Oil and gas accounting software is software for producers in the United States and Canada that tracks leases, royalties, shared-well ownership and each well's output, and splits the income every month. A producer is a company that drills wells and sells the oil and gas. Upstream means the first part of the industry: finding oil and gas, drilling wells and producing from them.
Ordinary accounting in an ERP system cannot do this work. In the United States, the owner of a piece of land usually owns the oil and gas under it. So an American producer rents the right to drill from thousands of landowners, and each rental is a lease with its own terms. Each landowner is paid a royalty, a share of the income from the well. Other companies often share a well with the producer and its costs.
In India, the position is different. The government owns all oil and gas, and a producer works under a licence or a contract from the government. It pays the government a royalty. A producer that works under a contract also pays the government a share of its revenue or profit. So an Indian producer has no thousands of landowner leases to track, and this is why the software is sold mainly in North America.
Take, for example, a small producer in Oklahoma that has a share in 150 wells, each run by one of several companies. In one month, its wells earn $2.4 million. The producer owes royalty to 1,900 landowners, and it must share the rest with its partners. A team that does this in spreadsheets can take days to close the month, and one wrong share means one wrong payment and a dispute. With the software, the same month is split by the stored shares and the payments are ready.
The software has three main parts. Land management software keeps the leases. Production accounting records what each well produced. Revenue distribution splits the income and pays the owners, through payouts. A well's location comes from a geographic information system (GIS), and lease terms can be pulled from scanned papers with intelligent document processing.
When an AI model reads the leases and drafts the figures, a person still approves them. This is the model drafts, person approves pattern.