Transfer DOI Between Owners

Interests will be transferred between multiple owners with this utility. The interest can be split among up to 20 new owners at a time. The transfer can be done for an individual interest, or all interests that an owner has. If any suspense balances exist you can also choose to transfer those balances to the new owner(s).

CAUTION: A DOI Transfer using this utility is final and cannot be reversed. You can do another DOI transfer to move the interest back, but depending on the situation that can be more difficult than it sounds. We highly suggest creating a backup prior to completing a transfer and fully auditing the results.

Explanations for various transfer situations:

Original Owner
Select the owner that currently holds the interest.

Transfer All Interests
Mark this option to transfer all of the interests associated with this owner. This can be marked if the owner only has one interest or in situations where all interests that an owner owns is being transferred. An example would be if the original owner is deceased and all interests are being split among heirs.

Interest in a Specific Well
Mark this option if the owner you are transferring from has multiple interests and you only want to transfer his interest in one well. When marked, another field will appear on the window so that you can specify which well will need to be transferred.

Well To Transfer From
This field will only be visible if the option is marked to "Transfer Interest in a Specific Well". Choose the specific well that will be transferred.

Interest Types to Transfer
Select which interests should be transferred. Leave this as "All Interest Types" unless the owner holds multiple interest types in a well and this transfer should only impact one of them. For example: the owner may hold both a royalty and working interest in a well. If he sells his working interest but is still the landowner then you can choose Working Interest in this field. This will transfer only the working interest and he will retain the royalty interest.

Owners 1-20
Select the owners who will be obtaining the interest from the original owner. You can select up to 20 owners to transfer the interests to.

%
Fill in the percentage of the original owners interest that this owner should receive. Percentages should be entered as a whole number (50% should be entered as 50.0000000) and all of the interests should add up to 100% or 100.0000000.
Example: If the original owner holds 20% interest in the well and you need to transfer his interest to two people that will leave them both with 10% in the well once we are finished. This field does not care what their interest in the well should be (10%) afterwards. It is asking what percentage of the original owner's interest they should be receiving. Since this is an equal split between 2 people they will both be getting 50%. You will need to enter "50.0000000" here for each owner. After the transfer is complete you can look at the Well interest listing report, or division of interest window to verify that the each owner's interest in the well is 10%.

Transfer Owner and Suspense History
Marking this option will transfer past history and suspense balances to the new owners. History is what the 1099s are built from so transferring history will report these transferred balances to the new owner and appear on his 1099. Suspense balances can be either held amounts owed to the owner or amounts that the owner owns you.
Warning: If you do transfer owner and suspense history this will affect past reports. Since it will appear that the new owner had this interest as of a run in the past the information will now show up on that run. If the owner had a suspense balance or received a check his statement will now not match up with what was originally sent to him. If this is an issue for you then you should not transfer the owner and suspense history.

Start transfer beginning with run:
If you are transferring owner and suspense history this field is used to determine how much history is transferred. Select the oldest run that should be transferred to the new owner(s). The transfer will take effect as of the selected run. After the transfer it will appear as if the new owners had the interest in the well for the selected run and for every run after it. If you have multiple groups setup within the SherWare it will only transfer owner and suspense history for wells within the same group as the what the selected run was closed for.
You will not be able to transfer the owner and suspense history for a run that created a check unless the check is voided. Since the transfer will move the history to the new owner the check that was sent to the original owner would be included on the new owners 1099 which would be a problem. The software will not let you complete the transfer if a check was created.
You can look at the suspense report to determine how far back an owner's suspense balance has been accumulating. If you want to transfer all suspense then the run that you choose in this field will likely be the oldest run that shows any suspense on the suspense report.
You can also look at the check register report for the original owner to see what checks have been created for him. This will let you know how far back you can do the transfer.

** All Past Data **
If this is specified in the "Start transfer beginning with run:" field when transferring owner and suspense history then all of the original owners history and suspense will be transferred to the new owner. This will then appear as if the new owner has always held the interests.

Preview
Clicking this button will show a preliminary transfer report detailing all of the original owner's interests and suspense then showing in detail all of the new owners and what will be allocated to each of them when you do the transfer. The report will be labeled as a double check report and is not final.

Transfer
Clicking this button will process the transfer of interests from the original owner to the new owner(s) based on the above options. This is final and cannot be reversed once it is done. The double check report will appear and will not be labeled as a "Preview". This report is showing the detail of what transferred from the original to new owners. It should be printed and stored for your records because you will not be able to reproduce this report at a later time.

Double Check Report
This is a report that appears when you click on either the "Preview" or "Transfer" button. When you are previewing the report it will be labeled as a "Preview" and say "No changes made". This is your way of auditing what will transfer before it actually takes place. When it appears after you press Transfer it will be a finalized report of what was transferred from the original owner to the new owners. This should be printed and stored for your records because you will not be able to reproduce this report at a later time.

Clear
Clicking this button will clear all of the information on the window. Generally this is used after you do a transfer and have another one to process.

Exit
Closes the window.

Explanations for various transfer situations:
Simple Transfer (1 Owner, No Suspense):
Simple Transfer (Multiple Owners, No Suspense):
Simple Transfer (With Suspense):
Transferring to an existing interest holder:
Partial Transfer:
Returned Check and Transfer:
Transfer to more than 20 people:
Message: Can't Transfer, void check first:
Transferred interest doesn't match Division Order:
Transferring Deficit Suspense to a JIB Owner:
Transferring a JIB Interest with a Balance to a Netted Owner:
Transferring a JIB Interest with a Balance to another JIB Owner:
Transferring JIB History:
Transferring an interest with suspense to a posted owner:
Transferring an interest from a posted owner:
Transferring an interest and only a portion of the suspense:
Transfers that are effective mid-month:
Completing multiple transfers at different times:
Reversing a DOI Transfer:

Simple Transfer (1 Owner, No Suspense):
The simplest transfer that will need completed is a complete transfer from one owner to another that is effective from this point forward. If not suspense is involved then really all you need to do is update the owner on the Division of Interest Window. Simply find the interest, then overtype the original owner's ID with the new owner's ID.
You can also do this with the Transfer DOI Between Owners utility but it is not necessary since this is such a simple transfer.

Simple Transfer (Multiple Owners, No Suspense):
When transferring to multiple owners it may still be quicker to use the Division of Interest window that the Transfer DOI Between Owners utility if the calculation is simple. You can delete the existing interest, then add a new record for each owner that will be obtaining an interest.

Simple Transfer (With Suspense):
If you need to account for historical amounts that have been accumulating in suspense with the transfer then you will need to use the Transfer DOI Utility to accomplish this.
You will need to mark the option to Transfer Owner and Suspense History when doing the transfer. This allows you to specify how much suspense to transfer to the new owners. If you want to transfer all of the current suspense balance then you may have to look at the suspense report to see how far back the suspense has been accumulating. If the owner has been in suspense since they were entered into the software and have never received a check then you can select All Past Data. If the owner has received a check at some point, then you will only be able to transfer as far back as the oldest run that is contributing to his current suspense balance.

Transferring to an existing interest holder:
If an owner that you are transferring the interest to already has an interest in the well then you can just add up the owner's current interest to what he is obtaining and then overtype the existing record on the Division of Interest window with the new percentages.
An owner can only have three interests setup in each well. Once for Royalty, Working Interest, and override. If the owner already has an interest in the well then the Transfer utility will add any new percentages transferred to them to the current interest.
For example, if you need transfer the interest to two people and it should be effective immediately from this point forward.

Partial Transfer:
If the original owner is retaining a portion of his interest then you can include their name in the bottom with the percentage they are keeping as one of the owners you are transferring to. Think of this as a transfer to themselves.

Returned Check and Transfer:
Occasionally you will be notified of an interest transfer after a check has been mailed. The check may be returned with instructions to re-issue to a new owner(s).
You will first need to void the check in the Check Register. This will put the amount of the check into suspense. This will also place the balance of the check back into suspense. You can then complete the DOI transfer just like any other transfer with suspense.
You will mark the option to Transfer Owner and suspense history, then select the oldest run that contributed to the current suspense balance. Typically this will just be the very last run since you voided the check, but you may need to select an older run if the owner was in suspense for a while before this check was created. You can double check the suspense report to see what the oldest run is that is contributing the suspense balance.

Transfer to more than 20 people:
In this situation you will transfer to 19 owners at a time. Calculate the percentage of the original owners interest that each of the 19 people should receive. Once their percentages are entered in you can assign the remainder to the original owner so that the total percentage adds up to 100%. Take the balance that was assigned to the 20th owner and calculate the percentage of this number that should get allocated to the next series of owners. Make sure that you are calculating this based on the original owners current interest and not the interest before the first transfer was completed. Repeat this until all owners are setup properly.
Example: If you were transferring to 22 people with equal percentages, the first transfer would give each of the 19 owners 4.5454545% and the original owner's percentage would be 13.6363635%. For the second transfer the remaining three owners would each get 33.33% each. You can then review the interests in the Division of interest window and each of the 22 people will have an interest of 4.5454545%.

Message: Can't Transfer, void check first:
When attempting to transfer with suspense a message may appear saying that "Some of the owner history being transferred created a check which must be voided before the history can be transferred." The software thinks that at least one check was created for this owner during the period that you are trying to transfer. It is not letting you transfer this history because if it did, then the software would report it as if it was sent to the new owner when in reality the original owner received the check. This would cause a discrepancy in your audit trail and would make your historical reports and 1099s inconsistent with what actually took place. You will need to complete the transfer as of a later run, or void the check in question so that the balance of the check will get allocated to the new owner as well.
Find the Check - You can look to see if any checks were created by viewing the "Print Check Register Report" in SherWare. View the report for a date range starting with the date that was used on the oldest run you are trying to transfer and ending with today. Use the owner in question as both the first and last owner so it only reports on them. This report will display all checks that will be preventing the transfer from taking place.
Void the Check - If the check was never cashed you can void it, so that the amounts are added to suspense. Once this is done you will be able to complete the transfer. The suspense will then be moved to the new owner and released to him on the next run closing.
Can't Void Check? - Do not void a check that has cleared the bank or might clear the bank. If you cannot void the check then you will need to complete the transfer as of a run that took place after this check was create. This will leave the history associated with the owner that actually received the check and then transfer any suspense accumulated after that point to the new owner.
Unrelated Check - If the interests that you are transferring did not contribute to the check that was created then the transfer would not cause a discrepancy, but the software is not looking at the check detail, it is only looking to see if a check was created. Therefore you will still not be able to complete the transfer. An example of this would be if you had an interest on hold or if you have multiple groups setup where the check created was for a different group.
Workaround - The workaround for checks that can't be voided from runs that did contribute to a suspense balance is to manually adjust the suspense balance for all owners involved. You can transfer everything after the most recent check but not prior to it. Transferring a portion of the suspense will at least minimize the amount of manual adjustments you will have to make. After you transfer what you can, you will have to clear the remainder of the suspense for the original owner under the utilities menu and then add it back in for the new owner under the maintain menu on the suspense beginning balances/adjustments window. Be sure to print off the suspense report for the original owner prior to clearing the suspense balance so you know how much to add back in for the new owner(s). The detail of the suspense will not report when these amounts are released but it will allocate the correct amounts to the new owner.

Transferred interest doesn't match Division Order:
Double check the interests after the transfer is completed. You may have a division order that states an exact percentage that each new owner should have. Since you are transferring a percentage of the original owner's interest it is common for the new interest to be slightly off from what you have on your division order. If a difference exists the amount of the difference will be extremely small. That is just the nature of splitting up interests. SherWare may round at a different character than the software that was used for the division order. If this is the case you can go directly to the division of interest window and manually update the interest. The adjustment will be so small that the history and suspense balances that were transferred should not be off by more than a few pennies.

Transferring Deficit Suspense to a JIB Owner:
If suspense is included in the transfer and the original owner holds a deficit then it will transfer this to the new owner as deficit suspense. Since suspense only affects a revenue run closing the transferred deficit will be deducted from the next check that is sent to the new owner. This is different than the normal processing that a JIB Owner would see on their check and owner distribution statement so it may raise some concern when they see expenses deducted from the check. Everything will get allocated properly, it will just look different. After the Transfer is completed be sure to update the Division of Interest record for the new owner so that the JIB Int Option is marked for them. That way all future expenses will be allocated to the owner on the JIB Run instead of the Revenue Run.
If you would like to prevent this confusion you can do so by not choosing to include the suspense in the transfer. You can then manually clear the suspense balance for the original owner and add it back in as a JIB Balance for the JIB Owner. Print the suspense report for the original owner prior to adjusting the balances so you can use it as a reference. Create the JIB Balance for the new owner under the tasks menu with the Sales/Invoicing window. Use the Deficit account as the offsetting account for the detail line when you do this. Remove the Deficit Suspense balance from the original owner under the utilities menu with the Clear Owner Suspense Utility.

Transferring a JIB Interest with a Balance to a Netted Owner:
JIB Balances are not included with the DOI Transfer. If you are transferring an interest from an owner that is marked a JIB interest to an owner that will be netted you should not include history. The current JIB balance will not transfer. You will have to manually adjust the JIB balance for each owner.

Create the Deficit suspense balance for the new owner under the Maintain menu on the Suspense Beginning Balances/Adjustments window. Remove the JIB Balance from the original owner under the tasks menu with the Sales/Invoicing window. Create a negative invoice which will offset his balance. Use the deficit suspense account as the offsetting account for the detail line. Be sure to update the Division of Interest record for the new owner so that the JIB Int Option is not marked.

Transferring a JIB Interest with a Balance to another JIB Owner:
JIB Balances are not included with the DOI Transfer. If you are transferring an interest from an owner that is marked a JIB interest to another owner that will also be marked as a JIB Interest then the history from activity that processed on the revenue run will transfer, but the JIB History and current JIB balance will not transfer. You will have to manually adjust the JIB balance for each owner.

Create the JIB Balance for the new owner under the tasks menu with the Sales/Invoicing window.
Remove the JIB Balance from the original owner under the tasks menu with the Sales/Invoicing window. Create a negative invoice which will offset his balance.

Transferring JIB History:
If a lump sum adjustment can be made for the transfer of the history from past JIB Closings then you can simply adjust the overall balance for the owner. If the new owner needs to see all of the detail of every expense then you will have to create adjusting entries to backout the expense from the original owner and add it back in for the new owner. To enter these, you will need to enter each expense twice on the well expenses by well window. The first line will be a negative for the amount the original owner was charged with the original owner's ID in the allocate all to field. Then enter the Expense again as a positive and put the new owner's ID in the allocate all to field. Both entries will offset each other and will process with the next JIB Run closing. The original owner's balance should zero out and the expenses will now show up for the new owner.

Transferring an interest with suspense to a posted owner:
When revenue or expenses are allocated to an owner and the owner receiving the interest is marked to "Transfer This Owners Activity to G/L" on the owner information window, then you will need to manually make some adjustments to account for the suspense being transferred.

This owner's portion of all revenue and expenses are posted directly to income/expense accounts when a run is closed. This owner's portion of expenses will debit the "Accounts To Use For Posting Operator Owner Expense" account that is specified for each Expense Codes. This owner's portion of revenue (and taxes) will credit the account specified on the Revenue Categories for the revenue type entered and for the interest that the owner has.

Since all activity for this owner from a run closing is posted, the closing will skip the suspense processing for them. This means that if they are assigned any suspense, it will be left hanging in suspense forever, or until you do something with it.

When you transfer an interest with suspense to a posted owner, it will leave the amount in suspense and it will be left here and you will need to use the clear owner suspense utility to delete the balance. You will then also need to create a journal entry to account for the income/expenses that are being absorbed.

The cleared suspense will affect 1099 totals for the year the amounts are cleared. If these amounts should report on the old owners 1099 then you should clear the suspense prior to the transfer. If these amounts should report on the new owner's 1099 then you should clear the suspense after the transfer.

Transferring an interest from a posted owner:
Nothing special needs done when transferring an interest from a posted owner. The owner will not have any suspense, so it is just a simple transfer of interests.

Transferring an interest and only a portion of the suspense:
If the original owner has a suspense balance where only a portion of it needs transferred, then you can choose a different run to transfer the suspense as of. Instead of selecting the oldest run that contributes to the current suspense balance, you can choose a more recent one that will correspond to the amount of suspense that needs transferred. The transfer has to be done as of a run closing, so it is just a matter of determining which run you need to select.

Transfers that are effective mid-month:
It is not easy to complete a DOI transfer that is effective during the middle of a distribution cycle. All revenue and expenses are distributed to the interests at the time a run is closed, so you can't pick and choose which expenses get allocated before and after the transfer.

To accommodate this, we typically suggest leaving the Interest assigned to the old owner, then making some manual adjustments to process at the same time to blackout a portion of what is assigned to the original owner. You can also give the new owner an interest in the well in expense class 4 or any other unused interest class. This will allow you to also enter these adjustments to allocate them to the new owner. Both owners will get what they were supposed to be allocated. The only downside to this one is that your investors will see the correcting entries on their statement. This typically is not a concern though.

Another option for this situation is to close an extra run. You can simply close a run at the time of the DOI transfer. This allows you to process everything under the old owner that should be processed. After the closing, you can then update the Division of Interest and then everything will start being allocated to the new owner at this point. The downside of this option is that it will create an extra set of checks and reports for every owner in the well.

Completing multiple transfers at different times:
Occasionally we hear of complicated situations where the operator is informed of multiple transfers and multiple effective dates at the same time. For example: Grandpa may have passed away at the end of January (after cashing his check) and his interests were transferred to an estate for February and March. The estate was settled in April when the interests transferred again to 3 children. Then in June one of the children purchased the others interest.

This can seem confusing, but it isn't too difficult if we break it down and just think of it as a series of transfers working from the oldest transfer to the newest.
Transfer 1: Transfer the interest and suspense from grandpa to Estate including all suspense back to the February run.
Transfer 2: Transfer the interest and suspense from the Estate to the 3 children including all suspense back to the April run.
Transfer 3: Transfer the interest and suspense from the one child to the other including all suspense back to the June run.

Reversing a DOI Transfer:
It is not possible to reverse a DOI transfer. It is best to manually create a backup prior to performing any DOI transfer. You can then restore the backup if needed.
If you do need to reverse a DOI transfer the only option is to do another transfer to move the interest back to the original owner. This can be a simple process, but depending on the situation it can be more difficult than it sounds.