TABLE OF CONTENTS


Operating Overhead Setup

In order to generate overhead transactions in Enertia, there are a few master files that must be completed. While Enertia can be used to generate different types of overhead transactions (drilling overhead, project percentage overhead and operational percentage overhead), this document will focus on the key settings pertinent to operating overhead.

 

JIBOH Transaction Type Setup

At least one JIBOH transaction type must be created in order to generate billable overhead. Additional transaction types can be created if needed to generate different types of overhead that offset to different accounts. 

 

In order to set up a JIBOH transaction type, the following should be selected:

 

User Txn Type and Description - these fields are user-defined and can be used to differentiate between transaction types for different types of overhead.

System Txn Type - should be set to JIBOH.

Txn Source - should be set to JB.

Primary Account - this field is not required because the billing category on the Overhead Type setup form will be used for this side of the entry. The JIB Gross account would be a reasonable placeholder if you want to select an account in this field.

Offset Account - this field is typically set to the income account where you want overhead booked.

Offset Type - should be set to AJ.

 

 

Overhead Type Setup

While the transaction type setup determines how the overhead offset entry is generated, the Overhead Type drives how billable transactions are booked. Multiple types of overhead can be set up if different functionality or journalization is required.

 

The Overhead Type form is located on the Enertia main menu under Master Files > Joint Interest Billing. In order to set up an overhead type for operating overhead, the following should be populated: 

 

Overhead Type Code and Description - these are user defined fields that describe the purpose of the overhead type.

OH System Type - should be set to OPOHD for operating overhead.

Billing Category - the billing category selected in this field will be used to generate any billable transactions from overhead groups of this type.

Txn Type - select the JIBOH transaction type created based on the instructions above.

 

There are some additional checkboxes that determine how the overhead transactions will be journalized: 

 

Post the Corporation Net Share By Overhead Post Rules - Specifies that when the corp’s net share of the overhead expense is billed and posted, it will be journalized based on posting rules set up on the Overhead Post tab of the Overhead Setup Form. If an entity type and code are selected on the Overhead Post tab, the system will book that property to the corp’s net share of the expense. The entity types available to select on the Overhead Post tab are based on the account posting rules on the overhead income account.

 

Post the Corporation Net Share to the Overhead Income Acct - Specifies that the Overhead offset entry will be journalized to the Overhead Income Account Specified. If this checkbox is selected, the Overhead Income Account field becomes required. Select this checkbox if you would like to reduce the overhead income by the amount of the corp’s net share rather than realizing the overhead expense for the corp.

 

Post the Income Account by Overhead Group Post Rules - Specifies that any Overhead offset entered to the Overhead Income Account will be posted based on the posting rules set up on the Overhead Post tab of the Overhead Setup Form. If an entity type and code are selected on the Overhead Post tab, the system will book that property to the income account transaction. The entity types available to select are based on the account posting rules on the overhead income account. If this checkbox is selected, the Overhead Income Account field becomes required.

 


The Override Well Count Dispositions tab is not required but can be used for overhead types where the associated overhead groups are set up as Well Count Tier Rate groups. By default when generating well counts from production, the system will use production with a disposition of FRM (formation). To include production of other dispositions in the well count calculations, select the applicable dispositions on the Override Well Count Dispositions tab by moving them to the right pane. 

 

 

Overhead Group Setup

The overhead group form is used to determine the properties to charge overhead to and the rate that will be charged. At a minimum, to add a new group the overhead Group, Overhead Rate and Overhead Property tab have to be populated. Other tabs may be necessary depending on the group setup and whether you want to use certain overhead processing functions.

 

To add a new group, click Add on the Overhead Groups tab. Select an Overhead Type and enter a code and name for the overhead group. Select whether the group will be a Well Count Tier Rate or Fixed rate group and select the “Allow Rate Escalation” checkbox if the group is eligible for escalation.

 

Well Count Tier Rate - Overhead for groups of this type are based on production as represented in the PAD attribute for the property. Once production is closed for the month, the well counts can be generated and only producing properties will be charged overhead. Tier rates can be set up for these groups such that a different rate can be charged if a certain number of properties are producing in a month. 

 

Fixed Rate - Each property in the group will be charged a fixed rate of overhead regardless of whether to property has production in a given month.

 

 

Select the Overhead Rates tab and click Add. Enter the effective date and rate to charge as a default for the properties in the group. For Well Count Tier Rate groups, the Begin Well Count and End Well Count fields are available. If you want to charge different rates of overhead depending on how many properties in the group are producing, you can enter more than one record with different well count ranges and the amount that should be charged if the well count falls within that range. To set up one rate regardless of the producing well count, set up the form as shown below.

 

 

Finally, the Overhead Property tab must be filled out. Enter the effective date for the property setup in the Period field and then click Add. Select Property and Overhead Deck. Click OK to save and repeat the process for all properties in the group. 

 

An Override Rate can be entered if applicable - if the override rate is zero, the property will be charged the rate on the Overhead Rates tab.

 

If the property is considered marginal, the system can automatically reduce the overhead charge by a specified percentage. To do this, select the Marginal checkbox and select a Marginal Rate by which you want to reduce the overhead change. The Marginal Rate Type records are set up in a data-driven maintenance table that can be accessed by right-clicking on the drop-down arrow and selecting Maintenance Forms.

 

For Well Count Tier Rate groups, a section of the form can display where you can select whether to pull production from the property specified in the group or from its children. This allows you to charge overhead at a higher level of the property lineage based on the well completions that roll up to the specified property. For instance, if a Field is added to the overhead group and set up to pull production from the well completion children, the Field will be charged overhead for each of its producing well completion children. A checkbox is available to only consider production for operated properties when calculating overhead.

 

 

The Overhead Post tab is only required if the “Post the Corporation Net Share By Overhead Post Rules” or the “Post the Income Account by Overhead Group Post Rules” checkboxes are selected for the Overhead Type selected on the Overhead Group. This tab defines the property that will be populated onto applicable generated offset entries.

 


The Overhead Property Generate Criteria tab is only required if you want to use the Overhead Property Generate Process to populate properties into the overhead group. This tab defines the criteria used to gather properties to be added to the specified group. Check the “Regenerate Monthly” checkbox to completely regenerate the overhead group each time the process is run. If the checkbox is unchecked, the system will check the existing properties in the group against the properties that meet the entered criteria and add any missing properties to the group.

 


Deck Setup for Exempt/Free Partners

If a particular partner in a property should not be charged overhead, there is a deck setup option that allows you to mark them as exempt or free. To complete this setup, navigate to Master Files > Ownership > Deck Maintenance on the Enertia main menu. Select the deck to update and open the JIB Owners form. Select the owner to mark as exempt or free of the expense in the grid and then click the Owner Exempt/Free button. Click add and select whether the owner should be exempt or free of the expense. Select a billing category and click OK to save.

 


If the owner is marked as exempt of the expense, the system will journalize their net share of the expense to an Exempt Account specified on the billing category setup. This option should be used if the operating corp is going to assume the owner’s share of the expense.

 

When the Exempt radio button option is selected, the Billing Category drop-down list will load with all billing categories that have an Exempt Account specified on the Category Detail tab of the Billing Category form.

 

 

If an owner is marked as free of an expense, the owner's portion of the billable expense is allocated to the other non-deleted working interest owners in the deck that are not also flagged as free from the billing category.


Tips and Best Practices for Overhead Maintenance

Rate Escalation

The overhead rate can be escalated by a set percentage as needed. You can escalate all your overhead groups of the same overhead type at once.

 

To escalate rates, open the Overhead Setup form from Master Files/Joint Interest Billing. Select a group with an overhead type that you would like to escalate and click on the Overhead Rates tab. Click the Escalate button in the bottom left corner to open the Overhead Escalation tab. Click Add and enter the Escalation Date and Escalation Factor to use. Click OK to save. 

 

 

To escalate the rate for all groups of the same overhead type click the double arrow Escalate button at the top of the form. The Overhead Rate tab and any override rates should automatically show the effective dated change of rate.

 

 

Override Rates

If there are properties included in a particular overhead group that should be charged a different rate than the other properties in the group, an override rate can be entered for the property on the Overhead Property tab. This allows you to set up a smaller amount of larger groups - all the properties that should journalize the same can be added to the same group and the override rate field can be used to maintain different rates for the different properties. If you escalate rates for a group, the override rates will automatically escalate as well.

 

 

End Dating Properties

If a property in a particular group no longer needs to be charged overhead, the best practice is to end date the property record rather than simply deleting it from the group. This will allow you to maintain an effective dated history of the group. To do this open the Overhead Setup form, select the applicable overhead group and click the Overhead Property tab. Enter the date as of which the property should be removed from the group in the Period field.

 


Next, select the property to be removed from the group and click the Delete button at the top of the form. The system will end date the property as of the Period entered. Any overhead generated prior to that effective end date will bill the property but any overhead generated after that date will exclude the property.

 


Overhead Monthly Processing

Overhead Generate Process

The Overhead Generate Process can be used to generate properties into overhead groups based on a set of criteria that is populated on the Overhead Setup form.

 

Groups can either be set to regenerate monthly (where each time the process is run the previous group records are end dated and the group is completely regenerated based on the selected criteria) or they can be set to just add any missing entities to the group when the process is run. 

 

In order to use the Overhead Property generate process, the Overhead Property Generate Criteria tab on the Overhead Setup form must be populated. 

 

To add a new set of generation criteria for the overhead group, click the Add button and fill in the prompts to reflect what properties need to be populated into the group. 

 

Check the “Regenerate Monthly” checkbox to completely regenerate the overhead group each time the process is run. If the checkbox is unchecked, the system will check the existing properties in the group against the properties that meet the entered criteria and add any missing properties to the group. 

 

 

To begin the process, navigate to Processing > Invoicing/Accts Receivable > Overhead Group Property Generate Process on the Enertia main menu. Click the Add button, enter the effective date you would like to use for generating properties into overhead groups, enter comments if needed, and click OK.

 


The left grid in the process is populated with any groups where generate criteria has been added in the Overhead Setup form. The filters at the bottom of the form can be used to filter the list if needed. Select the groups to generate properties into by moving them to the right grid. Clicking the double arrows will move all the groups to the right grid. 

 

 

The OH Group Prop Generate step will find any property that is marked as an Expense Property and meets the criteria set for the group. If the group is set to Regenerate Monthly then all the properties will be added to the group and any previous overhead property records will be end dated. If the group is not set to Regenerate Monthly, any new properties that meet the criteria will be added to the group.

 

The OH Property Deck Selection step is for OPOHD type groups only. The system will use the default deck on the Expense Deck attribute for the property and billing category on the group. If there is no default expense deck for the billing category on that property, the user will have the opportunity to select a deck during the process.

 


During the OH Property Generate Review step, reports will generate that list the properties being generated into each group. There are separate reports for Regenerate Monthly and non-Regenerate Monthly groups. If the results of the process look correct, the last step is to finalize the process. 

 

 

Generating Well Counts

If you have well count groups set up, you should generate the well counts from production before generating your monthly overhead transactions. To generate well counts, open the Overhead Setup form, select a Well Count Tier Rate group on the first tab and then navigate to the Overhead Property Well Count tab.

 

Set the Period to generate well counts for at the top of the form and click the Generate Well Counts from Production button. Select the All OH Groups radio button to generate well counts for all groups in one process and set the Source Prod Month. Click OK to generate the well counts - any property that has production with an FRM disposition or any selected override dispositions will be charged overhead.

 


Generating Overhead Batches

To generate your monthly overhead transactions, open up Transaction Batch Entry and select the Generate Transactions button in the bottom left corner of the form. Select the Billable Overhead button, click Add and populate the Corp, Accounting Date, Process Date, Invoice Date, Service Date and Invoice Number to populate onto the overhead transactions. 

 

You can generate all overhead groups in one process, including groups of different overhead types. You will be prompted to enter a batch ID and description to use for the overhead transactions and have an opportunity to review the batch before the process is finalized. The process will batch edit the overhead batch and then you can post the batch from the Transaction Batch Entry form. Once the batch is posted, the transactions will be ready to bill during your regular JIB processing.

 

If you need to regenerate overhead, you will need to delete the previous batch if it is unposted or reverse the previously generated transactions in order to avoid double-booking your overhead for the month. 

 

 

Overhead Process Steps

Step 1 - Confirm Selection - Select one or more overhead groups to process by moving groups from the left grid to the right grid.

 

 

Step 2 - Preliminary Recap - The Preliminary Recap step evaluates all of the records selected to determine if there are any errors or problems that would prevent the continuation of the process.
 The system verifies that the selected overhead group has not been selected in another process for the same service date (this is only a warning). The system also validates that the corporation has at least one address set up where the system address type is "aaMasVendor", as well as makes sure that property records exist for each selected group as of the service date.

 

Step 3 - Calc Drill and Pct OH - This step of the process will only be available when one or more of the overhead groups selected have a system overhead type of Drilling or Percentage overhead. When those overhead types are selected, this step will gather the necessary data to perform the overhead calculation and in the case of Drilling/Rig overhead will allow the user to override the number of days that the well/Afe is subject to OH before completing the calculations.

 

Step 4 - Select Overhead Batch - The Select Overhead Batch step determines if the overhead transactions are to be generated into a batch, a workflow, or both. Once the user has entered information as required, the transactions can be generated. 

 

Use the Edit button to populate the required fields in the Batch Details section now displayed in the center of the form. Select the OK button to save the information.

 

 

Step 5 - Review Overhead Batch - The Review Overhead Batch step allows the user to open the created batch and review the created transactions. This is also where you can review any validation errors that occurred during the batch generation process. You cannot proceed to the next step until all errors are reconciled. 

 

Step 6 - Finalize - When this step is executed, the system prompts the user to confirm that the process is ready to Finalize. When the finalization is confirmed, the process is complete and the batch is available to post in Txn Batch Entry.