SherWare Knowledge Base
JIB & AFE
JIB & AFE
Within the Accounting Manager's disbursement processing, all owners can be viewed as Net or JIB. It is important to understand how this setting will affect the processing for amounts allocated to your owners during the run closings.
Net: All expenses allocated to this owner will be netted from their share of well revenue during the Revenue run closing. The disbursement check created for this owner will be net of their expenses.
JIB: All expenses allocated to this owner will be invoiced during a JIB run closing. These owners will receive a disbursement check for their share of well revenue during the Revenue run closing without any expenses netted from their revenue.
In order to mark an owner as being Net or JIB, you will need to use the Division of Interests screen. In this screen, you'll find an option 'JIB Int.' If checked, the interest being displayed will be considered a JIB interest. If unchecked, the interest being displayed will be considered a Net interest. We'll assume that all royalty and override owners are Net since these owners are not typically allocated any well expenses. Therefore, when entering a royalty or override interest within a well, leave the JIB Int option unchecked.
Since the status of JIB or Net is specified for each individual interest within a well, it is possible for an owner to have a combination of Net interests in some wells, and JIB interest in other wells.
If the JIB Int option is checked, all expenses allocated to that owner within that well will be invoiced to him during a JIB run closing. The JIB setting does NOT apply to only a portion of expenses such as drilling and completion expenses. Therefore, if the JIB Int option is checked, all expenses, including lease operating expenses, will be invoiced to the owner during the JIB run closing.
AFE = Authorization for Expenditure
An authorization for expenditure or AFE is a document that shows an investor what the costs are estimated to be for drilling or working over a particular well. The AFE Module will allow you to estimate costs for a well, then track the estimate against the actual costs as they occur. This is an optional module so it will only be useable if you purchased the AFE Module.
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