In the complex and ever-evolving midstream oil and gas industry, companies stand at a critical juncture. Charged with the transportation, storage and marketing of oil and gas, these companies also shoulder a hefty administrative burden that comes with intricate legal, regulatory, and financial processes. Among the most complicated of these are Division of Interest (DOI), Force Pooling, and Escheat.
Traditionally, managing these processes has been time-consuming, resource-intensive and error-prone. But as the industry leans more heavily on digital transformation, midstream automation solutions are proving to be game-changers.
Specifically, automating DOI in midstream oil and gas, Force Pooling automation, and Escheat management automation are significantly streamlining operations; minimizing risks, ensuring regulatory compliance and improving operational efficiency.
#Understanding the Complexity
Before diving into how automation can transform these processes, let’s clarify what each one entails:
Division of Interest (DOI) defines how revenue and expenses are split among stakeholders in a well or field. Managing DOI involves tracking ownership changes, interpreting legal documents, and ensuring accurate revenue distribution.
Force Pooling occurs when mineral rights owners are compelled to join oil and gas operations, even if they haven’t agreed to participate. This process is fraught with regulatory intricacies and requires careful handling of legal and financial records.
Escheat is the process by which unclaimed or dormant assets revert to the state. In oil and gas, this typically involves unclaimed royalties or payments, demanding meticulous record keeping and compliance with varying state laws.
Each of these processes involves high stakes and high volumes of data. Manual systems often fall short, leading to compliance issues, delayed payments and significant administrative overhead.
#The Case for Automation
Process automation in midstream oil and gas is no longer a luxury; it's a necessity. Automation tools can now handle repetitive tasks, validate data accuracy and flag inconsistencies in real time.
Here’s how automation transforms each process:
Automating DOI in Oil and Gas
In traditional DOI management, teams must comb through contracts, land agreements and regulatory filings to ensure correct ownership percentages. A single data entry error can cascade into revenue misallocations and legal disputes.
With automation, DOI systems can:
Integrate with land and accounting systems to ensure consistent data flow
Automatically update interest changes based on new contracts or ownership transfers
Generate audit trails for compliance and internal review
This significantly reduces manual input, reducing human error in midstream operations and accelerating the revenue distribution process.
Force Pooling Automation
Force Pooling requires operators to track dozens or even hundreds of stakeholders and ensure legal compliance across jurisdictions.
Automation can simplify this daunting task by:
Mapping ownership and regulatory data onto digital platforms
Automating notifications and documentation to non-consenting parties
Providing centralised access to pooling agreements, reducing legal friction
By digitizing and streamlining stakeholder communications and filings, Force Pooling automation reduces turnaround times and improves transparency.
Escheat Management Automation
Escheat laws vary widely from state to state, and companies must track dormant accounts, attempt to locate rightful owners, and submit detailed reports. Failing to do so can result in hefty fines and reputational damage.
Escheat management automation simplifies this by:
Flagging unclaimed assets based on inactivity thresholds
Automating due diligence processes (e.g., sending notifications to last known addresses)
Generating and submitting escheat reports in compliance with state laws
This ensures that companies stay ahead of compliance deadlines while reducing administrative costs.
#The Broader Benefits of Midstream Automation Solutions
Beyond these specific processes, automated oil and gas accounting and digital workflows offer midstream companies a host of strategic advantages:
Improved Accuracy: Automated systems are far less susceptible to the manual errors that can plague complex financial calculations and document interpretation.
Time Savings: Automation dramatically cuts down the time required to complete tasks like DOI updates, Force Pooling notifications, and escheat filings.
Regulatory Compliance: With ever-changing regulations, especially at the state level, automation helps companies stay current and reduce the risk of non-compliance.
Scalability: As your operation grows, so does the complexity of your data and processes. Automation provides the scalability to manage that growth without a linear increase in administrative overhead.
One such example depicting the power of automation in midstream is the Scissortail Energy case study. In this, the Integrated Energy System (TIES) helped the company transform its midstream operations through automation.
#How did TIES help?
In the Scissortail Energy case study, TIES automated several key processes like DOI, Force Pooling and Escheat, allowing Scissortail to manage these critical functions more efficiently. Automation helped reduce errors and saved time, enabling the team to focus on higher-value tasks.
“Scissortail Energy faced challenges with the complex and time-consuming processes involved in Division of Interest (DOI), Force Pooling and Escheat management. These functions were prone to errors and required significant manual effort. By automating these processes with TIES, Scissortail was able to reduce human error, save time and ensure regulatory compliance. This automation allowed the team to focus on more strategic tasks, enhancing overall operational efficiency.”
Check the link to learn more about How TIES Streamlined Plant Processing and Revenue Management for Scissortail Energy
#Conclusion
Automating DOI in oil and gas, Force Pooling automation and Escheat management automation represent not just operational upgrades but strategic imperatives for modern midstream oil and gas operations.
By investing in process automation in midstream, companies not only reduce errors and costs; they also position themselves for a more agile and compliant future.
In a landscape where the smallest oversight can result in significant financial and legal exposure, automation offers a way forward that is smarter, safer and more sustainable.
