Royalty Obligations

Formula Level

Save

This button saves your work and takes you back to the appropriate screen.

Note: Since a formula can be maintained from multiple screens within Qbyte Metrix, this button will return the user to the screen from which they launched the formula maintenance.

Save and Continue

This button allows you to save your work and remain on the same screen to continue modifying the same formula. This can be useful if you are making many changes to the same formula and want to ensure that you save your work as you go.

Revert

This will undo any changes you have made since you last saved.

Delete Formula

This will delete the formula. You will be asked to confirm that you want to delete the formula.

Note: If the formula is being used on one or more Royalty Obligations, then the Royalty Formula Usage pop-up will be displayed, and you will not be allowed to delete the formula.

Usage

This will pop up the Royalty Formula Usage screen to show which Royalty Obligations, if any, are using the formula.

Note: It is recommended that you review the usage of any formula that you are modifying prior to saving to ensure that you are aware of the Royalty Obligations that may be impacted by the changes.

Cancel

This will take you back to the appropriate screen.

Note: Since a formula can be maintained from multiple screens within Qbyte Metrix, this button will return the user to the screen from which they launched the formula maintenance.

Advanced

This will pop up an Advanced Formula Maintenance edit screen that provides more options regarding manipulating multiple lines of a formula at once. Use this if you have a large formula and you want to move one or more formula lines more than one row at a time or if you need to copy or delete a group of lines within the formula.

Note: You cannot go to the Advanced edit screen if you have un-saved changes. Use the Save and Continue button to save any un-saved changes or click the Revert button to undo the un-saved changes and then click the Advanced button.

Copy From

This button will delete all formula lines from the current formula and replace them with the lines from the formula that you choose. You will be reminded that this will delete the current formula and asked to confirm that you want to continue. If you choose to continue, the Royalty Formula Advanced Search will pop up to allow you to choose the formula you want to copy from.

Line Level

Move Up

This will move the highlighted row up in the list of formula lines. If this is already the top-most row, then nothing happens.

Be careful when moving lines into or out of a Sub-Calculation grouping and ensure that the Sub-Calculation option is set correctly to reflect the lines new position in the formula.

Move Down

This will move the highlighted row down in the list of formula lines. If this is already the bottom-most row, ignoring the final total line for Net Royalty, then nothing happens.

Be careful when moving lines into or out of a Sub-Calculation grouping and ensure that the Sub-Calculation option is set correctly to reflect the lines new position in the formula.

Duplicate

This will duplicate the highlighted row. The new row will be added to the formula below the highlighted row.

Add

This will add a new row below the highlighted row. If there is only the final total line for Net Royalty in the formula, then the new row will be added above.

Apply

This is used to Apply changes that have been made to a specific formula line (not including changes made using the Move Up/Move Down buttons). Changes made will not be reflected in the list of formula lines until this button is clicked.

Revert

This will undo any changes you have made to the currently highlighted row (not including changes made using the Move Up, Move Down or Duplicate buttons).

Delete

This will delete the current formula line. You will be asked to confirm that you want to delete the line.

Sub-Calculation

This indicates whether the formula line is part of a sub-calculation. The sub-calculation functions similarly to brackets in a mathematical equation.

Options include:

• N/A - This indicates that the formula line is not part of a sub-calculation.

• Open Sub-Calc - This indicates that the formula line is the beginning of a sub-calculation. Think of this as an open bracket in a mathematical equation.

  • An Open Sub-Calc line must have Factor Type = System Value and Factor = Factor = SUB group total

• Sub-Calc Body - This indicates that the formula line is part of a sub-calculation

• Close Sub-Calc - This indicates that the formula line is the end of a sub-calculation. Think of this as a close bracket in a mathematical equation.

  • A Close Sub-Calc line should have Factor Type = System Value, Operator = Subtotal and Factor = Subtotal

In most cases, this defaults to N/A. However, if you are adding a line within a sub-calculation it will default to Sub-Calc Body.

Note: You cannot nest sub-calculations. One sub-calculation must be closed before you can open another one. Each sub-calculation group must have an Open Sub-Calc line, at least one Sub-Calc Body line, and a Close Sub-Calc line.

Operator

This indicates the operator that is to be used to apply the factor in the formula line.

Options include:

• Set Value - Use this when you want to set the current result to a specific factor. Note: This operator is typically used in the first line in a formula (as the starting point for the result) and the first line in the body of a sub-calculation (again as the starting point for the sub-calculation result).

• Add - Use this when you want to add a factor to the existing formula result (result of the previous line in the formula).

• Subtract (Deduct) - Use this when you want to subtract a factor from the existing formula result (result of the previous line in the formula).

• Multiply - Use this when you want to multiply the existing formula result (result of the previous line in the formula) by a factor.

• Divide - Use this when you want to divide the existing formula result (result of the previous line in the formula) by a factor.

• Subtotal - Use this when you want to display the existing formula result as a line in the formula.

  • Note: This should be the operator of the last line in a sub-calculation (Sub-Calculation = Close Sub-Calc). It is also recommended to use this before any line using the Store Value operator to ensure that the correct result is saved to a Memory or Store factor.

• Minimum - Use this when you want to take the minimum of the existing formula result (result of the previous line in the formula) and a factor.

• Maximum - Use this when you want to take the maximum of the existing formula result (result of the previous line in the formula) and a factor.

• Store Value - Use this when you want to save the existing formula result (result of the previous line in the formula) in one of the Memory factors (1 - 9) or Store factors for later use in the formula or other processes.
  
  

  • Note: It is also recommended to have the line before the line using a Store Value operator be a line using the Subtotal operator to ensure that the correct result is saved to a Memory or Store factor.
    
    

• Round Value - Use this when you want to round the existing formula result (result of the previous line in the formula) to a specific number of decimals. When this operator is selected instead of entering a factor you will be required to enter the number of decimals to round to.

• Truncate Value - Use this when you want to truncate the existing formula result (result of the previous line in the formula) to a specific number of decimals. When this operator is selected instead of entering a factor you will be required to enter the number of decimals to truncate to.

Factor Type

This indicates the type of factor that is to be applied in this formula line.

Options include:

• System Value - System values are values that are already contained or calculated by Qbyte Metrix. These are not factors that the user enters as part of the formula. For example, the production volume for a well/product is identified during the battery balance/process stage. If this value is required for a Royalty calculation, the system will look up the value and use it for the calculation. Click Here to see a complete list and description of available system factors.

• Fixed Value - A fixed value does not typically change from month-to-month, so the value can be entered directly into the formula. This also means that the same value is applied to all Royalty Obligations using the formula, so be careful when using the formula in multiple Royalty Obligations. Examples of fixed values are a fixed Royalty percentage or a processing or trucking rate. These values are retained along with the formula lines during the Monthly Close process and do not have to be re-entered each month.

• Monthly Input Value - Monthly input values must be entered each month for each Royalty Obligation that uses the formula. This factor type is for values that change from month-to-month and may be different in each Royalty Obligation using the formula. An example of this may be a trucking invoice or an operating cost as a deduction.

  • Note: These values must be entered each month as they do not get copied into to the next production month during the Monthly Close process.

Note: For factor values that may not fit the Fixed versus Monthly Input rules, there are two types of System factors (User-Defined Global Factors and User-Defined Obligation Factors) that may fill the requirement. In general, User-Defined Global Factors are IDs that are set up in Qbyte Metrix and can be referenced in one or more Royalty Formulas, but the actual value of the factor is entered only once. The same value is used by all formulas that reference the ID. The value can be entered monthly, but it will be copied into the next production month during the Monthly Close process. So User-Defined Global Factors are useful for values that are common across many formulas and do not change that often. User-Defined Obligation Factors are like their global cousin in that they are IDs set up in Qbyte Metrix and can be referenced in one or more Royalty Formulas. The main difference is that the actual value of the factor is entered at each Royalty Obligation using a Royalty Formula that references the ID. The value can be entered monthly, but it will be copied into the next production month during the Monthly Close process. So User-Defined Obligation Factors are useful for formulas being used as templates, where the Royalty Formula references, for example a Tract Factor, but the actual value of the Tract Factor is different for each Royalty Obligation using a Royalty Formula that references the ID. This is different from a Monthly Input factor in that these values will be copied during the Monthly Close, so they are for values that stay the same for long periods of time.

Factor

This is the factor that is to be applied in this formula line.

When Factor Type is System Value, the drop-down contains all available system values available for use in the formula. Click Here to see a complete list and description of available system values.

When Factor Type is Fixed Value or Monthly Input Value, the Factor defaults to Miscellaneous and should not be modified. Use the User Description mentioned below to put in a more detailed description as to what this factor represents. Changing the Factor from Miscellaneous can cause confusion when reviewing calculation details on various reports as it may look like it is a System Value being used when it is really a Fixed or Monthly Input factor.

User Description

This is a user-defined field used for reporting purposes, but it can also be used to provide more information regarding what the formula line represents, especially when using sub-calculations and/or memory factors. Once a Factor has been selected, the Factor Description is brought into the User Description field. Once in the User Description field, the User Description may be modified to better describe the formula element (for the Royalty Holder’s benefit) by simply typing over it.

Note: Typing over the description does not change the system description of the selected Factor. It is used to make the formula easier to read and understand.

Fixed Factor

This is an input field for lines where Factor Type is Fixed Value.

• Only enabled when Factor Type is Fixed Value.

• Maximum size is 10v8 and it can be negative.

Note: For factors representing a percentage, ensure that they are entered correctly based on how the Percentage option is set. When Percentage = Yes, the value of the factor is assumed to be a percentage (55.0 for 55%), and the calculation process will automatically divide this by 100 before applying to the formula. When Percentage = No, the value must be entered as a fraction (.55 for 55%).

Percentage

This indicates whether the factor on the line represents a percentage or not. This does not mean that only lines with Percentage = Yes can have factors that represent a percent. It indicates whether a percent factor is represented as a fraction or a percentage. When Percentage = Yes, the value of the factor is assumed to be a percentage (25.0 for 25%) and the formula will automatically translate to a fraction (by dividing the factor by 100) before applying to the formula. When Percentage = No, the value of the factor is taken as-is. If the factor represents a percent and Percentage = No, then it must be calculated/entered as a fraction (.25 for 25%).

Options are Yes/No, with the default of No.

Min

Entering a Min/Max indicates that the result of this formula line has a minimum/maximum value. After the factor has been applied to the royalty calculation, the result is then compared to the Min. If the calculation result is less than the Min entered then the calculation result will be forced to the Min.

Min must be less than or equal to Max. Min will typically only be equal to Max when both are 0.

Max

Entering a Min/Max indicates that the result of this formula line has a minimum/maximum value. After the factor has been applied to the royalty calculation, the result is then compared to the Max. If the calculation result is greater than the Max entered then the calculation result will be forced to the Max.

Max must be greater than or equal to Min. Max will typically only be equal to Min when both are 0.

Allow Negative

This indicates whether the result of this formula line is allowed to be negative. This means the result of the royalty calculation after applying the factor on this line.

Options are Yes/No, with the default of No.

When Allow Negative = No and the result of the royalty calculation after applying the current factor is negative, then the result is forced to zero.

Factor Type is System Value, and the Factor is User-Defined Global Factor

Select User-Defined Global Factor when you have a Royalty that needs to access a value that you enter once and can be used in multiple formulas.

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User-Defined Global Factor ID/Description

This is a type-ahead field where you can select the User-Defined Global Factor that you want to use.

Factor (button)

Use this button when you want to create a new User-Defined Global Factor to be used or when you want to view/modify the value for the selected User-Defined Global Factor. You will be automatically taken to the Royalty User-Defined Global Factor screen. Note: When you have finished saving changes to User-Defined Global Factor or you cancel out of the screen you will be brought back to the Formula screen.

Factor Type is System Value, and the Factor is User-Defined Obligation Factor

Select User-Defined Obligation Factor when you have a Royalty that needs to access a value that you enter once per Royalty Obligation.

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User-Defined Obligation Factor ID/Description

This is a type-ahead field where you can select the User-Defined Obligation Factor that you want to use.

Factor (button)

Use this button when you want to create a new User-Defined Global Factor to be used or when you want to view/modify the description of the selected User-Defined Obligation Factor. You will be automatically taken to the Royalty User-Defined Obligation Factor screen. You cannot enter a value for the User-Defined Obligation Factor using this button, as these factors are entered at the Royalty Obligation level. Note: When you have finished saving changes to User-Defined Obligation Factor or you cancel out of the screen you will be brought back to the Formula screen.

Factor Type is System Value, and the Factor is Mole Factor.

Select Mole Factor as the Factor when you have a Royalty that needs to take into account the entity analysis and, more specifically, the portion of a specific component within that analysis.

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Gas Component Type

Indicate the component whose Mole Factor you want to use.

Options Include:

• N2 - Nitrogen

• CO2 - Carbon Dioxide

• H2S - Hydrogen Sulphide

• C1 - Methane

• C2 - Ethane

• C3 - Propane

• IC4 - ISO Butane

• NC4 - Normal Butane

• IC5 - ISO Pentane

• NC5 - Normal Pentane

• C6 - Hexane

• C7 - Heptane Plus

Factor Type is System Value, and the Factor is one of:

• Sales Value: Ownership

• Sales Value: Ownership Gas and Products

• Sales Value: Ownership Gas and Prod NET of TC

• Sales Volume: Ownership

Select one of the Ownership-based factors when you have a Royalty that needs to take into account only a portion of Sales and not all Sales for the entity (which is the default when a Sales-based factor is used). There are two main ways in which you can indicate the portion of sales you want to include: by Owner and by Destination.

Ownership Type is Owner ID:

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Ownership Type is Participant Types:

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Ownership Type

Indicate how you are going to specify whose sales you want to include in the factor.

Options Include:

• Owner ID - include sales allocated to one specific owner

• Participant Types - include sales allocated to all owners with the included Participant Types (i.e., only include sales from Working Interest Owner and Working Interest Transfer and ignore sales from TIK royalties, etc.)

All Owners

Displayed only when Ownership Type is Owner ID.

Options are Yes/No. The default is Yes.

Owner ID/Name

This is a type-ahead field where you can select the Owner ID that you want to include.

Displayed only when All Owners is No.

Available Participant Type

This is a shuttle-box where you can choose the Participant Types that you want to include. You can choose one or more Participant Types.

Displayed when Factor has Ownership Type = Participant Types.

You transfer the Participant Types you want to include from the left-hand side of the shuttle-box to the right-hand side.

All Dispositions

Indicates whether to include sales to all sales destinations.

Options are Yes/No. The default is Yes.

Delivery System ID/Gov't Code/Name

This is a type-ahead field where you can select the Delivery System that you want to include.

Displayed when All Dispositions is No.

Factor Type is System Value, and the Factor is one of:

• Facility Charge: Value

• Facility Charge: Volume

Select one of the Facility Charge-based factors when you have a Royalty that needs to take into account the results of Facility Charge calculations.

Note: 

• Zero will be returned as the value for the factor if no charges are found matching the criteria.

• Facility charges for products gas and raw gas will be considered gas for Royalty Obligations.

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Facility Charge Type

This indicates the Charge Type of the Facility Charge result you wish to use as a factor.

Options include a full list of all the Facility Charge Types that you have set up.

Sequence Number

This indicates the Sequence Number of the Facility Charge result you wish to use as a factor.

This field is optional. If left blank the results of all Facility Charges that match the other criteria will be accumulated and used as the factor on this formula line.

Match Obligation Product

This indicates whether you want to specify the Product of the Facility Charge result you wish to use as a factor or want to have the product depend upon the product of the Royalty Obligation using this formula.

Options are Yes/No. The default is Yes.

When No, you must enter a Facility Charge Product.

Example: Factor is set up with Charge Type = 05 Marketing Fees, Sequence Number = blank (all sequences), and Match Obligation Product = Yes. The formula is used on both a C3 - Propane and a C5 - Pentane royalty for Well1. When the C3 royalty is calculated, all C3 charges with a Charge Type of 05 Marketing Fees allocated to Well1 will be accumulated and used as the factor. When the C5 royalty is calculated, all C5 charges with a Charge Type of 05 Marketing Fees allocated to the Well1 will be accumulated and used as the factor.

Facility Charge Product

This indicates the Product of the Facility Charge(s) result you wish to use as a factor.

Enabled only when Match Obligation Product is No.

Options include all Qbyte Metrix products that are valid for Facility Charges, including N/A (Not Applicable).

Example: Factor is set up with Charge Type = 05 Marketing Fees, Sequence Number = blank (all sequences), Match Obligation Product = No, and Facility Charge Product = N/A (Not Applicable). The formula is used on both a C3 - Propane and a C5 - Pentane royalty for Well1. When the C3 royalty is calculated, all N/A charges with a Charge Type of 05 Marketing Fees allocated to Well1 will be accumulated and used as the factor. When the C5 royalty is calculated, all N/A charges with a Charge Type of 05 Marketing Fees allocated to Well1 will be accumulated and used as the factor.

Factor Type is System Value, and the Factor is one of:

• Royalty : Volume

• Royalty : Value

Select one of the Royalty-based factors when you have a Royalty that needs to take into account the results of another Royalty calculation.

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Royalty Sequence #

This indicates the Royalty Sequence Number of the Royalty results that you want to include.

Note: The Royalty Sequence Number of the Royalty results that you want to use must be lower than the Royalty Sequence Number of the current Royalty to ensure that the Royalties are calculated in the correct order.

Operator is one of:

• Round Value

• Truncate Value

Select the Round Value or Truncate Value operators when you need to follow strict calculation rules (i.e., IOGC royalty formulas).

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Decimal Places

This represents the number of decimal places for a Round or Truncate operation.

• Must be within 0 - 9.

Factor Type is System Value, and the Factor is Table Lookup Factor

Select a Table Lookup Factor when you have a range of factor values that need to be applied to the formula depending upon the current result of the formula. This type of factor can be particularly useful for sliding scale royalties. Note: There can only be one Table Lookup per formula. You can use the same Table Lookup on multiple lines in the formula, but they will all reference the same Table Lookup.

In this example, we have a factor that decreases depending upon the value. If value is < 100, then the factor will be 15. For values >= 100 and < 200, the factor will be 12.5. And finally for values >= 300, the factor will 10.

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Edit (button)

To create/modify the contents of the Table Lookup, click the Edit button to the right of the User Description.

If Greater Than or Equal To

This represents the range for current result values.

Factor To Use

This represents the factor value to use when the current result falls into the range specified in If Greater Than or Equal To.

Apply (button)

Apply the changes made to the Table Lookup and return to the Formula.

Revert (button)

Revert any changes made to the Table Lookup and return to the Formula. Note: This will revert any changes made to the Table Lookup since the last save of the entire formula.

Add (button)

Add a new row to the Table Lookup.

Delete (button)

Delete a row in the Table Lookup.

Copy (button)

Use this button when you want to use a copy of the current Royalty Obligation to create a new Royalty Obligation. The information associated with the current Royalty Obligation is put into the clipboard and the Create New screen is displayed.

Data in the Clipboard and on a Create New screen

Paste (button)

Use this button when you want to paste the information from the clipboard into the new Royalty Obligation. Note: Once there is data in the clipboard, it can be pasted multiple times to create new obligations.

Another option that allows you to copy multiple obligations at the same time is Copy Royalties.

Product

This indicates the Product that the royalty should be calculated on.

Options include:

• RAWGAS - Raw Gas

• OIL - Oil

• GAS - Gas

• CO2 - Carbon Dioxide

• CO2MX - Carbon Dioxide Mix

• CO2SP - Carbon Dioxide Spec

• C1MX - Methane Mix

• LITEMIX - Lite Mix

• COND - Condensate

• LPGNGL - LPG/NGL

• C2 - Ethane

• C2MX - Ethane Mix

• C2SP - Ethane Spec

• C3 - Propane

• C3MX - Propane Mix

• C3SP - Propane Spec

• C4 - Butane

• C4MX - Butane Mix

• C4SP - Butane Spec

• IC4MX - Iso-Butane Mix

• IC4SP - Iso-Butane Spec

• NC4MX - Normal Butane Mix

• NC4SP - Normal Butane Spec

• C5 - Pentane

• C5MX - Pentane Mix

• C5SP - Pentane Spec

• IC5MX - Iso-Pentane Mix

• IC5SP - Iso-Pentane Spec

• NC5MX - Normal Pentane Mix

• NC5SP - Normal Pentane Spec

• C6 - Pentane Plus

• C6MX - Pentane Plus Mix

• C6SP - Pentane Plus Spec

• SUL - Sulphur

• BYP - Liquid by-products

  • Sometimes there is a single royalty agreement that covers all gas by-products for a well/tract. Typically, in Qbyte Metrix a separate Royalty Obligation would need to be set up for each gas by-product covered by the royalty agreement. This means that any changes to that single royalty agreement would have to be made multiple times. The alternative is to set up the Royalty Obligation using BYP as the Product and specifying which liquid by-products are to be included.

  • Cannot be used when Royalty Type is IOGC.

  • DOI Extension cannot be used.

  • TIK Royalties should be set up at the individual products, so those products should not be included in the list of by-products included in the BYP royalty.

In most cases, only data for the Product selected is used and there is only one royalty result for the obligation. However, there are a few exceptions to this.

The first exception occurs when a Parent product is selected, but the data for the well/tract is at the Child product level, or a combination of Child and Parent products at various facilities.

• If a non-TIK Royalty is set up on product C2 then the Royalty will be calculated on the accumulation of C2, C2MX, and C2SP data for the well/tract.

• If a non-TIK Royalty is set up on product C3 then the Royalty will be calculated on the accumulation of C3, C3MX, and C3SP data for the well/tract.

• If a non-TIK Royalty is set up on product C4 then the Royalty will be calculated on the accumulation of C4, C4MX, C4SP, IC4MX, IC4SP, NC4MX, and NC4SP data for the well/tract.

• If a non-TIK Royalty is set up on product C5 then the Royalty will be calculated on the accumulation of C5, C5MX, C5SP, IC5MX, IC5SP, NC5MX, and NC5SP data for the well/tract.

• If a non-TIK Royalty is set up on product C6 then the Royalty will be calculated on the accumulation of C6, C6MX, and C6SP data for the well/tract.

• If a TIK Royalty is set up on C3, then the Royalty is calculated on each of the individual products separately. Since the Royalty volume must be netted off the sales split, it must be at the same product as the sales. For example, if a C3 TIK Royalty is set up on a well/tract that has both C3MX and C3SP production, then there will be two calculation results: one for the C3MX portion of the Royalty and one for the C3SP portion of the Royalty. 

The second exception is when the Product selected is BYP.

• If a Royalty is set up on BYP then the Royalty is calculated on each of the individual products identified as being By-products for this obligation, separately. There will be a separate calculation result for each By-product.

Product is BYP

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For more information on setting up BYP royalties see How To: Set Up BYP Liquid By-Products.

Products Included

This is a link to the pop-up screen, displayed above, that indicates which liquid by-products are to be calculated using this obligation. Use this to view/maintain which liquid by-products are to be included in the Royalty Obligation. Initial selections will be based on corporate defaults. However, each Royalty Obligation can modify the selections to match their unique requirements.

• Note: Taken In Kind Royalties should be set up at the individual products, so those products should not be included in the list of by-products included in the BYP royalty.

When the Royalty Obligation is using the corporate defaults, the pop-up will show System Level as the heading for the list of by-products. Note: The corporate defaults are set up on the Royalties tab of the System Configuration screen.

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When the Royalty Obligation has modified the by-product selections, the pop-up will show Obligation Level as the heading. To modify the selections back to using the corporate defaults, click the Set to System button.

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Obligation #

This indicates a sequential number to differentiate multiple royalties for the same product. This field will be pre-populated based on the largest existing Obligation # for the same product and then incremented by 1. When there are no existing obligations this will default to 0001. Note: It is recommended that you use a four-digit format (i.e., 0001).

Typically, the Obligation # assigned to a particular Royalty Obligation does not matter. However, you may need to consider how you are numbering the obligations when you have dependencies between obligations at the same well/tract. There are two ways in which dependencies are created and both require that the Royalty Obligations be calculated in a specific order. Note: In general, Royalty Obligations are calculated in ascending order of Obligation #.

• Using a Royalty Formula that references the result of another Royalty Obligation.

• Using a Royalty Formula that references a User-Defined Global Factor that was populated by another Royalty Obligation.

Active

This indicates the status of the Royalty Obligation.

Options include:

• Yes - This indicates that the obligation is active and should be calculated and booked during Step Processing.

  • Default value.

• No - This indicates that the obligation is Inactive. Inactive obligations are calculated during the Step Processing, but they are not booked. The ability to inactivate a Royalty Obligation is most helpful when you need to set up obligations to test potential changes, etc., without having to book into financial before testing is complete (due to a Royalty review process or audit review).

  • Inactive Non-TIK Royalty Obligations are calculated as part of Step06 - Freehold and Override and will appear on various Qbyte Optix Royalty Calculation reports (indicating that they are Inactive), allowing you to review and test as needed.

  • Inactive TIK Royalty Obligations are calculated as part of Step02 - Sales and Transfers, but the splits will not be impacted. The Royalty Calculation Details report will not display the distribution of the expense as an Inactive TIK Royalty will not adjust the split, and therefore the distribution is not available to be reported. However, the results can still be validated using various other Qbyte Optix Royalty Calculation reports.

  • During Step02 (TIK royalties) and Step06 (non TIK royalties), if any errors occur on an Inactive Royalty Obligation, they will still be displayed as errors in the Message Centre, but processing will continue.

  • If an Inactive Royalty Obligation is made active in an amendment month, the newly activated Royalty Obligation will appear on the Financial Interface Voucher with no reversal (since the Inactive Obligation would not have been originally booked).

  • If a previously booked (active) Royalty Obligation is made inactive in an amendment month, the previously booked Obligation will be reversed out on the Financial Voucher, but the inactive Obligation will not be re-booked.

  • Note: Inactive Royalty Obligations will never appear on the Financial Voucher. Inactive IOGC Royalties are also not included in the IOGC calculations. 

  • For more information, see How To Inactivate a Royalty Obligation.

• Pending - This indicates that the obligation is in the process of being set up. The Pending status is useful when you are implementing new royalties and you do not yet have a Formula, but you want to at least enter a header or placeholder for the obligation. At some point in the future, a Pending obligation would typically become Active once an appropriate Formula has been determined and verified.

  • Obligations with this status will not be calculated and can be created without a Royalty formula. 

• Expired - This indicates that the obligation is in the process of being removed. The Expired status is most useful prior to removal of an obligation, i.e., for TIK royalties where the Royalty Owner may still have inventory that they have yet to dispose of. The Obligation Master must remain in existence until all inventory is disposed of (as the TIK royalties are not booked until the volumes are disposed). The obligation can be updated to be Expired, thereby not calculating a Royalty while also providing you with the ability to identify Royalty Obligations that are pending deletion.

  • Obligations with this status will not be calculated and can have a blank Royalty Formula.

Royalty Owner

This is a type-ahead field where you can select the Owner ID representing to whom the royalty is owed. You can also use the Advanced Search.

When the Royalty Owner is not a resident of Canada, NRT = Yes on the Owner Maintenance, the NRT (Non-Resident Withholding Tax) will be calculated for the royalty. NRT is not calculated on Taken In Kind royalties. By default the NRT will be calculated using the Default NRT Rate on the System Configuration screen's Configuration tab. However, each Royalty Owner may have a NRT Override Rate entered on the Owner Maintenance to be used when calculating the NRT. (Note: For booking purposes the generated Entry Definition for the NRT associated with the royalty will have a General type based on the Royalty Type and a Specific type of NRW.

Note: Over time, the Royalty Owner may change due to acquisitions, inheritance, etc. Instead of changing the Royalty Owner on each obligation, in each production month, use the Royalty Owner Mass Update to make the modifications more quickly and more efficiently.

Royalty Type

This indicates the type of royalty being calculated. This is used to differentiate booking and can also impact how the results are used (as for IOGC obligations).

Options include:

• Crown - Crown royalties are usually set up at the Well Master, but non-standard formulas can be set up with an Obligation Master.