I’m trying to figure out if I understand how working interests work. If I inherited a working interest in the Ladonna #1-3 and the Plummer 1-3 and 2-3 in Blaine County, Section 3-14N-13W should I be receiving payment on anything else in that section? How can I determine if I’m supposed to be receiving checks on other wells?
Lyn_B, your Mineral Deed, or Property Deed with mineral rights, would determine if you should be receiving royalties for, or have interests in, the other newer wells in the section. By itself, a working interest is a financial arrangement between you and the operator for a particular well. If you also inherited mineral rights in that section there is a good chance you should be receiving payments from other wells.
1 Like
Also, the operator for the Plummer wells and the newer horizontal wells is the same (OLIPDP). If you contact them, they may be willing to explain, at least from their point of view, which wells you should have an interest in.
1 Like
Thanks! as far as I know we don’t own mineral rights in that county - only a working interest but it goes back to the 80’s. Is there a type of working interest that would allow us to participate in newer wells automatically?
Lyn_B, I suspect it depends on how the working interest originated and what agreements and/or leases were signed at that time. Often, the agreements will address the issue on whether the working interest applies only to a particular well, a group of wells or if it also includes future wells.
If you are a new working interest owner, you should be aware that along with a share of the profits, working interest often implies a share of expenses and liabilities as well. There are also different taxation rules that could apply. A consultation with a gas and oil attorney may answer your original question along with some of these others that are bound to come up.
Lyn: A working interest must be tied to an oil & gas lease. You can look at the county records to see what interest your predecessor received in and to lease(s). If the interest of your predecessor was subject to a pooling Order, the subsequent well provisions of the pooling order sets forth the requirements needed to participate in any future wells. It is quite possible that you or your predecessor did not make an election to participate in future wells as per the pooling order and once that happens, you have been deemed out of all future wells. So you need to do some research and go through the paperwork that your predecessor has that can help answer your questions.
2 Likes
This topic was automatically closed after 90 days. New replies are no longer allowed.