Energy Industry (Oil & Gas)/Working interest on Oil Well


Dear Mr McCall,

Thank you for your time. I recently inherited a small working interest on an oil well. Every month I get a bill from the drilling company. Most months I do not receive any income from the well and have paid much more in drilling fees then I have received. I can't keep subsidizing this well. What can/should I do?

Hello Jan. I have been in your situation before.  I solved my problem by offering to sell my interest back to the operator for a small sum.  I have also seen people just give their interest back to the operator if they became convinced there was no upside to the property. Contact the operator to see what its plans are for the property and if there is any interest in buying the interest back from you.  If there is no interest, send a notice to the operator that you propose the plugging of the well. If the operator  wants to continue operating the well it will be required to pay you the salvage value of your part of the equipment in the well, and you would make an assignment of the interest to the operator. Other than just holding on, or not paying the joint interest billings, I think you don't have many other options than what I've described.

Good luck Jan and let me know if you have any other questions.  

Energy Industry (Oil & Gas)

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David B. McCall


Questions regarding oil and gas exploration and production, the operation and management of oil and gas producing properties, and questions related to mineral ownership, title problems, and oil and gas leases.


I am Board Certified in Oil, Gas and Mineral Law in the state of Texas. I have more than 37 years of experience in the industry as both an in house attorney for major oil companies and as a partner in oil and gas firms. I am also a mineral owner and receive royalties from oil and gas production. I have extensive title examination experience, and have represented clients in many administrative and court proceedings.

State Bar of Texas, Texas Bar Foundation, and Austin Bar Foundation.

Various state bar seminars on Oil and Gas matters.

I have a business degree in marketing from McMurry University, 1971, and a JD degree from Texas Tech University in 1974, where I graduated 17th in my class. Board Certified in Oil, Gas and Mineral Law in 1986.

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