Build Contractual WIG Groups LDO400

This program updates Working Interest Groups (LDOWIGs) from LDO division of interest (DOI). For each DOI, a LDOWIG is created for each working interest owner and associated burdens: royalties and overrides. Contractual Maintenance uses these groups to define new DOIs based on marketing contract arrangements. A report is generated showing the breakout of these working interest groups.

LDO400 updates LDOWIGs based on the royalty calculation method defined in Build Division of Interest - LDO110. The default royalty calculation method is W, which keeps royalties associated with the working interest owner. P is the royalty calculation method of Oklahoma properties. Because of Senate Bill 168, interest is based on a proportionate production interest (PPI) calculation with the communization of royalties. You can also flag your LDO division of interest to use the C method, which communitizes royalties. For further explanation of Senate Bill 168 and the PPI calculation, see the Land Division Orders Special Situations section in this documentation.

LDOWIGs are built with interest stored at both 8 precision and 12 precision. The 12 precision is used for actual DOI calculations, giving more significance, especially to those owners with very minimal interest. Owners with 0 interest at the 8 precision level are still accounted for.

Further Detail

SELECT

• Build Contractual WIG Groups - LDO400 selects LDO DOI records flagged for S (Split Stream interface) or B (Both Split Stream and Revenue interface). This flag is set in Build Division of Interest - LDO110.

• LDO400 also selects LDO DOI records with 100% interest defined (Complete status from Build Division of Interest - LDO110.

• The LDO DOI records are sorted by ascending date (in support of determining whether or not a NEW SS LDOWIG should be created).

• ALL changes made against an LDO DOI are processed, not just the most recent effective-dated change.

First Time Through LDO400

The first time working interest groups are built, a 100% ownership entitlement contract DOI is also built. The default entitlement contract is defined in LDO - LDO295. The default contract must have first been set up in Contract Master - SS100. The entitlement contract DOI is needed before you can set up marketing contract arrangements. The Gas Balancing system also needs this 100% ownership DOI to state the Working Interest Owner's Entitlement Interest.

'C'URRENT EFFECTIVE AND 'ALL' DATE MASS CHANGE

LDO400 analyzes each existing LDOWIG for a Working Interest (WI) owner change. The program creates a new LDOWIG if any part of the WI owner definition has been changed. This definition includes:

• Type Interest, Pay Code, Interest, Received Status, Tax Components, and Contract Components

If there is a WI owner change, the existing LDOWIG is expired and a new LDOWIG is created.

When making a Current change in LDO, not only is the current effective-dated LDOM updated, but the change impacts all future effective-dated LDOMs. Build Contractual WIG Groups - LDO400 updates the current effective-dated SSDM entitlement as well as the future associated SSDM entitlements.

ALL date change updates all LDOMs in place and Build Contractual WIG Groups - LDO400 updates all associated SSDM entitlements in place.

'N'EW EFFECTIVE-DATED CHANGE

A New effective-dated change in LDO creates a new effective-dated LDOM and updates all future effective-dated LDOMs. The new LDOM is selected for processing through Build Contractual WIG Groups - LDO400. A new SSDM entitlement is created and all future SSDM entitlements are updated in place. Build Contractual WIG Groups - LDO400 still looks back at the LDOWIG references from the old effective-dated LDOM to evaluate whether or not the New effective-dated SSDM can reference the old LDOWIGs.

The entire existing LDOWIG is analyzed and if there is any kind of change, the existing LDOWIG is expired and a new LDOWIG is created. The reason the entire LDOWIG is analyzed, versus just a change in WI ownership, is because of the need to have the SSDM entitlement reference the LDOWIGs that make up that dated entitlement.

The new effective-dated SSDM also brings over all contract references from the old effective-dated SSDM which are not permanently expired and which are in effect given the new SSDM effective date.

When making a change in LDO, not only is a new effective-dated LDOM created, but the change impacts all future effective-dated LDOMs. In LDO, all future LDOMs are updated in place. Build Contractual WIG Groups - LDO400 also updates all future associated SSDM entitlements in place.

Special Notes on LDO400 Processing

LDO400 calculates 8 precision interest information. It also calculates 12 precision interest information.

When accessing the interest information off of a Working Interest Group using Working Interest Groups - LDO115, the display is based on the 8 precision. When calculating the Revenue division of interest using SS130, the calculation is based on the 12 precision interests.

Be Aware That:

• It is possible to have an owner with a net of .01499642 on the LDOM and .01499637 on the WIG, and yet the 12 percent interest on the WIG is .014996410063.

• It is the 8 precision calculation differences that cause the creation of new LDOWIGs in Build Contractual WIG Groups - LDO400 - even though the LDOWIG has not been impacted by any mass change.