Working Interest

This is a type of oil and gas investment in which the investor is responsible for drilling and other costs. In return, working interest owners receive a percentage of the oil and gas revenue, related to the amount of interest they hold.

A carried working interest is the amount one party (typically a dealmaker) earns after the operator pays drilling costs and completes sales on the well. It is a simple equation: working interest ownership = revenue from oil production – operating expenses – burdens (landowner royalty + overriding royalty).

Further Resources

How to Calculate Net Revenue vs. Working Interest in 4 Easy Steps

How to Understand Oil Deal Structures

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