Joint Interest Billing (JIB) is an accounting system that is unique to the oil and gas industry. Due to the complex nature of this industry, it’s common for multiple parties to invest in a single drilling project. Each shareholder in the joint venture has distinct privileges and obligations. A JIB statement is used to allocate the expenses and revenue from a drilling project among the partners based on the terms of their agreement.
A joint operating agreement (JOA) is an agreement between two or more parties that outlines the terms for the exploration, development, and operation of an oil and gas property. Additionally, it outlines the responsibilities of each party. One of these outlined responsibilities is for the Operator to issue monthly JIB statements. Non-operators receive a percentage of the profit based on their investment.
As you can imagine, JIB accounting is a complex process, and in most cases, operators often have a specialized accountant(s) on their team to manage it. JIB statements can be several pages long and must be mailed to all working interest partners. It takes extreme attention to detail to review, print and mail JIBS to their rightful partners.
Many operators have chosen to outsource their JIB and revenue accounting given the timeliness and sheer volume of work. Valor provides oil and gas accounting and JIB and Revenue Services. We provides full-service JIB accounting, AFE accounting, oil and gas bookkeeping, accounts payable and joint interest billing, and financial, operational and production accounting.
Our primary goal is to save our clients time and money. If you are looking to outsource your JIB accounting, contact us today.
