Weighted NRI
Say what??!!! Bet you didn't even know there's an option for Weighted DOI on your SSI Oil and Gas Accounting Software - WM03W ‐ DOI By Well Report - Options screen.
News flash…there is.
Hang on…once it's explained you'll understand how useful it can be. It makes a lot of sense and it lets you do a quick skim of well DOIs for “reasonableness”.
What is it?
It's just math. It is the ratio of each owner's Net Revenue Interest (NRI) to Producing JIB percent. But it's math that YOU don't have to do manually with a calculator. Computers are pretty great at doing math. They're consistent and correct, they don't fat-finger, and they get the same answer EVERY. SINGLE. TIME.
So…since we've got all the parts, why not let your SSI Oil and Gas Accounting Software do the heavy lifting!
It's just math, each well getting a percentage of the whole. But sometime there are LOTS and LOTS of individual wells flowing into a meter. All that production on all those wells has to be allocated. And then of course entered into SSI.
Here's how it works.
Pick a well…any well. In WM03W ‐ Print Division of Interest/Labels enter the well and go to the Options screen. On the lower left side select Weighted NRI (NRI/JIB) and run the report.
What will you get?
WI Weighted. You'll see the active DOI for all owners, and for the Working Interest an additional line showing WI Weighted. The weighted working interest is the working interest NRI divided by the JIB Producing percent ‐ which boils down to the ratio of Working Interest to NRI after royalty/override burdens. Even if you just eye-ball it, you'll be able to tell pretty easily if there's a DOI problem.
Simple example ‐ when each owner shows up with a weighted working interest of .875 you will know that your royalty/override burdens are .125 for a total of 1.0 ‐ yes? Especially if loading a new well/DOI, seeing the weighted working interest for each WI owner should make it glaringly apparent if there's a DOI problem.
Why do you care?
Because!!! You want your DOIs to be correct…don't you? Use this great tool as a quick review of the DOIs to verify accuracy.
Generally, you know on the front end your total royalty/override burdens and your total NRI, and this is an easy and fast way to verify the Working Interest to the burdens. It's easy to see if the DOI is “reasonably” correct for all the WI owners. If the weighted percent falls significantly outside the expected range ‐ in the above example the .875 range ‐ somewhere the DOI has been fat-fingered and the weighted working interest will be blown out…right? It'll be a red flag to check your DOI work.
Try it and see what you think ‐ you can't mess it up.
BONUS!!!
On the middle left side of the Options screen ‐ DOI Selection (above the Weighted NRI flag), select Working to get…ummm…Working Interest only! That cuts the royalties/overrides out of the report, which you don't need anyway for the Weighted Working Interest info. Now you'll get JUST the working interest owners with their weighted working interest.
Pretty exciting for us oil and gas accounting nerds…huh?
Next time you're setting up and checking DOIs, try this handy helper. It's guaranteed to make YOUR job EZier!!
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