Dummy Owners

In SherWare you must account for 100% of a well's interests, even if you do not disburse the full 100% of the well's interests. The "Dummy Owner" is an owner that we use as a placeholder for any interest that you do not disburse on.
Typically this dummy owner will be used for third party operators to represent the un-operated portion and for wells that your company invests in through other operators to represent the other interests in the well.

The benefit of using a Dummy Owner is that the revenue and expense totals for a well will be grossed up so you can report on both the share of the well you are responsible for and the gross well activity. You will enter only the amount that you were allocated. The software will recognize a dummy owner exists in the well, then will automatically gross up the totals for you. When looking at a report, like the Well Revenue/Expense Detail", you will be able to see both the net and gross totals. The net representing your share, and the gross representing the overall wells activity.

Setup:
Create an owner on the Owner Information window and then mark the "Dummy Owner" option on the Address tab. It doesn't matter what the owner's name is, but we suggest using Dummy or some other term that will clearly indicate to you that the owner represents an un-operated share.
On the Division of Interest window you will give the Dummy owner an interest in any wells that you are not fully operating. This will act as a placeholder so that the wells interest adds up to 100%. Do not mark the Dummy owner's interest as "Direct Paid" or as receiving a "Flat Rate."

Example:
If you only disburse on 65% of a well's total revenue and expenses, then enter the Dummy Owner's interest in the well as 35%. When processing, the software will acknowledge this Dummy Owner and gross up the well accordingly. Checks will not be created for the Dummy owner. Only the percentage of the well that you operate will be processed and allocated to the owners. You can view well reports for the well's total revenue and expenses while disbursing on just a portion of it.

Dummy Owner vs. Unknown Owner:
Do not use a Dummy Owner in place of an unknown owner. If the unknown owner is located, you will need to account for the past production to him. A dummy owner will not allow you to do this. Instead, create a generic owner to represent any unknown interests and put the owner on hold so that a suspense balance will accumulate for them.

Dummy Owner vs. Direct Paid Owner:
Dummy owner's will not have an owner statement that displays amounts allocated to them. The owner is simply ignored for the most part. A Direct Paid owner is an owner that you do need to send a statement to. The direct paid portion is essentially treated the same as a Dummy Owner in all aspects except the amount will display on the owners statement. It will display the activity and flag it with a "DP" on the statement. This allows the investor to see what he should have been paid from another entity. Typically this is done for investors that are paid directly from the purchaser.
If you don't want the detail to report on the investor's statement then you could zero out his interest and assign it to a dummy owner instead. The software would then not report anything for him on his normal statement.

**Changing the Dummy Owners Interest!
The revenue and expenses are grossed up based on the dummy owner's interest when the revenue/expenses are entered into the software. If you change the interest for a dummy owner after these are entered it will not know to cycle back and update the grossed up amounts. You will need to manually go back and re-save any activity entered since the last run and prior to the DOI adjustment so that the grossed up amounts can be recalculated. Failing to do this will result in a difference in the difference box when you complete the next run closing.