CoreStream Energy, Inc. (fka ZLUS)

[andrewjoseph]

Look. It doesn't get any more simple. The operator comes up with a best estimate for how much the well will cost. You then say what percentage you want. That's the percent of the bills you pay. Costs go up and down from the initial projection true to weather cost of fuel cost of components ect...

They bill you for the percent you own. Then you pay it. Then if the well hits oil you take that same percentage and pay your share of completion costs.

Then when they start selling the oil they take the expenses incurred from the profits and mail you a check for your percentage. Very simple.

They don't say lets wait and see how the results turn out. Then we will decide who owns what. How would this work? Is that what some of you guys on here think?

They know their working interest share. Simple as that.

*there are some times when you would give up your share and/or be able to buy more. If the initial tests look like it will take 5 years to recover your money (or another long length of time) and coughing up a bunch more cash is to questionable to you. Then you nights opt out. Or try to sell your share to someone with deep pockets. However this is rare. If the well is looking great and you just don't have Thea money to pay the completion costs you still own you percentage. The operator fronts the money and then they pay themselves back 3 or 4 fold (from your earnings) before starting to pay your share.