Legal Definitions - operating interest

OPERATING INTEREST

Operating interest refers to the percentage of ownership in an oil or gas well that gives the owner the right to participate in the management and decision-making process of the well's operations. It is also known as working interest.

Example 1: John owns a 25% operating interest in an oil well. This means that he has the right to participate in the decision-making process of the well's operations, such as drilling, production, and maintenance. He is also responsible for paying 25% of the costs associated with these operations.

Example 2: Sarah has a 50% operating interest in a gas well. This means that she has the right to participate in the management of the well's operations, such as hiring contractors and making decisions about the well's production. She is also responsible for paying 50% of the costs associated with these operations.

Operating interest is the percentage of ownership in an oil or gas well that gives the owner the right to participate in the management and decision-making process of the well's operations. The examples illustrate how owning an operating interest in a well gives the owner the right to make decisions about the well's operations and share in the costs associated with those operations.