"Working interest owners pay all the bills in proportion to their interest. I have seen wells where the operator has 90% working interest and a 2% revenue interest."
That can happen, it just depends on how the operating agreement is structured. I'm not assuming that it is THAT bad. What I am sure of is that as NET revenue shrinks that the owner is paying ALL of the bills out of a SMALLER piece of the pie. Just because their NRI shrinks it doesn't mean that their obligations to pay also shrink. Perhaps the audit notes will clear this up. That's what I meant by "it's not linear".
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