Overview for the nuts and bolts.
For those already using Detailed Gas Deducts, remember a max of 15 possible detailed deducts are available. Adding to existing Detailed Deducts is certainly do‐able if more detail is needed. There’s a doc in SSI Help (same place) on Increasing Gas Deducts for those who are already using Detailed Gas Deducts and want more.
There you have it. It’s EZ to see how SSI can make your job of getting Detailed Gas Deducts properly allocated and reported to your owners and to yourself.
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