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Land/JV Receivable Project
Client Overview
An innovative, forward thinking, Fortune 100 multinational oil and gas company.
Deployed Capabilities
Transactions
Transformation
$397M A/R Reduction
Our team cleared $397M off the accounts receivable and suspended revenues.
4 Month Employee Training
Trained our client's employees on the methodology and best practices over 4 months.
Future Proofed
Our client was well-prepared to handle discrepancy resolutions and future acquisitions independently.
The
Challenge
Our client encountered a significant issue following a prior year acquisition. The lack of historical working interest (WI) data hindered their ability to accurately bill well costs to various Joint Venture partners. This resulted in outstanding accounts receivable balances pending recoupment due to outdated data. The desired outcome was to clear approximately $500 million in well costs and settle accounts receivable balances with partners.
The
Custom
Solution
We assembled a multi-disciplined team of Landmen, lease analysts, division order analysts, and joint interest consultants to address our client’s challenge. Our team utilized all available databases, legal documents, and years of emails to accurately reconstruct the historical data necessary for billing our client’s partners for the backlog of well costs. Our team directly negotiated with our client’s partners to resolve questions and discrepancies regarding the changing working interests (WIs) and joint interest billings (JIBs). These resolutions were handled swiftly and efficiently under the supervision of our client’s Land and Accounting Department. After ensuring the quality of work on the JIB side, our team also addressed and updated net revenue interest (NRI) discrepancies related to the same properties, ensuring comprehensive and accurate financial reconciliation.
The
Impactful
Results
Our team successfully cleared approximately $397 million off the accounts receivable and suspended revenues, demonstrating the effectiveness of the multi-disciplined approach. Within a period of 4 months, we not only resolved the current discrepancies but also trained our client’s employees on the methodology used and best practices. This training ensured our client was well-prepared to handle discrepancy resolutions and future acquisitions independently.
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