If the owner elects non-consent in a project she is not obligated to pay any portion of the project cost, however, she will incur a non-consent penalty. After the well is drilled or the work is complete she then receives her proportionate share of revenue less royalties, taxes, and operating costs. If the owner elects to participate, she must pay for her proportionate share of the project costs even if it far exceeds the original estimate. This is done by sending out an election notice to each working interest owner notifying him or her of the type of work proposed and his or her share of the estimated total cost.Įach working interest owner must either elect participation or non-consent. When an operating company decides to drill a new well on a lease or perform significant work on an existing well it must notify all other working interest owners. ![]() If you own a working interest (see my previous post on Types of Oil and Gas Interests) in an oil and gas lease you might receive an election notice from the operating company. ![]() Non-consent, participation, and election letters.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |