Build or Update Revenue DOIs LDO350

This process builds/updates Revenue division of interest decks for wells and products for given effective dates, using the division of interest definitions in Land Division Orders. The initial Land Division Order division of interest (DOI) is defined in Build Division of Interest - LDO110.

Once the system creates a Revenue Division Order from the initial Land Division Order DOI, you must make all modifications by either copying the initial Land Division Order DOI to another effective-dated Land Division Order DOI using Build Division of Interest - LDO110, or by making modifications in DOI Mass Change - LDO300. LDO350 updates Revenue Division Orders with only the last change made to a well/product/effective date combination. For LDO DOIs set up to interface to Revenue, LDO350 takes the LDO-defined DOI and builds from scratch a Revenue DOI. The program does not do an analysis of the changes applied. It simply takes the LDO DOI in its current state and builds from scratch a Revenue DOI.

Note: If a Revenue DOI has been built from LDO, you can access that DOI and make modifications using the Division Orders - REV110. However, modifications to the DESCRIPTION or CONTRACT are the only two pieces that will remain intact the next time you process LDO350. All other modifications will be wiped out or overwritten.

Mass changes made in LDO300 only impact LDO DOIs. It is these mass-changed LDO DOIs, however, that get selected for LDO350 processing. Again, LDO350 uses the LDO DOIs to build Revenue DOIs. It does not do an analysis of the type of changes made. LDO300 can create new effective dated LDO DOIs or update in place with the same effective date. When DOI Mass Change - LDO300 updates Land Division Order files in place with the same effective date, the program finds the prior division order item and changes the existing division order in place. When DOI Mass Change - LDO300 creates a new effective-dated Land Division Order DOI, the program expires the existing Land Division Order DOI and updates the new Land Division Order DOI. LDO350 uses the expired DOI to expire the associated Revenue DOI, and uses the new effective-dated DOI to generate a new Revenue DOI. The new effective-dated Revenue DOI retains the description off of the expired Revenue DOI.

Changes to components and DOI Schedule assignments can be made outside of LDO300. Components can be added, removed, or modified via the Components tab on the Build Division of Interest - LDO110 and in the Create DOI from Division Order - LDO111 screen. Modifications to existing LDOM component definitions flag the LDOM so that the updates will be re-interfaced to Revenue by the LDO350 interface process.

A division of interest can also be expired and/or permanently expired using Build Division of Interest - LDO110. The system makes any modifications to the expiration date or the permanently expired flag in Land Division Orders and the associated Revenue DOI record using this LDO350 process.

Note: If you start out with an LDO DOI that has not been mass changed and has no associated Revenue DOI, and then you permanently expire the LDO DOI, LDO350 does not build a permanently expired Revenue DOI. You should see the following message on the LDO350 error report:

LDO350 LDOM "<LDOM ref>" perm expired with no DOM - not updating Revenue

Note Also: If you start out with an LDO DOI that is permanently expired but has an associated Revenue DOI, and that LDO DOI also has mass changes that have not yet been processed through to Revenue, the mass changes will be processed and then the Revenue DOI will be permanently expired.

In order for a record to be selected for processing, you must set the Revenue Interface flag to Y (Yes) in LDO System Setup - LDO295, and you must flag the Land Division Order DOI records with REV (Revenue) or BOTH (Revenue and Split Stream) Interface which is defined in Build Division of Interest - LDO110. The Land Division Order DOI must also be in a Complete status, where the total working interest and adjusted working interest each equal 100%.

The program creates an error report stating which Land Division Order DOIs did not create or update a Revenue Division Order and the reason why.

An Audit Report will be created only under certain circumstances.

Processing Logic

The division of interest breakdown on the Land Division Order Division of Interest (LAND_DIVISION_ORDER_MASTER (LDOM)) is the controlling factor in building the Revenue Division of Interest (DIVISION_ORDER_MASTER (DOM)).

Given the simple case, if there are no tax or contract exemptions on the Land Division Order DOI, and all owners are receiving, then the program builds the Revenue DOM (main distribution deck) percent directly from the LDOM.

If any owner is not receiving or if any owner is exempt from taxes or expenses, analysis is performed at the detailed LDO_TRACT_DETAIL (LDOTD) level. The building of the Revenue division order level is at 12 precision and the interest at the LDOM well level and the Revenue division order level is at 8 precision. Build/Update Revenue DOIs - LDO350 ensures that any split of an owner's interest on the building of the Revenue components is based on the 8 precision LDOM level. In other words, owner interests at the LDOTD level are summed and rounded to match the owner interest at the LDOM level.

The program posts all net revenue interest not received by an owner to a balancing owner. If needed, Build/Update Revenue DOIs - LDO350 automatically creates a balancing owner using the balancing owner and pay code valued defined in LDO System Setup - LDO295. The balancing owner type interest value is equated to the non-receiving owner's type interest.

If an owner is tax or contract exempt from a component, and there is an associated component schedule, the program spreads the exempted interest based on the owner and percentage assignment that is defined in the associated DOI_SCHEDULE. If an assignment is to a non-receiving owner, the assignment is transferred to the balancing owner.

When an owner is exempt, but there is no associated component schedule, the program spreads the exempted interest based on default logic. As the tax exempt default, if an owner tax exempt, or the exempt component code has been defined with a revenue interface of B (balancing owner) in Component Codes - REV125, the program posts the interest to the balancing owner. As the contract exempt default, if a burdening royalty owner (Royalty and Override) is contract exempt or the exempt component code has been defined with a revenue interface of W (working interest) in Component Codes - REV125, the burdened working interest owner is responsible for the expenses. Therefore, the program posts royalty owner contract exempt interest to the associated burdened working interest owner. If the associated burdened working interest owner is not receiving, the program posts the interest to the balancing owner.

LDO350 ensures that the insider owner is in the last owner position on the Revenue Division Order. The insider owner number is initially defined in the Revenue System Setup - REV295. If the division order does not have an insider owner, LDO350 ensures that the balancing owner is that last owner. The balancing owner number is initially defined in LDO System Setup - LDO295. The purpose of having the insider or the balancing owner in the last position on the deck is for rounding purposes during actual Revenue distribution.

Processing Logic Overview of Programs Called by LDO350

Update Outside Revenue Division Orders - LDO355 and Expire Outside Revenue Decks - LDO356 are subroutines that are called to update Revenue Division Order decks that were not built from an LDO DOI (all Revenue DIVISION_ORDER_MASTER records with no LDOM.REF (AMC 31)). For simplicity, these are referenced as outside decks. A Revenue deck built from Split Stream's interface to Revenue or a deck built using Revenue Division Order data entry is considered an outside deck. Depending upon the LDO system setup, a combination of LDO295 and LDO300 response to Suspense Release, it is possible the LDO350 will call Release Suspense - LDO360 to release suspense Detail Sales Ledger and Detail Sales Suspense dollar items.

The processing logic of Update Outside Revenue Division Orders - LDO355 updates Revenue Division Orders with ownership changes defined in the LDO system. When ownership changes are made in LDO, a record is built to store the change information (a DOI_MASS_CHANGE_CONTROL (DMCC) record). LDO355 uses the DMCC record to update the outside Revenue decks. When an LDO DOI is expired using Build Division of Interest - LDO110, Expire Outside Revenue Decks - LDO356 updates any applicable outside Revenue decks with the given expiration date. When an owner’s pay code changes or an owner transfers interest, the owner’s existing Revenue dollars are either released from suspense or allocated to a new ownership interest definition.