Principles of Payout Accounting

  • 4H
  • Basic
  • Group Live
  • None
  • None
  • Accounting

This course is designed to introduce you to the very dynamic concept of “Payout” and its impact on various Oil and Gas industry functions. Many individuals have no idea what this function does or how important this activity is to the stakeholders it supports. In this four hour course we will discuss Payout and what it means, review basic documents needed to identify and track payout, identify the components of a payout calculation and what to do with them, and finally calculate a full payout. This principles class will provide a basic understanding of the payout process.


Course Content

This course covers the following topics:

  • Overview of Payout Accounting
    • Payout Terminology
    • Concepts
    • Circumstances Resulting in Payout Calculations
  • Contracts, Well Cards and Other Source Documents
    • Payout Situations
    • Basic JOA Payout Language
    • Evaluate Oil and Gas Documents to find necessary Payout
    • Information
  • Components of a Payout Calculation
    • Essential Data to track Payout
    • Calculate NRI
    • Expense Categories for Penalties
    • Distribution Procedures
  • Calculate Payout
    • Analyze Oil and Gas Documents
    • Example Agreements

Learning Objectives

Upon completion of this course, you will be able to:

  1. Explain Payout and differentiate circumstances that need a Payout calculation
  2. Summarize the impact Payout accounting has on stakeholders
  3. Demonstrate knowledge of basic agreements and ownership impacts
  4. Apply payout concepts to an actual agreement and setup Payout for a test case


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