Definition - What does Working Interest mean?
Working Interest is the interest in oil or gas lease that offers its owner the right of exploring, drilling and producing gas and oil. The owner is required to pay the comparable percentage of cost of drilling, leasing, producing and operating the well. After these royalties are paid, Working Interest calls for its owner to share the production revenues with other Working Interest owners. These production revenues are formed depending upon the percentage of the Working Interest owner.
Petropedia explains Working Interest
It is a requirement that the owner of a Working Interest should pay a percentage of costs of production and drilling operations. The Working Interest holders are given options of operating the property itself or they can pass on the responsibility to a third party. Its offerings take place at different stages of development. The percentage of production cost with which the owner is entitled is always smaller than the percentage of cost that the owner is required to bear. This maintains the balance of production accumulating to the owners of royalties.
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