We have a working interest in a Utah well. The operator changed last year, and we have just now noticed that the income % is 1% lower than the expense %. Would there be a reason for this or did data entry make a wrong keystroke?
Contact the operator by certified letter return receipt and ask their owner relations or division order department to clarify. Send copies of a “before the change” and “after the change” receipt and mark the discrepancy.
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Most working interests are from being a lessee (e.g. oil company) in a lease. One lessee will be the operator and the other lessees are non-operating working interests (WI) for a well. The WI participates in costs based on the full leasehold share and receives the revenues based on that share less the royalties due to the mineral owner/lessor. Suppose WI has lease for 10% of the well and the lease royalty is 20%. Then the WI pays 10% of all costs (0.10). The WI share of revenues is 10% of gross sales less 2% royalty due under lease (0.10 x 0.20), for net revenue interest (NRI) of 8% (0.08). If your working interest is due to owning unleased minerals, then the decimals for costs and net revenue interest would be the same.
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