Author: Valor

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In the intricate world of mineral management, understanding and accurately managing royalty payments stands as a crucial aspect. It’s not just about receiving payments; it’s about ensuring every dollar owed is accounted for. In this post, we delve into the vital process of royalty auditing and how Valor, a leader in mineral management, plays a pivotal role in safeguarding the financial interests of mineral rights owners.

Understanding Royalty Auditing

Royalty auditing in mineral management is more than just a financial check-up; it’s a comprehensive review of royalty payments, lease agreements, and production data. This process ensures that mineral owners receive the correct payments in accordance with their lease terms. It involves meticulously examining the volumes, values, taxes, and deductions reported by oil and gas operating companies.

The Importance of Expertise in Royalty Auditing

Given the complexity of royalty statements and the nuances of lease agreements, expertise in this domain is non-negotiable. This is where Valor comes into the picture. With a team of seasoned land and accounting professionals, Valor brings an unmatched level of knowledge and experience in interpreting lease agreements, analyzing royalty statements, and identifying discrepancies.

Valor’s Approach to Royalty Auditing

1. Comprehensive Analysis: Valor conducts an exhaustive review of royalty statements, cross-referencing them with production reports and lease agreements.
2. Identifying Discrepancies: The team at Valor is trained to spot any inconsistencies or underpayments, ensuring that mineral owners are not short-changed.
3. Transparent Communication: Valor believes in keeping clients informed. Regular reports and clear explanations of any discrepancies found are communicated accordingly.
4. Future-proofing Payments: By rectifying current discrepancies and providing recommendations for future audits, Valor helps mineral owners secure their financial interests for the long term.

Why Choose Valor for Royalty Auditing

Valor stands out as a beacon of trust and expertise in the field of mineral management. Here are the benefits of mineral management and partnering with Valor:

• Expert Knowledge: Valor’s team possesses in-depth understanding of the mineral industry’s financial aspects.
• Advanced Tools: Leveraging our proprietary mineral management technology, mineral.tech®, Valor offers precise and efficient auditing processes.
• Client-Centric Approach: Every client’s portfolio is treated with a unique and personalized approach.
• Long-term Partnership: Valor isn’t just a service provider; it’s a partner in ensuring the enduring financial health of your mineral assets.

Royalty auditing is a critical element in managing your mineral assets effectively. With Valor’s expertise, you can rest assured that your financial interests are being vigilantly monitored and protected. Embrace peace of mind in your mineral management journey with Valor as your trusted partner.

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Contact Valor Today

Interested in learning more about how Valor can assist you with royalty auditing? Contact us today and take the first step toward securing your mineral assets.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor’s Commitment to Trust and Excellence for Current and Prospective Clients

In the ever-evolving landscape of business operations, trust and security have become paramount, especially when handling sensitive client information and finances. For companies like Valor, achieving the SOC 1 Type 2 certification is not just a badge of honor; it’s a testament to our unwavering commitment to maintaining robust and secure processes. But what does this certification mean, and why is it so crucial for both Valor and our clients? Let’s dive in.

What is SOC 1 Type 2 Certification?

SOC 1 Type 2 is a certification developed by the American Institute of Certified Public Accountants (AICPA). It focuses on a company’s internal controls relevant to financial reporting. Unlike SOC 1 Type 1, which evaluates the suitability of control design at a specific point in time, Type 2 extends this assessment to the operational effectiveness of these controls over a period, usually a minimum of six months. Valor completed both SOC 1 Type 1 & SOC 1 Type 2 certifications in 2022 and 2023.

Key Elements of SOC 1 Type 2

1. Internal Control over Financial Reporting (ICFR): The certification scrutinizes how a company handles financial data, ensuring that financial reporting is accurate, reliable, and confidential.
2. Operational Effectiveness: It’s not just about having good processes but also about consistently implementing them effectively over time.
3. Regular Auditing: Regular, detailed audits are a cornerstone of SOC 1 Type 2, ensuring ongoing compliance and process optimization.

Why Was This Step Crucial for Valor?

For Valor, we are deeply ingrained in handling sensitive client data and financial transactions, therefore this certification was a non-negotiable step towards establishing trust and reliability. Here’s why:

Establishing Trust with Clients

Our clients need assurance that their information is in safe hands. SOC 1 Type 2 certification provides that assurance, signifying that Valor adheres to the highest standards for data security and financial reporting.

Enhancing Internal Processes

The journey to certification necessitated a thorough examination of our internal processes. This introspection wasn’t just about compliance; it was about refining our operations to serve our clients better.

Competitive Advantage

In a crowded market, being SOC 1 Type 2 certified distinguishes Valor from competitors. It’s a clear indicator to current and prospective clients that we prioritize and invest in robust security measures.

Compliance with Regulatory Requirements

For many industries, especially in the oil and gas industry, adhering to specific regulatory standards is not optional. This certification ensures that Valor is not just compliant but ahead of the curve in regulatory compliance.

The Impact on Valor’s Clients

1. Enhanced Confidence: Clients can engage with Valor knowing that their financial data is managed with utmost integrity and security.
2. Strengthened Partnerships: This certification often serves as a foundation for stronger, more transparent client relationships.
3. Assurance of Quality: Clients are assured of the quality and consistency of our services, knowing that our processes have been rigorously evaluated and tested over time.

Achieving the SOC 1 Type 2 certification is not the end of our journey. It is a continual commitment to excellence and improvement. Valor is dedicated to regularly reviewing and enhancing our processes, ensuring that we remain at the forefront of operational excellence and data security. This commitment not only benefits our clients but also propels us forward as a leader in our industry.

In conclusion, SOC 1 Type 2 certification is more than just a compliance achievement for Valor. It is a core part of our mission to establish unwavering trust with our clients and to continually enhance the quality of our services. By achieving this milestone, we are not just saying we value security and trust – we are proving it.

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Contact Valor Today

Interested in learning more about how Valor can assist you with oil and gas outsourcing needs? Contact us today and take the first step toward securing your assets.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

We are excited to officially unveil Valor’s brand-new office renovations! As a Fort Worth-based company it was important to us that our excellence extends beyond our services to our clients and reaches into our workspace. We believe that a welcoming and collaborative environment is essential for our dedicated teams. The newly renovated spaces allow our oil and gas accounting team and land and mineral management team to work near one another, allowing them to thrive and deliver their best work. These renovations were meticulously designed with the goal of creating a space that our employees can share and look forward to coming to every day.

Additionally, as we celebrate the completion of our office renovations, we’re equally thrilled to unveil our new company sign, standing proudly outside our office, symbolizing a new chapter of growth and exciting things to come!

We look forward to hosting our clients and showing them the newly renovated spaces!

In the complex world of oil and gas operations, regulatory compliance stands as a crucial pillar for both operators and investors. The continuously shifting regulatory landscape across state, federal, and tribal jurisdictions poses complex hurdles for producers aiming to adhere to compliance standards. Our expert team remains vigilant in monitoring the latest developments, ensuring we simplify these procedures for you. We strive to shield you from the risk of regulatory examinations, thereby granting you additional time to devote to the growth and advancement of your business.

At Valor, we understand that navigating this landscape can be challenging, yet vital for the sustainability and success of your ventures. Here’s why understanding regulatory compliance is not just important, but essential in the oil and gas industry.

1. Ensuring Legal Operations

Regulatory compliance is fundamental to ensure that all operations are conducted legally. The oil and gas sector is heavily regulated to protect the environment, ensure public safety, and manage resources effectively. Non-compliance can lead to severe legal consequences, including hefty fines and operational shutdowns. Operators and investors must be well-versed in the laws and regulations specific to the regions in which they operate.

2. Maintaining Trust and Reputation

The public’s perception of oil and gas companies is often influenced by their commitment to regulatory compliance. Violations can lead to negative publicity, diminishing public trust, and potentially harming the company’s reputation. In an era where social responsibility is highly valued, maintaining a clean compliance record is crucial for preserving a positive public image and stakeholder confidence.

3. Mitigating Operational Risks

Compliance with regulations helps in identifying and mitigating various operational risks. This includes risks related to health and safety, environmental hazards, and financial liabilities. By understanding and implementing regulatory requirements, companies can create safer work environments, reduce the likelihood of accidents, and avoid costly disruptions.

4. Enhancing Investment Attractiveness

For investors, compliance is a key indicator of a company’s reliability and stability. Investors are more likely to fund companies that adhere to regulations, as it suggests a lower risk of legal issues and financial penalties. Compliance also indicates sound management practices, making such companies more attractive investment options.

5. Facilitating Market Access and Expansion

Compliance can serve as a gateway for market access and expansion. Many states and regions require strict adherence to regulations before allowing operations. Companies that have a track record of compliance find it easier to enter new markets and expand their operations, thus unlocking new growth opportunities.

6. Environmental Standards

Environmental standards and protection are a central concern in oil and gas operations. Regulations are in place to minimize the impact on natural ecosystems, including air and water quality standards, waste management requirements, and spill response protocols. Understanding and adhering to these regulations not only helps protect the environment but also shields companies from the backlash of environmental damage.

In conclusion, understanding and adhering to regulatory compliance is not just a legal obligation for oil and gas operators and investors, but a strategic imperative. It safeguards legal operations, maintains public trust, mitigates risks, enhances investment attractiveness, facilitates market access, and adheres to environmental standards. At Valor, we specialize in helping our clients navigate the complex web of regulations in the oil and gas sector, ensuring their operations are compliant, efficient, and sustainable.

For more information regarding Valor’s service related to regulatory compliance, click here.

Questions? Ready for support? Contact Valor today.

Our team is prepared to support oil & gas owners with services such as:

• Regulatory compliance Graham, Texas,
• Oil and Gas Services and Consulting in Abilene, Texas
• Texas Railroad Commission Oil & Gas Regulatory Consulting
• Oil and Gas Services and Consulting in Jacksboro, Texas
• Oil and Gas Services and Consulting in Bowie, Texas

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

The oil and gas industry is a cornerstone of the global economy, driving progress and powering nations. However, navigating the financial intricacies, especially severance tax filings, can be a daunting task. This is where Valor steps in – as a beacon of expertise and guidance in the complex world of oil and gas taxation.

Understanding Severance Taxes

Severance taxes are levied on the extraction of natural resources such as oil and gas. These taxes are critical to state economies, particularly in regions rich in these natural resources. The complexity arises due to the variability of these taxes – they differ not only by state but also by the type of resource extracted. This landscape necessitates a nuanced understanding, which is where companies like Valor provide invaluable expertise.

The Challenges of Severance Tax Filings

Filing severance taxes is fraught with challenges. Tax rates can vary significantly, and understanding exemptions and deductions requires a detailed knowledge of state laws and regulations. Accurate filing is crucial. Missteps can lead to severe penalties or missed opportunities for maximization of compliance and cost-saving. It’s a delicate balancing act, ensuring adherence to legal obligations while optimizing financial outcomes.

Valor stands at the forefront of this challenging field. Our team of experts brings a wealth of experience and deep industry knowledge. We offer comprehensive services, including accurate tax calculation, thorough compliance checks, and strategic advisory services. We support numerous clients in the oil and gas sector as they rely on us to navigate the intricacies of severance tax filings. For those in the oil and gas industry seeking to navigate the challenges of severance tax filings, Valor is not just a service provider but a partner in success.

Questions? Need support? Contact us today.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

For those first diving into the world of mineral management, they may find themselves lost in a maze of jargon. But with the help of the right mineral management terminology guide, and with time and experience, you too can grow from a novice to an expert, capable of navigating this complex landscape. Now, as a leading mineral management company, we’ve crafted this terminology guide to pass on this knowledge.

The basics of mineral ownership

Mineral rights: Owning land doesn’t necessarily mean you own what’s beneath it. We have had several instances where prospective clients believed they owned the minerals beneath their property. However, upon closer inspection, it was discovered that they only had surface rights. Understanding the difference is crucial. Surface rights concern the surface of the land, while mineral rights pertain to the resources underneath.

Royalties: Royalties are like the golden ticket of mineral management. When clients receive their first royalty check, the excitement is palpable. Think of royalties as your share of the production revenue. They differ from rent or bonuses, which are often one-time payments or periodic incentives.

Working interest: We have had several clients dive headfirst into mineral management without consulting a mineral management company first. They were shocked when they had to contribute to the well’s operational costs. As a working interest owner, you share in the expenses but also the potential profits of oil and gas production.

The leasing process

Lease agreement: This binding contract determines how minerals are explored and produced. Just like when you rent an apartment or build space, terms and conditions apply. Always read it thoroughly!

Bonus payment: This is akin to a signing bonus. It’s a one-time upfront payment given when the lease is signed.

Primary term vs. secondary term: Think of these as the “lease life stages.” The primary term is the initial lease period, while the secondary term extends as long as there’s production.

Shut-in royalties: A client once referred to these as “rain checks.” If a well is temporarily non-producing, shut-in royalties help keep the lease alive.

Key terminologies in drilling and production

Spud date: The day drilling begins. It’s akin to the first step of a marathon, marking the beginning of a potentially fruitful journey.

Pooling: Imagine neighbors coming together for a community garden. Pooling combines small tracts for efficient production, ensuring everyone gets their fair share.

Unitization: This is pooling’s big brother. It involves combining large tracts, sometimes entire reservoirs, to maximize production. When our client’s land is unitized with others, they benefit from a much more efficient operation.

Net Revenue Interest (NRI): This percentage determines your share of the profits. This is something clients very quickly learn to recognize to be extremely important. The importance of accurate NRI calculations – even a small decimal point difference can amount to thousands over time!

Managing production revenues and costs

Division order: The division order is every mineral owner’s roadmap to understanding payments. It ensures everyone gets paid their rightful share.

Depletion: This is a tax perk, allowing mineral owners to account for the reduced quantity of minerals. Like depreciation for assets, it’s a way to offset production income.

Joint Operating Agreement (JOA): When several parties co-own a producing property, this agreement lays out responsibilities.

The environmental and safety lingo

Reclamation: After production, land can be in need of maintenance and enhancements. Reclamation ensures sites are restored. We have seen firsthand barren lands turned into green fields, all thanks to rigorous reclamation efforts.

Plugging and Abandonment (P&A): When a well’s life ends, it’s sealed and abandoned safely. It’s the final goodbye, ensuring no environmental hazards remain.

Environmental Impact Assessment (EIA): Before drilling, companies assess potential environmental impacts.

Navigating legal and compliance jargon

Held by Production (HBP): If a property produces minerals, the lease remains active. We often compare HBP to a light bulb – as long as it’s shining, the energy (or production) continues.

Severance taxes: These are state taxes on produced minerals. They are similar to that of paying dues – a little share to support state initiatives.

Force majeure: This clause in contracts accounts for unexpected disruptions, such as unforeseen drilling delays due to a natural disaster.

The mineral management journey, with its intricate jargon, can seem daunting. But with our mineral management terminology guide, and equipped with understanding, you’re not just an owner; you’re an informed stakeholder. Lean on experts, ask questions, and always stay curious.

Still have questions? Contact our team today!

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Leaving mineral rights to your beneficiaries can be incredibly complicated. The right mineral management partner can make all the difference.

The passing of a loved one is an inevitable part of life, and it often comes with the complex process of distributing their assets among beneficiaries. When a person passes, the manner in which their property and possessions are transferred depends on whether they have left behind a valid will or not. In legal terms, this process is known as succession, and it can significantly impact mineral and landowners’ assets. In this blog post, we will explore the difference between Testate and Intestate succession and delve into their effects on mineral assets.

Testate Succession

Testate succession occurs when a deceased individual has a valid will in place at the time of their death. The will is a legal document that specifies the deceased’s wishes regarding the distribution of their assets among beneficiaries. It outlines who will inherit what portion of the estate, including real property like land and mineral rights. If you to ensure your beneficiaries get your mineral assets, a valid will is the best first step in succession planning.

Impact on Mineral Owners’ Assets:

a. Clear Distribution of Assets: With a valid will, the deceased’s intentions are explicitly stated, leaving no ambiguity regarding the distribution of their mineral assets. This clarity minimizes potential conflicts and disputes among the beneficiaries.

b. Preservation of Ownership Intentions: A will allows the deceased to appoint an executor who ensures that the property is distributed according to their wishes. This ensures that the mineral and land assets remain within the family or go to specific individuals or entities as intended by the deceased.

c. Tax Efficiency: A well-structured will can incorporate estate planning strategies to minimize tax liabilities on the mineral and land assets, preserving more of the estate for the beneficiaries.

Intestate Succession

Intestate succession, on the other hand, occurs when an individual dies without leaving a valid will or when the will is deemed invalid by the court. In such cases, the state’s laws of intestacy govern the distribution of assets, including mineral rights.

Impact on Mineral Owners’ Assets:

a. Distribution by Statute: Intestate succession follows predefined laws of the state, which may not align with the deceased’s wishes. As a result, the mineral and land assets may pass to heirs based on a predetermined hierarchy, potentially leading to unintended beneficiaries.

b. Probate Process: In intestate cases, the probate process can be more time-consuming and expensive, as the court must identify and authenticate heirs before distributing the assets. This can lead to delays in transferring ownership, which could affect the management and utilization of the mineral and land resources.

c. Potential for Disputes: Without a clear directive from a will, there is a higher likelihood of disputes arising among potential beneficiaries, leading to prolonged legal battles over the ownership and distribution of the mineral and land assets.

Conclusion

In conclusion, the difference between Testate and Intestate succession lies in the presence or absence of a valid will. Testate succession allows for a smoother transfer of mineral and land assets, as the deceased’s wishes are clearly documented and carried out by an appointed executor. In contrast, Intestate succession can create uncertainty, delays, and potential disputes among heirs, affecting the efficient distribution and management of mineral and land assets. It is essential for mineral and landowners to engage in estate planning to ensure their wishes are respected, and they effectively pass on their mineral rights to thee next generation.

Allowing an expert to work as your partner on your estate or trust takes the work and worry off of your and your inheritor’s hands while still safeguarding your asset rights. For your peace of mind in managing and securing your mineral rights, get in touch with one of our experts today.

The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.