A JIB (a joint-interest billing) is the invoice an operator sends a non-operating working-interest owner for that owner's share of the actual costs of running a well: drilling, completion, lease operating expense, workovers, and overhead. Where a revenue check stub pays you, a JIB bills you. It takes the total costs the operator incurred, applies your working-interest decimal, and tells you what you owe. Reading one means checking three things: that the costs are real and reasonable, that they were charged at your correct decimal, and that they are costs the operating agreement actually lets the operator pass through.
What is a JIB, and how is it different from a check stub?
When you hold a working interest, you own a share of the well's revenue and a share of its costs. The operator fronts the costs of operating the well and then bills the non-operating owners for their shares. That bill is the JIB.
A revenue check stub and a JIB are two sides of the same well. The stub applies your decimal to revenue and pays you. The JIB applies your decimal to costs and bills you. In a healthy producing month, your revenue exceeds your costs and you net positive. In a drilling month, or a month with a major workover, the JIB can exceed revenue and you write a check. This is the defining feature of working interest, and the reason it carries risk that royalty interests do not.
What is actually on a JIB?
Capital costs, when there is drilling or completion activity: intangible drilling costs (labor, fuel, services that have no salvage value), tangible equipment (casing, wellhead, pumping units), and completion costs. These usually trace back to an AFE (the authorization for expenditure you approved earlier). The AFE was the estimate; the JIB is the actual.
Lease operating expense (LOE): the recurring cost of keeping the well producing, such as pumping, chemicals, water disposal, repairs, and field labor. This shows up month after month for a producing well.
Overhead: most joint operating agreements let the operator charge a fixed monthly overhead rate per well (often split into a producing-well rate and a higher drilling-well rate). These rates are set in the accounting procedure attached to the operating agreement.
Your share of each line is the cost multiplied by your working-interest decimal, the same decimal you are paid revenue on.
How do I check a JIB before I pay it?
Confirm the decimal. Your working-interest decimal on the JIB should match the one on your revenue stub, unless something has genuinely changed (a non-consent election, a sale, or a title correction). A cost decimal that quietly differs from your revenue decimal is the first thing to question.
Tie capital charges back to the AFE. If you approved an AFE, the JIB's capital costs should be in the neighborhood of that estimate. A JIB that runs far above the AFE total deserves an explanation. If the well was billed to you despite a non-consent election, that is a different and serious question.
Sanity-check the operating expense and overhead. LOE that jumps without an obvious cause, or an overhead rate that does not match the accounting procedure in your operating agreement, is worth raising. What an operator may charge, and at what rate, is governed by your specific joint operating agreement, so the agreement is the document that settles most JIB disputes. Confirm contested charges against it, and with a landman, accountant, or attorney where the amounts justify it.
What if I think a charge is wrong?
Operating agreements typically give non-operating owners a window to audit or dispute charges, and that window is not open forever. Raise questions in writing, reference the specific line and the relevant provision of the operating agreement, and keep paying undisputed amounts on time so a single contested charge does not put you in default on the whole bill.
Many JIB disputes are bookkeeping (a misapplied decimal, a charge booked to the wrong well, an overhead rate keyed in wrong) rather than bad faith. They are easiest to resolve when you catch them in the month they appear, against the agreement that governs them.
How Strata Vantage helps
Strata Vantage reads the JIBs you receive, applies your working-interest decimal to check the math, ties capital charges back to the AFE you approved, and flags the things worth questioning: a cost decimal that does not match your revenue decimal, charges that run well above their AFE, or operating expense that moves without explanation. It then places the bill against the well's economics, so a JIB stops being a number you pay on a deadline and becomes a cost you can actually evaluate. It does not replace your operating agreement or your accountant. It tells you where to point them.
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